BREAKING NEWS:HP OZ Hit With $3M Fine For Misleading Consumers

Written by David Richards     05/07/2013 | 15:48 | Category: INDUSTRY

UPDATED:Hewlett Packard Australia has been hit with a massive $3M fine for misleading consumers about their consumer rights, it is not known how many faulty HP products were involved in the claim.

BREAKING NEWS:HP OZ Hit With $3M Fine For Misleading Consumers
The Federal Court has also ordered HP to advertise how consumers affected can redress their claims against HP. HP has also been ordered to pay ACCC legal costs of $200,000.

The Federal Court has today ordered Hewlett-Packard Australia (HP) to pay a $3 million penalty fine after a lengthy investigation by the Australian Competition and Consumer Commission into claims that HP made to consumers about their guarantee rights.

Rather than face an ongoing Court battle and disclosure of information HP Australia negotiated a settlement with the ACCC. 

At this stage HP Australia who conduct selective PR programs has chosen not to comment. 

The Australian Competition and Consumer Commission instituted proceedings against HP on 16 October 2012. Subsequently, the ACCC and HP came to an agreed settlement on the matter a statement issued by the ACCC said.

The Court found, based on the parties' agreed facts, that HP made a number of false or misleading representations to consumers about their consumer guarantee rights, including that:

the remedies available to consumers were limited to the remedies available at HP's discretion;
consumers were required to have their product repaired multiple times before they were entitled to a replacement;
the warranty period for HP products was limited to a specified express warranty period;
consumers were required to pay for remedies outside the express warranty period; and
products purchased online could only be returned to HP at HP's sole discretion.
In addition, the Court found that HP represented to retailers that it was not liable to indemnify the retailer if the retailer failed to obtain authorisation from HP before giving a consumer a refund or replacement.

The above representations were made by HP staff  to Australian consumers working at call centres located around the world, as set out in HP's internal guidelines and scripts.

In his judgment, Justice Buchannan stated that the penalty was appropriate and "reflects an acknowledgment of the seriousness of the respondent's conduct". 

Justice Buchannan noted the Court's disapproval of HP's conduct and the need for general and specific deterrence for such behaviour.

"This was an important case to the ACCC. The misconduct was widespread and systemic from a very large multi-national firm," ACCC Chairman Rod Sims said.

"The ACCC believes that this penalty sends a strong message to all companies, particularly large multi-national companies, that the Australian Consumer Law is not negotiable. This result also shows that the Court is not afraid to impose significant penalties for serious contraventions of the ACL."

"All businesses operating in Australia require robust mechanisms to comply with the consumer guarantees provisions under the Australian Consumer Law," Mr Sims said.

In addition to the $3 million penalty, the Court also made orders including:

a contribution towards the ACCC's costs of $200,000;
consumer redress orders;
public disclosure orders;
corrective advertising orders; and
orders to implement a compliance program.

The Court's orders include a requirement that HP set up a consumer redress process for affected consumers.

Late Friday evening Hewlett Packard Australia issued the following statement

:"Individual, corporate and government customer satisfaction is the cornerstone of HP's business.  We deeply regret that in the instances identified by the ACCC, HP fell short of our core commitment to high standards of service for Australian consumers who purchased our HP-branded desktop computers, notebooks/laptops and printers and of our duties under Australian consumer laws.

Through discussions with the ACCC with a view to resolving the legal proceedings brought against HP, HP has voluntarily consented to Federal Court orders.  Under the orders, we have committed to, among other things, review our warranty and support practices against the Australian Consumer Law and implement a robust program to monitor and achieve ongoing compliance.

HP is dedicated to honouring our obligations to Australian consumers under the Australian Consumer Law.  We will provide customer support to assist consumers in resolving concerns with HP products in accordance with the Australian Consumer Law and have established a specific consumer redress program (involving a customer contact centre) to help with past concerns relating to HP-branded desktop computers, notebooks/laptops and printers.

We have also taken steps to adjust our consumer policies and practices and re-train our Printing and Personal Systems team members.  HP will continue to design products distinguished for their outstanding quality, reliability and ease of use and looks forward to delivering high-quality service to our Australian customers.

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