Impacts of the VW emissions defeat devices for Qld motor dealers

Brian Bauer,
Executive Director Office of Fair Trading

As motor dealers, you will no doubt have been closely following the Volkswagen emissions defeat device saga.

The Volkswagen Group fitted ‘defeat device’ software to vehicles to achieve lower emission results when in a test environment. When the vehicle is being driven normally, the software turns off the device so the car can perform to maximum power/torque/mileage.

The devices are present in some Volkswagen, Audi and Skoda diesel models. Recent media coverage now suggests the devices may be in other models as well, including Porsche models and some petrol models.

VW has committed to recalling affected models, with recall procedures to be sent directly to vehicle owners as they become available.

Investigation

The Australian Competition and Consumer Commission (ACCC) has launched an investigation into the possible use of ‘defeat devices’ in Australia. It will consider whether VW has:

  •  breached the Australian Consumer Law’s provisions that prohibit false or misleading claims.
  •  failed to meet mandatory safety standards.

Using defeat devices in vehicles is specifically prohibited under the Australian Design Rules, which are included in the Australian Consumer Law (ACL) as mandatory safety standards.

There are serious penalties if a corporation is found to have breached sections of the ACL with fines of up to $1.1 million per contravention applicable.

Impacts for Queensland motor dealers (both new and used)

Claims relating to environmental benefits or fuel efficiency of a vehicle can influence a consumer’s choice of make and model. That is why you must be able to substantiate any claims you make about a vehicle.

While affected vehicles are safe to drive and sell, dealers and suppliers are obliged by law to fully disclose to prospective buyers if a vehicle contains a defeat device and that it will be subject to a recall.

Under the Motor Dealer and Chattel Auctioneer Act 2014 (MDCA), motor dealers or salespersons must not represent anything that is false or misleading about goods. This includes the wilful concealment of a material fact. A material fact is information that would be important to the average consumer in deciding whether to purchase the car and would include the existence of defeat devices, issues relating to vehicle performance or emissions, and the necessity for manufacturer recalls. Under the MDCA licensees and salespeople can be fined up to $63,612 for each false or misleading representation made.

What you can do

To check whether a vehicle in your dealership is affected, you will need to know the Vehicle Identification Number (VIN) and then check it against a list on the manufacturer’s website. If you have an affected vehicle, you should contact the manufacturer directly. At this point in time, brands to check include Volkswagen, Audi and Skoda. However this list may expand in the future to include other VW brands.

The OFT is encouraging motor dealers and salespeople to be open and transparent in discussions with all buyers, but particularly those interested in the Volkswagen, Skoda and Audi brands.

Ongoing updates, and guidance for motor dealers, are available on our website at www.qld.gov.au/fairtrading