The ACCC’s tough stance on misrepresentations to consumers regarding their consumer guarantee rights shows no signs of abating.

Rotten Apple?

The ACCC has agreed to accept a court enforceable undertaking from Apple Pty Limited after an investigation it undertook into Apple’s consumer guarantees practices.

Apple has acknowledged the concerns of the ACCC and has worked with it to resolve those. The ACCC was concerned that there may have been a contravention of the Australian Consumer Law by making false or misleading representations, including that Apple was not required to provide a refund, replacement or repair to consumers, contrary to the consumer guarantee rights. Apple had a 14 day return policy and a 12 month limited manufacturer’s warranty, and the ACCC was concerned that representations were being made that these policies were the only remedies available to a consumer.

In the undertaking, Apple has stated that, without limiting consumers’ rights, it will provide its own remedies equivalent to those in the ACL at any time within 24 months at the date of purchase while also acknowledging that remedies available under the ACL may be available beyond 24 months.

Apple has also undertaken not to make the representations about which the ACCC was concerned, and to continue to offer a redress program to consumers who may have been affected by the alleged conduct. It is also implementing a compliance program and will continue to monitor and review its compliance with the ACL.

More Harvey Norman woes

Another Harvey Norman franchisee, Camavit Pty Limited, has agreed to Federal Court orders that it pay $32,000 in civil pecuniary penalties for making false or misleading representations to consumers about their consumer guarantee rights.

Camavit’s employees had made representations in 2012 that a consumer would have to contact the manufacturer about a faulty television purchased at the store. Later, representations were made that the consumer could only receive a replacement, not a refund, and that an exchange or credit was available rather than a refund and that the store credit had to be used before the end of financial year. Camavit admitted that the representations were false and amounted to conduct contrary to section 18 of the ACL.

As well as the civil pecuniary penalty, Camavit has agreed to be restrained for 3 years from making any representation to customers that it:

  • Does not have an obligation to provide any remedy in relation to goods supplied by it regardless of the circumstances and the consumer guarantee provisions of the ACL.
  • Does not have an obligation to provide any remedy in relation to goods supplied by it on the basis that only the manufacturer has an obligation to do so.
  • Does not have an obligation to provide a return in relation to goods supplied by it regardless of the circumstances and the consumer guarantee provisions of the ACL.
  • Does not have any obligation to provide a remedy in relation to goods supplied by it other than by way of exchange or credit, which would have to be finalised within a time limit of a few weeks.

This follows hot on the heels of four other Harvey Norman franchisees being ordered to pay a combined total of $116,000 in civil pecuniary penalties for making misrepresentations about consumer guarantee rights. Examples of the misrepresentations include representations that:

  • The franchisee had no obligation to provide remedies for damaged goods unless notified within a short specified period, such as 14 days.
  • The franchisee had no obligation to provide an exchange or refund for faulty goods supplied.
  • The franchisee had no obligation to provide a remedy independently of the manufacturer.

Like the Camavit matter, declarations and injunctions were granted and the franchisees were ordered to implement compliance programs, and to display notices about consumer guarantee rights.

Take aways?

Although Camavit ultimately provided the consumer with a refund, the ACCC brought proceedings against it nearly a year later. It is apparent that the ACCC is looking to make examples of businesses which misrepresent consumers’ rights. Businesses should ensure they have in place training for staff about consumer guarantees and the importance of not misleading consumers about those rights.