AAAA News

The AAAA wants a special focus on protection of vehicle owners’ consumer rights because of the high value of the initial purchase and ongoing maintenance, and the vital contribution vehicles make to consumers’ working and family lives and to the Australian economy.

Executive Director Stuart Charity said this Consumer Law Review is required because there is a significant power imbalance between consumers and the large global vehicle manufacturers and their dealer networks.

“AAAA is uniquely positioned as a technically astute observer of the consumer protection regime for new vehicle sales and their ongoing servicing and repair. The 21st century is bringing significant change to the way we buy and maintain vehicles,” he said.

“The AAAA observes that Australian Consumer Law, while successfully delivering improvements in consumer protection, does not currently adequately protect consumer rights in respect to car purchase and ownership.

“Recent examples include the behaviour of VW in their emissions scam, the slow and imperfect responses by Toyota to their poor pedal design and by General Motors to its ignition switch fault. These cases affected millions of vehicle owners.

“There are sections of Australian consumer law that are subject to ‘creative compliance’ rather than actual compliance with the letter and the spirit of the law,” said Stuart Charity.

A great many consumers are not fully aware of the terms and conditions of their purchase contract or the vehicle warranty period, when they buy a vehicle.

“Current laws allow warranty terms that are highly confusing to most consumers. This confusion leads to many people buying services that they do not need, because they do not know that they already have significant protection under Australian consumer law.

“For example, it is not clear if some ‘extended warranties’ are insurance products or service contracts. These contracts use the term ‘warranty’, but do not necessarily provide the protections that a consumer would expect from a ‘warranty’.

“The recent trend by vehicle makers offering ‘capped price service’ was another example of terms hidden in the fine print. Following Australian Competition & Consumer Commission action against Kia Motors Australia, the company was forced to amend the terms and conditions of its capped price offer to consumers.

“AAAA supports mandatory requirements for contracts that clearly state what rights are being surrendered and which rights simply duplicate statutory consumer rights. In particular, we support a cooling off period for ‘extended warranties’ similar to the UK model,” he said.

From the perspective of road safety, AAAA is concerned that there is no rigorous consumer protection to ensure owners learn about vehicle recalls and technical service bulletins in a timely manner. “At present, there is a voluntary industry code in place, which requires car manufacturers to advise vehicle owners in the event of a safety recall,” Stuart Charity said.

“However, the manufacturer is not obligated to maintain contact with vehicle owners should they change address, or to advise the new owner when a vehicle is sold.

“Technical service bulletins include information on known vehicle faults and fixes that are not deemed by the car manufacturer to warrant a full safety recall. These important bulletins are not shared with the owners or independent repairers working outside the authorised dealership networks.

“The AAAA calls for a mandatory process to ensure car manufacturers notify vehicle owners and the entire service and repair industry of all safety recalls and technical service bulletins. Only a robust advisory process will ensure that Australians owning new and second hand vehicles are travelling in safe vehicles,” said Stuart Charity.

Another key issue raised by AAAA in its Australian Consumer Law Review is the lack of a clear definition for what constitutes a “major failure” for motor vehicles. “We need what is commonly referred to as a ‘Lemon Law’”, said Stuart Charity.

“The absence of an Australian Lemon Law leads to significant consumer disadvantage. Under current regulations, car owners are forced to return to the point of sale repeatedly for ‘repairs’ and often do not achieve a satisfactory outcome over an unreasonably long period.

“The AAAA supports the clear definition of ‘motor vehicle major failure’ used to protect consumers in the USA,” he said.

AAAA strongly advocates the principle that car manufacturers must provide consumers with access to data related to the service and repair of their vehicles and control over the data generated by their vehicles. “Currently there is no legal protection for consumer access to data stored in electronic log books or data exchanged via telematics,” said Stuart Charity.

“For example, AAAA believes that the owner should be able to assign permission to access and update their cars electronic log book to their repairer of choice, be that a dealer or an independent (non-dealership) workshop.

“Since 2009, AAAA also has advocated for a mandatory industry code that ensures manufacturers make service and repair information available to independent workshops for a fair price.

“A mandatory code will create a level playing field with both dealerships and independent workshops able to operate using the latest technical data. Consumers will then benefit greatly because they will have genuine choice of repairer opportunities.

“Current Australian consumer law is not sufficiently protecting vehicle owners’ rights.  In many comparable international jurisdictions, the issue of vehicle data ownership is recognised and is protected through special provisions to ensure competition is maintained in this important market.

“Australia has made great progress in protecting markets and consumers, but in respect of vehicle ownership, we must do better,” said Stuart Charity.