Agrison to pay penalty and compensation for misleading tractor buyers

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

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

Agrison admitted to The Federal Court misleading representations 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 Volkan (Nick) 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 printed below.

If you want to know what customers have experienced dealing with Agrison, log onto recent product reviews, here.

Background to Agrison

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 Volkan (Nick) 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.

Undertaking ordered for AA Machinery Pty Ltd

Undertaking date: 25 October 2021 Undertaking type: s.87B undertaking Section: sections 18 and 29 of the Australian Consumer Law Industry: Agricultural Machinery and Equipment

Company or individual details

  • Name: AA Machinery Pty Ltd ACN: 606 535 933
  • Volkan Yokus (this entry is an individual, not a company)

Undertaking

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from AA Machinery Pty Ltd (trading as Agrison) and its sole Director, Mr Volkan (Nick) Yokus (Mr Yokus), in relation to representations concerning consumers’ rights under a warranty and the availability of after sales service and spare parts.

Agrison is a supplier of agriculture equipment to Australian consumers, including several models of Agrison branded tractors and wheel loaders.

The ACCC issued proceedings against Agrison on 2 September 2019 in the Federal Court of Australia. The ACCC and Agrison have agreed to resolve the Proceeding by way of consent orders, including declarations that, since 1 August 2017, Agrison made false or misleading representations in breach of sections 18 and 29 of the ACL that:

  • its tractors and wheel loaders had a five year nationwide warranty in circumstances where the Warranty was limited to parts only, not all parts were covered for five years or at all and the full cost of all parts was not covered;
  • Agrison had a national service network, and therefore customers requiring after-sales service or repair staff could access them throughout Australia in circumstances where Agrison did not have a national service network available to customers throughout Australia; and
  • a customer would be able to obtain all necessary spare parts for tractors and wheel loaders within a reasonable time, if and when required in circumstances where Agrison had no reasonable grounds to make such a representation.

The Federal Court also ordered Agrison to pay a pecuniary penalty of $220,000 and pay redress to four consumers totalling $63,947.50. To address the ACCC’s concerns, Agrison also provided the ACCC with a section 87B undertaking that it will, in summary:

  • cease and remove all advertising that does not comply with this undertaking;
  • set out the limitations that apply, either in time or scope, in respect to any advertised express warranty for tractors or wheel loaders;
  • publish limitations of a warranty in advertising in the same font as the reference to the warranty itself;
  • include a clear and prominent link to the terms of any warranty that is referenced on a website controlled by Agrison;
  • ensure that a full copy of the terms of an applicable warranty is given to a customer before Agrison accepts payment for a new tractor or wheel loader;
  • require all Agrison employees and representatives involved in advertising, sales or after-sales support to attend practical training on compliance with the ACL on an annual basis and maintain documents relating to the training;
  • create a complaint handling system; and
  • report in writing to the ACCC on complaints received within 7 months of the system being set up.

In addition, Agrison’s sole director, Mr Volkan (Nick) Yokus, has undertaken that, for a period of 5 years, he will:

  • not be involved (whether as director, manager, or otherwise) in any business that imports or sells tractors or wheel loaders other than the business carried on by Agrison, without the ACCC’s prior written consent; and
  • if the ACCC provides written consent, he will take all reasonable steps to ensure the new business complies with each of the undertakings given by Agrison, listed above.

The undertakings provided by Agrison and Mr Volkan (Nick) Yokus last five years from the commencement date.