The ACCC has identified consumer guarantees as a matter of
particular concern, having received more than 16,000 complaints in
the last year.
As a result of the ACCC's crusade, 11 Harvey Norman
franchisees are in the ACCC's firing line for allegedly
misleading consumers by saying they did not have to give a refund
or exchange for goods with a major fault. This contravenes
Australian Consumer Law.
ACCC Chairman Rod Sims said "The Australian Consumer Law
provides consumers with rights to certain remedies from retailers
and manufacturers when goods fail to comply with the consumer
guarantee provisions, including that goods are of acceptable
quality and fit for the purpose for which they were sold".
The ACCC alleges that the franchisees misled consumers who
purchased faulty mobile phones, laptops, refrigerators and espresso
machine about these rights by making representations including
the franchisee had no obligation to provide remedies for
damaged goods unless notified within a specific period of time such
as 24 hours or 14 days;
the franchisee had no obligation to provide remedies for goods
still covered by the manufacturers warranty;
the franchisee had no obligation to provide refunds or
replacements for particular items such as large appliances or items
priced below a certain amount; and
consumer must pay a fee for the repair and return of faulty
The ACCC says that a consumer's rights under the Australian
Consumer Law "cannot be excluded, restricted or modified"
as Australian consumers have the right to ask for repairs,
replacement or a refund if goods are faulty, unsafe, look
unacceptable or do not do what they are supposed to do.
The alleged actions of the 11 franchisees have caused the ACCC
to commence Federal Court proceedings against them.
Each contravention carries a potential infringement notice fine
of $6,600 or penalties of up to $1.1 million.
It will be interesting to see the defence the 11 franchisees put
on in response to the ACCC's allegations.
The case against the 11 Harvey Norman franchisees is not the
first of its kind, with the ACCC having commenced proceedings in
the Federal Court against Hewlett-Packard Australia Pty Ltd (a
wholly owned subsidiary of Hewlett-Packard Company)
("HP") on 16 October 2012 for alleged contraventions of
the Australian Consumer Law by making false or misleading
consumers in relation to consumers' statutory warranties
and consumer guarantee rights; and
retailers that HP was not liable to indemnify them if they
provided consumers with a refund or replacement without HP's
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The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
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