The Federal Court has ordered AA Machinery Pty Ltd (trading as Agrison) to pay a penalty of $220,000 after it admitted making false or misleading representations to customers about the warranties and after-sales services, in breach of the Australian Consumer Law.
The Court also ordered Agrison to pay redress to four consumers that bought tractors or wheel loaders, which will amount to approximately $64,000.
Agrison admitted it made false or misleading representations that its tractors came with a five-year nationwide warranty and that, if the tractor was defective, Agrison would provide a replacement for all defective parts at no cost to the consumer for five years. However, not all parts were covered for five years or at all and the full cost was not covered.
Agrison also admitted it misled consumers by representing that it had a national service network accessible throughout Australia, and that customers would be able to obtain all necessary spare parts for tractors within a reasonable time if and when required. However, Agrison did not have a national service network and had no reasonable grounds for making the claim about spare parts.
“The ACCC took court action after it received complaints from consumers who had experienced multiple significant failures with their tractors, such as faulty hydraulics, brakes failing and parts such as wheels falling off,” ACCC Chair Rod Sims said.
“Consumers rely on the representations made to them when they are looking to buy agricultural machinery, and the warranties given by the supplier and reliability of aftersales service are critical factors for consumers making these expensive purchases.”
Justice Murphy said that “Agrison’s conduct was deliberate and it was not isolated, having occurred over several years.”
The Court also ordered Agrison not to make any future unqualified representations about the scope or term of the warranty. Agrison was also ordered to publish a corrective notice on its website, outlining the outcome of the ACCC’s action.
“This case is a reminder for all businesses that they cannot make representations about their warranties and after sales services without the ability to back up their claims,” Mr Sims said.
“We were concerned that when customers approached Agrison to resolve their complaints, they were unable to contact Agrison, struggled to have their product fixed under warranty and were unable to access the promised national service network or spare parts.”
In addition to the court orders, Agrison and its sole director, Mr Volkan “Nick” Yokus, also provided the ACCC with a court-enforceable undertaking.
The undertaking prevents Mr Yokus from being involved in any other business that sells tractors for five years, without the ACCC’s consent.
Under the undertaking, Agrison is required to set up an electronic complaints system and provide a report on complaints received and the steps it has taken to resolve them to the ACCC. Any consumers affected by Agrison’s misrepresentations should contact Agrison to resolve their complaint.
Agrison will also conduct Australian Consumer Law compliance training for its staff.
A copy of the undertaking is available on the public register: AA Machinery Pty Ltd
Background
Agrison is a supplier of a range of agricultural equipment to Australian consumers, including several models of Agrison branded tractors and wheel loaders, ranging in price from $18,000 to $60,000. The business is based in Victoria but sells and delivers tractors nationally. Agrison’s sole director is Mr Yokus.
Under the Australian Consumer Law, corporations must not make false or misleading representations, including in relation to the availability of spare parts or the nature of a warranty.
A wheel loader is a type of machinery often used to transport material such as rubble, gravel or soil around a farm or work site.
