The Australian Federal Court has fined four Harvey Norman stores $100,000 after they were found guilty of cheating consumers, one woman was told that warranties did not apply to large appliances while another was told that she had to pay freight and handling fees on a faulty product.
This is not the first time that the mass retailer’s franchisees have been caught out by the Australian Competition and Consumer Commission, last year nine other Harvey Norman stores were found guilty of misleading customers about their warranty and consumer rights, they were fined another $234,000.
Harvey Norman were also caught up in the recent Federal Court case resulting in key notebook, printer and PC partner Hewlett Packard being fined $3M dollars by the same Court.
The ACCC investigations which took place over past three years found that the franchisees which included the Harvey Norman Super Store at Gordon told consumers that:
The franchisee had no obligation to provide a remedy while the relevant product was still covered by the manufacturer’s warranty;
The franchisee had no obligation to provide consumers with a choice of remedy if the relevant product was supplied more than three months ago; and
The consumer would have to pay a postage and handling fee before the relevant product could be returned from the manufacturer.
The misrepresentations were made orally by sales representatives or store managers in each store.
The four franchisees this time round are:
Oxteha Pty Ltd, located in Oxley, Queensland fined ($26,000);
Gordon Superstore Pty Ltd located in Gordon, New South Wales fined ($25,000);
Mandurvit Pty Ltd located in Mandurah, Western Australia fined ($25,000); and
Avitalb Pty Ltd located in Albany, Western Australia fined ($10,000).
In December 2013, the federal court ordered the operator of the Campbelltown Harvey Norman store to pay $32,000 for making false claims about consumer rights.
Late in 2013 stores in Launceston and Moonah, Tasmania; and Hoppers Crossing and Sale, in Victoria, were penalised $116,000.
The Australian Competition and Consumer Commission claimed in court that sales staff told the customer she was not “entitled to a refund” after she expressed concern over the quality of a refrigerator in May 2012. When she referred to the store’s refund policy, she was told it “did not apply to large appliances”.
On top of the fine, the Gordon franchisee has been ordered to display signs with corrections inside the store and to implement a consumer law compliance program.
The ACCC said one of the franchisees told customers it was not bound to provide a choice of remedy if a product was supplied more than three months ago.
“These judgments imposing penalties are a clear message to all suppliers, no matter how big or small, that they must not mislead consumers about their rights under the Australian Consumer Law,” said the ACCC’s deputy chairman, Michael Schaper.
The ACCC is urging consumers to understand and exercise their rights for goods purchased after 1 January 2011.
These rights include the guarantee that products will be of acceptable quality, will be fit for any disclosed purpose, and will match any description under which it is sold.
“Where a good develops a major fault, consumers have a right to a replacement or refund from the supplier of the good. For goods that develop a minor fault, a consumer has a right to have the good remedied, at the supplier’s discretion, within a reasonable time,” a spokesman said.
“If the supplier doesn’t do so, the consumer can either reject the goods and get a refund or have the problem fixed and recover reasonable costs of doing so from the supplier.”
