Holden gives ACCC enforceable undertaking for ACL guarantees

Thursday, 03 August 2017

The Australian Competition and Consumer Commission (ACCC) has today announced that it has accepted a court enforceable undertaking from GM Holden Ltd (Holden) in relation to Holden's consumer guarantee obligations under the Australian Consumer Law (ACL).

The ACCC can choose to accept an enforceable undertaking under section 87B of the Competition and Consumer Act 2010 (Cth) in order to settle or avoid legal proceedings being commenced for an alleged breach of that Act (including the ACL).

According to the ACCC's media release, the ACCC has accepted an enforceable undertaking from Holden following an ACCC investigation into Holden's response to a particular manufacturing fault. ACCC Chairman Rod Sims stated that in relation to that manufacturing fault Holden acknowledged that it had:

  • Misrepresented to some consumers that Holden had a discretion to decide whether or not to give a refund, repair or replacement vehicle;
  • Misrepresented to some consumers that any remedy offered by Holden was a goodwill gesture; and
  • Told some consumers that no remedy would be provided where a vehicle had not been serviced by a Holden dealer or with sufficient regularity or purchased second hand.

According to the ACCC's media release, Holden has accepted that this conduct 'is likely' to have contravened the ACL.

In consequence, Holden has offered an undertaking to the ACCC that extends further than just compliance with the current ACL regime, but also to:

  • Offer consumers a refund or replacement without the need for them to demonstrate a major failure, if a defect prevents a vehicle from being driveable within 60 days of the date of purchase; and
  • Recognise that multiple minor failures of a vehicle may constitute a major failure.

In the recent ACL Review Report released by Consumer Affairs Australia & New Zealand, various amendments to the ACL were recommended which included imposing additional consumer protection obligations of the kind which Holden has undertaken to the ACCC to provide.

Holden's undertaking to the ACCC also includes:

  • Refraining from making representations of the kind investigated by the ACCC;
  • Notifying all new customers by letter of their statutory consumer guarantee rights;
  • Amending its dealer policies and procedures to ensure they comply with the ACL in relation to consumer guarantees;
  • Undertaking a mystery shopping program to test the extent of ACL compliance within Holden's dealer network;
  • Appointing a compliance officer to monitor the implementation of the consumer law compliance program and complaints handling system and conduct annual external reviews of these programs;
  • Engaging an external reviewer to consider complaints since 1 January 2016, and provide a remedy to consumers where appropriate; and
  • Providing consumers with the ability to obtain information about any issues with their vehicle by contacting Holden and giving their vehicle identification number.

The full enforceable undertaking can be viewed by clicking the link here.

For further information please contact:

Partner | Melbourne
P +61 3 8644 3509
Partner | Sydney
P +61 2 9334 8612
Maria Townsend 
Partner | Sydney
P +61 2 9334 8872
Tony Garrison
Partner | Melbourne
P +61 2 8644 3542
Thomas Kim
Partner | Melbourne
P +61 3 8644 3532
Sean O'Donnell
Partner | Sydney
P +61 2 93348451
Gail Owen
Partner | Melbourne
P +61 3 8644 3504
Peter Van Rompaey
Partner | Melbourne
P +61 2 8644 3506
Justin Pasa
Partner | Melbourne
P +61 7 8644 3552

Derek Sutherland
Special Counsel | Melbourne
P +61 7 8644 4754

For information on our Automotive Group click here.

Important disclaimer: The material contained in this publication is of a general nature only and is based on the law as at 20 June 2017. It is not, nor is intended to be, legal advice. If you wish to take any action based on the content of this publication we recommend that you seek professional advice.