ACCC Calls Out Carmakers On Capped-price Servicing Terms

The Australian Competition and Consumer Commission (ACCC) has warned carmakers to review the terms and conditions of their capped-price servicing programs this week after taking Kia to task for misleading buyers.

A probe into the Korean carmaker’s program found that wording in the terms and conditions that allows prices to be raised at any time amounted to “misleading representation to customers” and is in contravention of the Australian Consumer Law.

The investigation found that Kia had raised prices four times since launching its capped-price servicing program in 2012.

The ACCC has confirmed that Kia fully cooperated with the investigation, avoiding a fine of up to $1.1 million in the process.

In a statement today, Kia said that it has written to affected customers to offer refunds on any amounts paid above the expected pricing. It has also amended the terms and conditions of its capped-price servicing program to ensure that prices are now genuinely capped from the time of purchase.

“Kia is committed to customer service and takes its obligations under the Australian Consumer Law very seriously,” the company said in a statement today.

“It cooperated fully with the ACCC to assist the regulator with its investigation which has now concluded. In consultation with the ACCC, Kia has agreed to make changes to its capped-price servicing program.”

ACCC Commissioner Sarah Court said today that attention will now be turned to other capped-price servicing programs to assess whether any similar issues have or could occur.

Kia is far from the only carmaker in Australia to reserve the right in their terms and conditions to change pricing at any time.

Last year, TMR published an exhaustive list of Australia’s capped-price servicing offers, highlighting the ‘Menu’ pricing adopted by a number of brands.

“Much like the menu in a restaurant, this form of Capped-Price Servicing offers a list of what each service contains and what it will cost. Each scheduled service may be a different price depending upon the nature of the service,” our report warned.

“But like that favourite burger of yours, when the cost-price of pineapple or any other key ingredient goes up, so does the burger.”

Find our link to the full list, and an explanation of each type of offer, below.

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