ACCC takes Toyota to task over DPF faults, warranty knockbacks

Australia’s top consumer watchdog has accepted a court-enforceable undertaking from Toyota regarding misleading information and disputed warranty claims.

Toyota has filed a court-enforceable undertaking with the Australian Competition and Consumer Commission (ACCC) following ongoing diesel particulate filter warranty complaints – and has, for now, escaped any financial penalty.

The action comes a month after a damning independent report was critical of Toyota’s diesel particulate filter technology – and amid a class action in which, combined, could cost Toyota millions of dollars in compensation, warranty repairs, and vehicle buy-backs.

A statement issued today by the top consumer watchdog said Toyota has acknowledged the ACCC’s concerns that consumers could have been “misled” about their rights under Australian Consumer Law.

“We received a number of complaints about Toyota’s approach to consumers experiencing issues with the Diesel Particulate Filter (DPF) in their vehicles,” ACCC Commissioner Sarah Court said in a media statement.

A statement issued by Toyota Australia said the company “welcomed the opportunity to resolve this matter without formal legal proceedings and without Toyota Australia being required to pay a monetary penalty”.

The ACCC said it received complaints between 2016 and 2018 after “many consumers experienced issues with the DPF in their vehicles”.

“This included the emission of white smoke from the vehicle and soot accumulation in the DPF resulting in the display of warning messages and some vehicles entering ‘limp mode’ to encourage the driver to seek assistance,” said the ACCC.

Although Toyota Australia progressively implemented new measures from June 2018, “consumers were instructed to take their vehicles to a Toyota dealer for repair under warranty but the ACCC received complaints about vehicles being repaired on multiple occasions without remedying the DPF issues,” the ACCC said.

“Toyota has also implemented a review of, and improvements to, its Consumer Law Compliance Program and provided Consumer Law compliance training to relevant Toyota Australia staff and Toyota Dealers,” the ACCC said.

“Toyota has now undertaken to review its systems and procedures for customer complaint handling, to ensure consumers are able to access a refund or replacement vehicle where there has been a major failure,” said Ms Court.

The ACCC has had a spotlight on the car industry for the past five years after receiving countless complaints from customers who were knocked back on genuine warranty claims.

“All businesses, including car manufacturers, are reminded that consumer law rights cannot be excluded, restricted or modified. Warranties operate in addition to consumer guarantees, not instead of these statutory guarantees,” said Ms Court.

The ACCC said Toyota has also pledged to inform customers of their rights under consumer law, and to “allow consumers to access details of repairs or updates carried out by Toyota dealers relevant to their vehicle”.

“Toyota also acknowledged the ACCC’s concerns that failure to inform consumers regarding mechanical issues with their vehicles (or issues with repairs) may be misleading,” said the ACCC media statement.

The ACCC issued the following background information:

Between June 2015 and June 2018, Toyota Australia sold vehicles fitted with 2.4-litre or 2.8-litre diesel engines fitted with a Diesel Particulate Filter (DPF) designed to capture particulate matter and transform it into carbon dioxide and water vapour through a process referred to as regeneration.

The ACCC has previously accepted court-enforceable undertakings from Volkswagen, Holden and Hyundai to improve their Australian Consumer Law compliance.

In April 2018 the Federal Court found Ford engaged in unconscionable conduct in the way it dealt with complaints and ordered them to pay $10 million in penalties.

In October 2019, the ACCC instituted proceedings against Mazda alleging unconscionable conduct and false or misleading representations in its dealings with consumers.

In September 2015, Fiat Chrysler Australia (which distributes Jeep, Alfa Romeo, Fiat and Chrysler) provided “an administrative undertaking” to the ACCC following an investigation into handling of complaints and warranty claims.

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