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Ford agrees to R35m fine and compensation for 56 Kuga owners whose vehicles caught fire

Admits to contravening the provisions of the Consumer Protection Act.

The Ford Motor Company of Southern Africa has agreed to pay a fine of R35 million and to offer three compensation options to the 56 Ford Kuga 1.6 EcoBoost owners whose vehicles caught fire, in agreement with the National Consumer Commission (NCC).

Thezi Mabuza, acting commissioner of the NCC, confirmed on Sunday that the settlement agreement is “limited to 56 Ford Kuga owners whose cars caught fire and, over and above that, any other claim for financial loss that is quantifiable”.

Read: Kuga deaths: Ford SA initiates settlement negotiation

These other claims for financial loss could include owners of Ford Kuga 1.6 EcoBoosts who believe they have suffered financial loss because of a reduction in the resale value of their vehicles as a result of the negative publicity generated by the spontaneous fires in some of these vehicles.

“If there are any new aspects of complaints, the NCC will look into them in terms of the Consumer Protection Act [CPA],” she said.

Read: Gerrie Nel tackles Ford on Kuga death

Ford GM of communications, Minesh Bhagaloo said at the weekend that Ford had agreed to the settlement with the NCC following the commission’s investigation into Ford Kuga recalls in 2017.

“This proposed agreement will now be considered by the Consumer Tribunal for finalisation,” he said.

“We are committed to doing the right thing for our customers. We have learnt from these events and we continue to cooperate with the NCC in order to finalise this matter.”

Read: Ford recalls Kuga with NCC gun against its head

The R35 million fine was imposed on Ford after it acknowledged that it contravened the CPA following complaints that the Kuga 1.6 EcoBoost was combusting either while being driven or when parked.

The fine and settlement agreement took into account the R335 million Ford has spent on three recalls of the model.

Under pressure from the NCC, Ford in January 2017 launched a voluntary safety recall for 4 566 Kuga 1.6 models to address an engine overheating problem that had caused fires in some of the vehicles.

The NCC investigated Ford’s conduct after it received 160 complaints from consumers who alleged that their consumer rights were being infringed by the company.

Read: More Ford Kuga complaints by the day – NCC

Mabuza said Ford admitted to engaging in prohibited conduct by distributing Ford Kuga vehicles that failed or could have failed as a result of the cooling system failure.

‘Not suitable’

She said the failure of the cooling system rendered the vehicles not suitable for the purpose for which they were intended and resulted in the vehicles being unsafe during the time of the fires.

Mabuza said the investigation found no relationship between the Ford Escape in foreign markets and the Ford Kugas sold in South Africa.

Former NCC commissioner Ebrahim Mohamed told the parliamentary portfolio committee on trade and industry in March 2018 that fears and concerns were expressed in South Africa that the Ford Kugas sold in South Africa was the same as the Ford Escape, which was recalled in foreign markets as a result of spontaneous fires.

However, Mabuza said the NCC investigation revealed that those concerns were not true.

Mabuza said Ford has acknowledged that it is liable for the harm caused in terms of the CPA and, while it has already compensated the owners of Kuga vehicles that burned, further compensation has been offered.

Compensation options

The 59 owners of Ford Kuga 1.6 EcoBoost vehicles that burnt have been offered three compensation options, including a payment of R50 000 to each of those consumers who were owners or in lawful possession of a vehicle that combusted, resulting in these consumers suffering loss as contemplated by the CPA.

The payment of the R50 000, if accepted by these consumers, will be in full and final settlement of all claims they may have against Ford as a result of the damaged or recalled vehicles.

Two options are available to consumers whose Kuga 1.6 EcoBoosts burnt and who believe they are entitled to compensation in excess of R50 000.

These consumers may submit a claim against Ford in terms of the CPA via an alternative dispute resolution service as contemplated in the act, or proceed to prove damages in court.

Mabuza said the NCC understands that arguing damages claims in court can be costly and it was therefore agreed that Advocate Terry Motau would provide the alternative dispute resolution services.

“We will communicate with the individual consumers who filed their complaints with the commission to determine the route they elect and to provide any guidance, should they so require, on the claims process,” she said.

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The CC’s compromise agreement with Ford raises concern, leaves Ford grinning and kouga owners confused and dissatisfied. The competency and independence of the commission should be investigated.

What are the chances that I will ever by a Ford. Any Ford.

Shocking, incompetent and egregious mediation behaviour by the NCC.

This “settlement” was just a means for the NCC to shake the money tree for their own end. The derisory award to the real victims is outright insulting.

The Ford Motor Company are just scumbags.

Shocking that the NCC accepted a very compromising deal on behalf of consumers, i.e a lousy R50 000. That amount is way less than what one would pay to replace the entire engine including the cooling system for the Kuga. On top of that lousy amount, affected consumers continued paying monthly instalments to financial institutions that funded those Ford furnaces yet weren’t yielding any value from the recalled cars.

To all affected consumers, please organise yourselves and fight this ridiculous pay-out, also requesting to see how the NCC determined that the R50 000 was sufficient compensation.

#NotAFordDriver

The real winner is the Competition Commission. Their R35million payout is ten times the value received by the combined owners whose cars burned and whose lives were at risk. R35million would have been enough money for Ford to buy back all those dud cars, and it would have sent a stronger message than merely a fine.

What a good bonus for the board of the NCC… Consumer always screwd…

They exist for themselves…………..as do all “regulators” worldwide.

Generally just a socialist con.

Agreed, what about increased premiums because of insurance claim for the burnt out vehicle? Furthermore, if the vehicle burnt then the value of the vehicle should be paid out?

Agree with Joe, leonspies and Doctor. The real economic power is in the hands of the consumer. BUT only if there is concerted and broad action. I have driven Fords in the past but already decided at the start of this saga that I’d never do so again. The SA consumer can teach them a lesson if they choose to.

So the govt scores R35m, ex owners R50k and those stuck with Kugas with appalling resale values get zero.

I will never in my life by a Ford.

They were fully aware of the problems but denied all the way and tried to worm their way out of it.

Fk Ford

If this happened in the US FORD would have been killed by the authorities and if not their class action lawsuits would have decimated that useless purveyor of junk cars.
they make sure they have a”Local” affiliate to ensure they will not be taken to task in the US. Only the profits go there not the problems.

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