05 February 2012

Toyota GB has issued a strong denial of a Sunday Times Insight story accusing the company and its dealers of acting unethically towards customers over warranty claims. According to the Sunday Times, a “secret policy” issued by Toyota prevented dealers from fixing defects under warranty unless they related to safety and reliability or had initially been raised by the customer themselves.

According to the paper, this meant that dealers could “disregard a catalogue of faults” that might be found during routine servicing or inspection, if they had not been mentioned by the customer.

But, in a statement issued within hours of the article being published, Toyota GB said: “All manufacturing defects, however identified, are covered by the Toyota warranty.

“Toyota dealer technicians can and do bring to the attention of customers any type of fault (including purely cosmetic faults), regardless of the cause, which they find on a vehicle, whether or not previously raised by the customer.”

The company also said it “completely refutes the accusation that it or its dealers act unethically or seek to deceive customers by failing to notify them of non-safety or reliability manufacturing defects whilst a vehicle is under warranty”.

At the heart of the Sunday Times story appears to be the terms under which Toyota dealerships can reclaim for work carried out under warranty. The story alleges that dealers caught carrying out “cosmetic” faults under warranty without a customer complaint can be fined up-to four times the cost of the work.

According to the story, concerns about the ethics of such a policy were raised at a regional meeting in November 2009. Toyota GB told Auto Retail Network the issue was raised by one dealer at one meeting; they were not followed up or raised by any other dealers or the national dealer council despite the minutes of the regional meeting being widely circulated.

There are also allegations in the story that implementing such a policy meant customers could suddenly be charged for work once the car was out of warranty.

David Duke, named as a former warranty manager at Toll House, was quoted as saying: “The minute the warranty is expired and the financial responsibility is transferred to the customer, we could report as many faults as possible.”

Toyota said its operated a “generous goodwill policy” to deal with cases that fall outside the formal warranty period.

Warranty work at Toyota dealerships is carried out on a self-authorised basis and then audited by Toyota GB. The company said this was “to ensure the consistent application of the claim administration process and that the customer is notified of any faults found with their vehicle”.

It also noted that it “believes all other major manufacturers carry out warranty audits and make chargebacks and/or impose financial penalties on their dealers for non-compliance with warranty procedures”.

Toyota has set up a helpline to answer questions from any customers concerned about the story and is briefing its franchised network. The company told Auto Retail Network it had “no plans at this stage” to take any action against the Sunday Times over the allegations.