Holden offers ‘lemon law’ guarantees after ACCC inquiry

HOLDEN has admitted it could have handled some customer complaints a lot better after Australia’s consumer watchdog pulled it up for mishandling defects in its vehicles.

But at the same time, the Australian Competition and Consumer Commission (ACCC) praised the brand for going above and beyond current consumer laws to allow customers to either get their money back, or swap out for another vehicle if their car was rendered undriveable in the first 60 days of ownership.

The ACCC launched an investigation into Holden after customers started complaining to the watchdog about the way the carmaker was handling warranty issues, mainly relating to a mechanical defect in Holden Captivas that were fitted with a 2.0-litre diesel engine and built between 2007 and 2008.

The problem, linked to failing rocker arm needle bearings that would unexpectedly fail, which would either reduce the engine’s power or stall it, sparked a safety recall for the Captiva in 2015.

Holden admitted that some of its conduct while handling buyer complaints about the Captiva’s problem was “likely to have contravened the consumer law”.

The ACCC said last week that Holden had agreed to a court-approved undertaking to “comply with its consumer guarantee obligations under the Australian Consumer Law (ACL) and adopt recommendations from the recent ACL review”.

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“Holden acknowledged that it misrepresented to some consumers that it had discretion to decide whether the vehicle owner would be offered a refund, repair or replacement for a car with a manufacturing fault, and that any remedy was a goodwill gesture,” ACCC chairman Rod Sims said in a statement.

“Holden also accepted that some consumers were told that a remedy would not be provided because the vehicle had not been serviced by a Holden dealer or with sufficient regularity, or as the vehicle was purchased second hand.”

Under Australian consumer law, buyers are guaranteed remedies for faults in cars, the ACCC said. It said the law operated separately to a new car’s warranty, and could not be modified to make owners have their vehicles serviced by authorised dealers in order to obtain a remedy.

Holden said it would expand its customer care program in the wake of the ACCC’s action.

“Customers have always been at the heart of Holden, but we do recognise there has been the occasional situation in the past where we could have done better so we have been proactive in reviewing how we respond to customer issues,” Holden customer experience executive director Peter Jamieson said.

“Today we are announcing an industry-leading 60-day policy to reinforce our commitment to customers.

“Our dealer teams and the teams supporting our dealers want every customer to get the most out of their Holden vehicle. Our 60-day policy says to our customers and dealers – we stand behind our products.”

Holden’s commitment to give buyers more protection relates to a 2011 review of consumer laws that helped introduce “lemon laws” – the legal framework that says the car you buy has to be of acceptable quality including in terms of safety, defects and durability, and reasonably fit for any purpose the buyer had specified, such as towing.

Ford is facing similar accusations from the consumer watchdog about its handling of customer complaints after multiple problems surfaced in the Powershift dual-clutch automatic gearboxes fitted to about 72,000 Ford Fiesta, Focus, and EcoSport vehicles sold between 2011 and 2016.

Ford has strongly refuted the ACCC’s allegations, and said it would challenge them in court.