Harvey Norman franchisee fined $52,000

A Harvey Norman Superstore Bundall in Queensland (Bunavit Pty Ltd) has been charged a sum of $52,000 in penalties by the Federal Court for making false or misleading representations about consumer guarantee rights.

The franchisee’s sales representatives allegedly made a total of 10 misleading representations about consumer guarantees, stating there was no requirement for the retailer to remedy faulty goods and that consumers would have to go directly to the manufacturer to obtain the manufacturer’s warranty. Bunavit also claimed that it could not assist further unless consumers paid for some or all of the repair costs.

The issue appears to be widespread, as the ACCC has now received $286,000 worth of penalty orders against 10 Harvey Norman franchisees for misleading representations about consumer guarantees.

Under Australian Consumer Law, there are four clear guidelines about consumer guarantees after a purchase has been made:

  1. Purchased products come with a guarantee that they are of acceptable quality. This means the they are free from defects, safe and durable as a reasonable consumer would regard as acceptable;
  2. The guarantee of acceptable quality is in addition to the manufacturer’s warranty;
  3. The guarantee is not restricted to the duration of the manufacturer’s warranty. So in many cases, it will apply for longer than the manufacturer’s warranty;
  4. If the product is not of acceptable quality, consumers are entitled to remedies, such as a refund, replacement or repair, without any costs to the consumer.

“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,” ACCC Acting Chair Dr Schaper said.

For more information about consumer guarantees check http://www.accc.gov.au/consumerrights.