Putrajaya may roll out 'lemon law' for defective vehicles in March 2025

PUTRAJAYA: The Ministry of Domestic Trade and Cost of Living is aiming to introduce a “lemon law” or amend existing Acts related to defective vehicles in March next year for better consumer protection.

Its minister, Datuk Armizan Mohd Ali, said a team of law experts has been appointed to prepare a report on best practices implemented in several countries, and to engage with relevant parties.

“They will start work from June until the end of September, and submit a comprehensive report to the ministry,” he told reporters after opening the Malaysian Consumer Symposium 2024 here today.

The “lemon law” provides a remedy for buyers of motor vehicles and other consumer goods to obtain compensation for products that repeatedly fail to meet quality and performance standards.

Armizan said there are four laws with the “lemon law” features, such as the Consumer Protection Act (Act 599), the Contract Act 1950, the Sale of Goods Act 1950, and the Hire-Purchase Act 1967.

He said his ministry, in the meantime, will activate two consumer protection strategies, namely the formation of a negotiation taskforce for motor vehicle complaints involving a tripartite negotiation among the ministry, buyers and distributors, or manufacturers; and the strengthening of the Tribunal for Consumer Claims Malaysia process, through cooperation with Bank Negara Malaysia.

This special negotiation involves new private vehicles (cars or motorcycles) not more than six months old from the date of registration that are still under the valid warranty period, and have yet to be modified, among other matters.

He said consumers facing issues with their new motor vehicles, whose initial claims with the manufacturers have been unsuccessful, can submit their complaints through the ministry’s official channels.

Armizan said that his ministry is also getting Bank Negara’s cooperation to facilitate the issuance of consent letters by banking or financial institutions, to allow consumers to make compensation claims at the tribunal or the court.

He said one of the constraints that consumers face when seeking compensation for faulty new vehicles is the difficulty in getting consent letters due to ownership issues under the Hire-Purchase Act 1967, that allows the vehicles to be transferred to the consumer only upon completion of payment.

“It is expected that through this second strategy, consumers can successfully resolve their claims at the tribunal,” he said.

“…the government sincerely hopes that industry players, especially the automotive industry, are willing to respond to the government’s aspirations (in helping consumers) and cooperate in protecting consumer rights and fostering a fair and transparent market,” Armizan added.