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Victorians with dodgy cars are battling a broken system
Car dealers aren't honouring consumer guarantees and the tribunal system is failing consumers, says new report.
Last updated: 24 Oct 2023
Victorian car owners with faulty vehicles are facing a myriad of problems, from dealers refusing to honour consumer rights, to an overly complex tribunal and complaints system.
These are the findings of a new report by the Consumer Policy Research Centre (CPRC), which surveyed over 1000 Victorian car owners and conducted in-depth interviews with those who had tried to navigate the Victorian Civil and Administrative Tribunal (VCAT) system for complaints.
“What we found was that a lot of people have a faulty car, it’s hard to get a fix and dealers aren’t working with people to get problems fixed early,” says CPRC CEO Erin Turner.
“When you need to escalate a complaint it’s really difficult, it’s long, it’s costly and therefore most people don’t get to a formal complaints process because it is too hard.”
When you need to escalate a complaint it’s really difficult, it’s long, it’s costly and therefore most people don’t get to a formal complaints process because it is too hard
Consumer Policy Research Centre CEO Erin Turner
The report, commissioned by the Consumer Action Law Centre, found that from the point of knowing about a fault with a car to getting a resolution at VCAT, the consumer had to go through at least 60 different steps. Many of these included long delays, documentation in overly legal language and assessments of the vehicle that cost the consumer thousands of dollars.
“This isn’t a system you would design if you want to help people solve problems, this is a system where people succeed despite VCAT, not because of it,” Turner says.
Ashleigh’s story
When Ashleigh Bok purchased a second-hand Fiat earlier this year from a dealership in Melbourne’s western suburbs, she had issues with the car almost immediately.
“I asked them to fix the car because it still had three months’ warranty, but basically they car-napped my car. They would take it for weeks at a time pretending to fix it, but it would just sit there at the dealership,” she says.
They would take it for weeks at a time pretending to fix it, but it would just sit there at the dealership
Consumer Ashleigh Bok
She says the loss of the vehicle has led to significant financial issues for her and her partner, who is unable to find employment without access to the car.
“We are stuck in debt and he can’t work. We are finding it very hard to buy groceries now,” she says.
No incentives to fix
Turner says the report highlights the lack of incentives for car dealers to resolve issues with customers earlier in the process. Dealers are benefitting from a long, drawn-out complaints process that can take up to two years for a resolution.
“There are certainly some businesses out there that are taking advantage of the system and relying on people dropping out of the process,” Turner says.
Dealers are benefitting from a long, drawn-out complaints process that can take up to two years for a resolution
She adds that in many cases customers accepted “lowball” offers of compensation from the dealer rather than going through the long process of fighting for their full consumer rights, due to the difficulties of the complaints tribunal process.
“This research is pretty definitive, VCAT isn’t working for consumers that go through it,” she says.
Consumer guarantees and ombudsman schemes
Across Australia there are currently no penalties for businesses that fail to honour consumer guarantees to a right to repair, refund or replacement. In many cases dealers can breach the law with no financial consequences.
That was the case with the Aboriginal couple Peter and Marilyn in the Far North Queensland community of Wujal Wujal, where CHOICE reported on lemon car issues facing remote First Nations people last year.
Their car had broken down on the same day of purchase and after a lengthy, year-long process, they eventually won against their dealer in the Queensland Civil and Administrative Tribunal. The judge ordered the dealer repay the couple over $9000 of the purchase price, but the dealer refused to comply with the order and appealed.
Turner says the introduction of penalties for consumer guarantee failures into Australian Consumer Law would go a long way to encouraging businesses to resolve complaints sooner.
We need a better complaints system that helps people articulate and identify issues and that doesn’t put all the effort and energy on the consumer
Consumer Policy Research Centre CEO Erin Turner
She adds that an Ombudsman scheme, similar to those that exist for complaints in essential service sectors, could help Victoria deal with the deluge of complaints that go to VCAT every year.
“We need a better complaints system that helps people articulate and identify issues and that doesn’t put all the effort and energy on the consumer, but does it fairly, efficiently and in an accessible way,” says Turner.
“Ombuds systems are set up to do that, they are not perfect, but when you look at ombuds systems in finance, in energy, in telecommunications they offer people more support than we see through tribunals. It shows there are better ways to do this.” she adds.
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Car dealers aren't honouring consumer guarantees and the tribunal system is failing consumers, says new report.
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CHOICE travels to the remote Indigenous community of Wujal Wujal in Far North Qld to investigate dodgy motor vehicle sales.