The Federal Court has ordered a Harvey Norman franchisee, to pay a total of $52,000 in penalties for making false or misleading representations regarding consumer guarantee rights, in proceedings brought by the Australian Competition and Consumer Commission.
Under the Australian Consumer Law, when consumers buy products, they come with a guarantee that they will be of acceptable quality. Non-defective, safe and reasonably durable.
The "guarantee of acceptable quality" is in addition to and is not limited to any manufacturer’s warranty — and in many cases, it will apply for longer than the manufacturer’s warranty.
If the product doesn't meet these standards, customers are entitled a refund, replacement or repair, at no cost. These rights cannot be excluded from a businesses terms and conditions of sale.
Sales staff at the Harvey Norman Superstore Bundall in Queensland told customers on no less than ten occasions that the franchisee was in no way obligated to give customers refund, replacement or repair of any products of unacceptable quality.
They instead referred customers to the manufacturer.
In some cases the customers were told the store couldn't help them unless they paid for some or all of the required repairs.
"Products sold in Australia come with a consumer guarantee under the Australian Consumer Law that they will be of acceptable quality. Faulty products must be repaired, replaced, or a refund must be provided by the retailer," ACCC Acting Chair Dr Michael Schaper said.
"This penalty is a timely reminder to all businesses, whether large or small, that they must not mislead consumers about consumer guarantee rights under the Australian Consumer Law."
"Businesses are expected to take appropriate and effective steps to ensure that their staff understand the rights of consumers and the obligations of businesses under the consumer guarantees provided by the Australian Consumer Law," Dr Schaper said.