Since the ACCC identified consumer guarantees as an area of
national policy priority in 2012, they have so far commenced
enforcement actions against numerous businesses and have issued
financial penalties up to a sum of $203,500 for breaches of the
consumer guarantees. This is only the start of the ACCC's
campaign in this area. Is your business at risk or is your business
Although the consumer guarantees have been introduced recently,
the ACCC is active in its commitment to compliance by continually
bringing cases before the Federal Court. As early as 19 April 2011,
the Federal Court imposed penalties totaling $203,500 against MSY
Technology Pty Ltd and four of its related companies ("MSY
Companies") for making false and misleading representations
regarding the consumer warranties. In that case, the Court found
that the MSY Companies:
did not provide statutory warranties to consumers with their
required consumers to pay a fee to obtain a warranty beyond
that provided by the manufacturer.
The ACCC commenced proceedings against Hewlett-Packard Australia
Pty Ltd ("HP") on 22 October 2012 for making false and
misleading representations to:
consumers in relation to consumers' statutory warranty and
consumer guarantee rights;
retailers that HP was not liable to indemnify the retailer if
they provided consumers with a refund or replacement without
HP's prior authorization; and
retailers that HP has no obligations and rights under the
Australia Consumer Law ("ACL") in circumstances where HP
products were not of acceptable quality.
Furthermore, ACCC alleges that HP wrongly represented that:
remedies available for faulty HP goods were limited to HP's
consumers could only receive a replacement if there had been a
previous attempt to repair the goods by HP;
warranties were limited to the express warranty period and
that, following the expiration of that period consumers would have
to pay HP for carrying out any required repairs on the HP
consumers could not return or exchange HP goods purchased from
the HP online store unless, it was otherwise agreed by HP, and at
HP's sole discretion.
The ACCC has also commenced proceedings against 11 Harvey Norman
franchisees on 20 November 2012 for misleading and deceptive
conduct. The allegations by the ACCC was that the franchisees made
false and misleading representations to consumers in relation to
their consumer guarantee rights under the ACL. Such representations
the consumers had no remedies if they had not notified the
franchisee about damaged products within a specific period of time
such as 24 hours or 7 days;
the franchisee had no obligation to the consumer to provide
remedies for products still covered by manufacturer's
the franchisee had no obligations to the consumer to provide
refunds or replacement for particular items or items priced below a
specific amount; and
that the customers must pay a fee for the repair and return of
What should you do?
Businesses need to ensure that they make accurate and correct
representations relating to consumer guarantees and express
warranties and that they do not mislead by making incorrect
misrepresentations to consumers. Further information on consumer
guarantees can be found by clicking
here and information on warranties against defects can be found
It is not too late to comply. If businesses have not already
done so, they should:
determine whether its activities fall within the ambit of the
ensure that all consumer contracts and sale terms and
conditions are reviewed so as to be ACL compliant and to ensure
ensure all warranties against defects/express warranties are
reviewed for compliance;
ensure all advertising material is reviewed for
ensure that all employees, including sales staff, are aware of
the ACL and that everyone is ready to implement the necessary steps
to accommodate the ACL.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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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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