South Korean car maker Kia has been forced to offer customer refunds after an investigation into its capped price service charges.
The probe by the Australian Competition and Consumer Commission (ACCC) was launched in response to concerns about the claimed fixed service pricing offered by Kia since 2012.
“At Kia, we believe that when you purchase a vehicle you should have a clear understanding of what it will cost to maintain your vehicle and optimise its value,” the car maker still states on its website.
But the investigation found the terms and conditions associated with servicing allowed Kia to raise prices without notice at any time, something the ACCC says amounted to misleading representation in contravention of the Australian Consumer Law.
The ACCC said Kia raised prices four times, meaning customers were paying more than the maximum charge advised at the time they bought their car.
“Businesses that make capped price offers of this type in their advertising campaigns or represent that consumers can fix the maximum charge for particular services must ensure that these offers are not eroded by later reliance on amendment provisions in their terms and conditions which permit price changes,” said ACCC commissioner Sarah Court.
Kia has now agreed to change its terms and conditions so that service charges are locked in at the price advised when the car is bought.
It will also offer those who have paid higher charges a refund of the difference, and write to customers clarifying what their future service charges will be.
“Kia is committed to customer service and takes its obligations under the Australian Consumer Law very seriously. It cooperated fully with the ACCC,” said the car maker in a statement about the investigation on its website.
The ACCC said it decided not to prosecute because of Kia’s cooperation, saving the car maker a potential fine of up to $1.1 million.
The corporate watchdog added that it is now turning its focus to other car brands offering capped service costs, to ensure they are compliant with the rules.