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iTWire - Honda to pay $6m in penalties for ‘misleading consumers’ about dealersh...

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Monday, 18 December 2023 11:47

Honda to pay $6m in penalties for ‘misleading consumers’ about dealership closures Featured

By Gordon Peters

The Federal Court has decided to impose penalties totalling $6 million on Honda Australia, accepting Honda engaged in misleading or deceptive conduct, and made false or misleading representations to customers of former authorised Honda Australia dealerships Brighton Automotive Holdings Pty Ltd (Astoria), Tynan Motors Pty Ltd (Tynan) and Buick Holdings Pty Ltd (Burswood).

The Australian Competition and Consumer Commission (ACCC) regulator alleged that between about January 2021 and June 2021, Honda Australia represented to customers of Astoria, Tynan and Burswood that the dealerships would close or had closed and would no longer service Honda vehicles, when this was not the case- with the representations allegedly made in emails, text messages and phone conversations with customers.

The ACCC said the communications were made in the context of Honda Australia restructuring which resulted in some franchise agreements with authorised dealers being terminated, including agreements with Astoria, Tynan and Burswood - and the Astoria, Tynan and Burswood dealerships continued to operate independent service centres to service and repair vehicles, including Hondas.

Honda Australia admitted that in certain statements to thousands of customers it had breached the Australian Consumer Law by making misleading representations that the dealerships had closed and would no longer service Honda vehicles.

The company contested that other statements about the dealerships alleged by the ACCC were also in breach and the Federal Court concluded that these additional statements did not contravene the Australian Consumer Law.

“We took this case because we believed Honda Australia’s conduct harmed the dealerships and their customers,” ACCC Commissioner Liza Carver said.

“Honda Australia deprived consumers of the opportunity to make an informed choice about their options for servicing their vehicle. It also caused likely financial loss to the dealerships by the false claim they were closing or had closed.”

“The substantial penalty sends a strong message to all businesses about the consequences for making misleading statements to consumers,” Commissioner Carver said.

The ACCC commenced legal action against Honda Australia in April 2022.

Example of Honda Australia’s text message to Astoria, Tynan and Burswood customers:

Example of Honda Australia’s text message to Astoria, Tynan and Burswood

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