Ford Australia fined record $10 million for failing to fix gear boxes

CAR MAKER Ford has been fined $10 million after it wasted the time and money of thousands of customers who bought vehicles with faulty gear boxes.

It is the equal-largest penalty ever for a breach of Australian Consumer Law, matching that given to Coles in 2014 for misconduct towards suppliers.

The consumer watchdog took action against Ford Australia for mishandling customer complaints over cars that shuddered, jerked or lost power because of faulty transmissions.

Some customers were told it was their driving style causing the clutch problems, despite Ford knowing the gear box was at fault, the Australian Competition and Consumer Commission said.

The Federal Court on Thursday confirmed the $10 million penalty for engaging in unconscionable conduct relating to about 10,500 customer complaints between May 2015 and February 2016.

The complaints were over Ford’s Focus, Fiesta and EcoSport models sold between 2011 and 2016, which were fitted with a PowerShift transmission.

The gear boxes in many cases failed repeatedly and customers were made to fork out cash for replacement vehicles.

“In most cases, Ford refused to provide a refund or no-cost replacement vehicle to consumers, even after vehicles had undergone multiple repairs,” ACCC chairman Rod Sims said.

Ford has promised to establish a redress scheme and "make it right" with the customers who were mistreated.

"We took too long to identify the issues and we acknowledge that PowerShift customers did not have complaints handled appropriately," Ford Australia's chief executive Graeme Whickman said in a statement.

Some customers were asked to demonstrate the gear box problems on demand to dealers, even though Ford knew the problems were intermittent.

"(Ford) required customers to demonstrate them on demand in the presence of a dealer in order for repairs to be undertaken," Mr Sims said.

The car maker also failed to tell many customers of their legal entitlements to remedies available under the consumer guarantees, the court found.

The ACCC said the $10 million fine reflects the seriousness of Ford's misconduct.

"Buying a new car is a significant financial commitment and Ford's unconscionable conduct caused considerable distress and frustration to thousands of consumers," Mr Sims said.

Justice John Middleton said a large penalty was required to deter Ford and other car makers from mistreating customers in the future.

"Because so many customers deal with the car industry, it is imperative that those operating in it comply with the Australian Consumer Law," he told the court.

Ford will pay $500,000 towards the ACCC's legal costs.