ACCC commences proceedings against Harvey Norman franchisees for allegedly misrepresenting consumer

ACCC commences proceedings against Harvey Norman franchisees for allegedly misrepresenting consumer

ACCC commences proceedings against Harvey Norman franchisees for allegedly misrepresenting consumer

The Australian Competition and Consumer Commission (ACCC) has recently commenced proceedings against 11 Harvey Norman franchisees for allegedly misrepresenting consumer rights under the Australian Consumer Law.

Consumer guarantees under the Australian Consumer Law

The Australian Consumer Law (ACL) sets out certain guarantees in connection with the supply of goods and services in Australia which have been sold for less than $40,000 or are otherwise ordinarily acquired for private, domestic or household use or consumption. If the goods or services fall short of those guarantees, consumers are entitled to certain remedies which cannot be excluded, restricted or modified by businesses supplying those goods and services. For example, if a consumer purchases a toaster and it stops working shortly after the date of purchase, the consumer may be entitled to a refund of the purchase price or a replacement toaster.

Proceedings against Harvey Norman franchisees

The ACCC commenced proceedings against the Harvey Norman franchisees in the Federal Court of Australia, alleging they misled consumers about their rights under the ACL by representing that:

  • they did not have to provide remedies for damaged goods unless they were notified by the consumer within a specified period of time (eg, 24 hours or 14 days);
  • they did not have to provide remedies for goods still covered by the manufacturer’s warranty;
  • they did not have to refund or replace particular items such as large appliances or items below a certain price; and
  • consumers must pay a fee for the return and repair of faulty products.

ACCC’s warfare on industry

The proceeding against the Harvey Norman franchisees have been filed in the context of the ACCC’s national consumer awareness campaign to educate consumers and industry about consumers’ rights under the ACL. As part of that campaign, the ACCC has targeted some other large manufacturers and retailers, including Hewlett-Packard Australia Pty Ltd, for statements which were alleged to have falsely and misleadingly represented that consumers were not entitled to remedies under the ACL. The ACCC, in conjunction with the International Consumer Protection Enforcement Network, also recently conducted a one day sweep (part of an annual event by ICPEN) of business websites in Australia targeting businesses which use fine print in website terms and conditions to seek to avoid obligations to consumers.

The ACCC is also cracking down on false and misleading conduct by industry more generally, most recently having obtained court enforceable undertakings from Nissan Motor Co (Australia) Pty Ltd in relation to its Nissan DUALIS “paintball” advertisements (which depicted a base model Nissan DUALIS and more superior model which included optional extras, but only advertised the “drive away” price for the base model vehicle), which Nissan acknowledged were likely to mislead consumers.