HOLDEN acknowledges it failed to respond to manufacturing faults and deceived owners seeking fixes under warranty.
Some customers had been denied assistance because their vehicles had not been serviced by a Holden dealer or because it was bought second-hand.
In the second major swipe at a car company within a week after launching court action against Ford Australia, the Australian Competition and Consumer Commission has forced Holden "to comply with its consumer guarantee obligations under the Australian Consumer Law".
Investigations by the ACCC revealed Holden's responses to manufacturing faults was likely to have contravened the consumer law.
"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.
"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.
"The Australian Consumer Law includes consumer guarantees that provide remedies for major and minor faults in motor vehicles. The consumer guarantees operate separately to the manufacturer's warranty, and cannot be modified to require consumers to have their vehicles serviced by authorised dealers in order to obtain a remedy."
According to the ACCC, Holden "has offered an undertaking that goes beyond ensuring compliance with the current consumer guarantee obligations and commits to measures in line with recommended changes to the law".
"These are great commitments that will have a significant and positive impact for consumers," Mr Sims said.
Among the Holden commitments are:
- Clarify its internal compliance training program so that multiple minor failures of a vehicle may constitute a major failure
- For new vehicles, Holden has also committed to offering 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
- Engage an external reviewer to consider complaints since 1 January 2016, and provide a remedy to consumers where appropriate
- Amend its dealer policies and procedures to ensure they comply with the ACL in relation to consumer guarantees, and
- Provide consumers with the ability to obtain information about any issues with their vehicle by contacting Holden and giving their vehicle identification number.
Holden said it is working towards being the most customer-focussed car company in Australia and has cooperated fully with the ACCC.
The General Motors brand said the changes will benefit customers now and in the future and will soon announce further details of an expanded customer care program.
The hierarchy has committed to assisting customers with warranty, roadside assistance and the cost of servicing their vehicle.
"Customers have always been at the heart of Holden, but we do recognise there have been some situations in the past where we could have done better," said Holden's executive director of customer experience, Peter Jamieson.
"At times our responses to customers have been too heavily influenced by vehicle warranties. We have been proactive in reviewing how we respond to customer issues.
"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."
The ACCC's new car retailing study draft report will be released this month and will elaborate on the "widespread compliance issues we have encountered across this industry".
"As shown over the past week, the ACCC has a range of enforcement tools available to address unlawful conduct and we take a proportional response in addressing non-compliance. I urge all companies selling cars in Australia to get their consumer law compliance programs in order."
Holden is currently preparing to shut manufacturing operations in Australia. The last Holden Commodore will roll off the Elizabeth production line on October 20.