It pays to know consumer rights
There’s an important lesson for both consumers and retailers in a recent decision by the ACCC to take legal action against a series of store franchises for allegedly misrepresenting consumer rights.
The Australian Competition and Consumer Commission said last month it had ordered legal proceedings against nine whitegoods franchise stores on the grounds they had allegedly not properly informed customers of their rights under consumer laws.
The ACCC alleged the stores had falsely told customers:
* the store 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 store had no obligation to provide remedies for goods still covered by the manufacturer’s warranty, and
* consumers must pay a fee for the repair and return of faulty products.
In July the ACCC won a court order forcing a computer company to pay a $3 million civil pecuniary penalty for making false or misleading representations to customers and retailers regarding consumer guarantee rights.
A court found the company had falsely told customers their only remedy was at the firm’s discretion, that customers had to have products repaired multiple times before they were entitled to a replacement, the warranty period was limited to a specified express warranty period and customers had to pay for repairs outside that period, and that products purchased online could only be returned to the firm at the firm’s sole discretion.
Under Australian consumer laws, products and services come with automatic guarantees that the products will work and do what you asked for. Products bought after 1 January 2011 must be of acceptable quality – be safe, lasting and with no faults, look acceptable and do all the things someone would normally expect them to do. This also applies to products on sale, bought on the Internet, and second hand products taking into account age and condition.
You can claim repairs, replacement or refund from the retailer as remedy. The retailer can’t refuse to help you by sending you to the manufacturer or importer.
Retailers and manufacturers should get legal advice on their responsibilities under consumer laws as the consequences can be expensive and can result in very bad PR. Businesses must guarantee products they sell, hire or lease for under $40,000. Goods over this price have to be for personal or household use.
Consumers too should know their rights and be wary of retailers who try to sell extended warranties that may not be necessary as the laws already protect them.