Retailers be warned – you cannot limit consumer guarantees

A total of 9 Federal Court judgments with penalties totalling $234,000 have been successfully brought by the ACCC against Harvey Norman franchisees for making false or misleading representations regarding consumer guarantee rights.

Examples of the misrepresentations made include:

  • the franchisee had no obligation to provide a remedy while the relevant product was still covered by the manufacturer’s warranty;
  • the franchisee had no obligation to provide consumers with a choice of remedy if the relevant product was supplied more than three months ago; and
  • the consumer would have to pay a postage and handling fee before the relevant product could be returned from the manufacturer.

Some of the franchisees concerned were ordered to display in-store corrective notices and implement a consumer law compliance program.

What rights do consumers have?

For goods purchased after 1 January 2011 (when the Australian Consumer Law was introduced), consumers have a set of rights called consumer guarantees, that:

  • goods will be of acceptable quality;
  • goods will be fit for any disclose purpose;
  • goods will match any description under which it is sold;
  • goods will have spare parts available for a reasonable time; and
  • all express warranties offered will be honoured.

If the good concerned has a major fault, the consumer is entitled to a replacement or refund from the supplier of the good.

If the good concerned has a minor fault, the consumer is entitled to have the good remedied (that is, fixed) within a reasonable time.  If the supplier does not fix the good, then the consumer can either reject the good and get a refund, or have the problem fixed elsewhere and recover reasonable costs of doing so from the supplier.

For more information on consumer rights, visit the ACCC’s consumer rights & guarantees page.

If your organisation would like further information about its trade practices obligations, or if you require a customised trade practices compliance program for your organisation, contact Melissa Lammers for further information.

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