Legal Actions Start To Flow Over Xbox 360 Debacle

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Almost a week after Microsoft Corporation set aside $1.3 billion dollars to extend the warranty of the Xbox 360, Microsoft Australia is staying mum on the issue. Now a Melbourne based legal firm is looking at mounting a class action similar to one under way in the USA.

Almost a week after Microsoft Corporation set aside $1.3 billion dollars to extend the warranty of the Xbox 360 Microsoft Australia is staying mum on the issue. Now a Melbourne based legal firm is looking at mounting a class action similar to one under way in the USA.

No announcements have been by Microsoft Australia as to how Australian consumers will be treated or how retailers should handle customers. This is the same management team that only weeks ago via their PR Company told SmartHouse that there were no problems and that returns of Xbox 360 consoles due to a “Red Ring Of Death” problem were within an industry accepted return rate of 2%.

Instead it took SmartHouse to reveal that the return rates were over 30% in Australia.

 

Now consumers are lining up to take legal action against Microsoft. In the USA, a Florida man has filed a $5 million federal class-action lawsuit against Microsoft claiming the software maker is responsible for a defect in the Xbox 360 that scratches game discs and makes them unusable.

In Australia, a Melbourne based Xbox 360 owner who wrote to SmartHouse complaining of his treatment at the hands of Microsoft Australia has told Smarthouse that he has been approached by a large Melbourne based legal practice who are investigating the possibility of mounting a class action in Australia.

In the USA Jorge Brouwer of Broward County filed his claim in the U.S. District Court in Fort Lauderdale, Florida The suit was first reported on the gaming site Joystiq.

The suit claims that the Xbox 360 was “negligently designed and manufactured” in that the videogame console’s laser disc reading assembly contacts and scratches discs. “The scratches to the game discs render them unreadable or otherwise inoperable,” the suit says. Brouwer claimed the Xbox 360 he bought in November 2006 destroyed the “Gears of War” and “Madden NFL ’07” videogame discs he bought for $50 each.

Microsoft was not immediately available for comment.

 

The lawsuit was filed less than a week after Microsoft said it would set aside more than $1 billion to extend the warranty protection on the Xbox 360 to cover what the company called an “unacceptable” number of repairs to the consoles. The main problem was a defect that caused a general hardware failure. Microsoft said it would take a financial charge against pre-tax earnings of as much as $1.15 billion in the quarter ending June 30 cover the cost of the extended warranty protection.

In his lawsuit, Brouwer claimed to have received thousands of complaints from U.S. Xbox users who have had game discs damaged. Microsoft has replaced some damaged disks at $20 each, provided the games were made by Microsoft, the suit said. “However, defendant has not replaced all of its titles that have been scratched and refused to replace or provide any compensation for any scratched game discs made by third-parties.”

The suit alleges that the problem is not limited to the United States. A Dutch TV program, Kassa, received numerous complaints in February of disc-damaging Xbox consoles from customers in that country, the suit noted. Kassa investigated and later ran its own tests, which found that some Xbox 360s scratched game discs after five hours of playing.

Microsoft Netherlands, according to the suit, acknowledged that disc scratching was possible in some machines, and the company “would seek a solution for the Dutch customers with this problem.”

 

The complaint also lists Microsoft’s extended warranty plan as further proof of the Xbox’s defective hardware. “At all times material to this complaint, the defendant had full knowledge that there are other numerous design defects with its Xbox 360 system and console, including the defective laser disc reading assembly,” the complaint said.

In seeking damages, the suit alleges that Microsoft has breached its warranty to customers and is liable for damages caused by the consoles. The suit asks the court to order Microsoft to pay actual and consequential damages, including replacing damaged discs and repairing defective consoles.

In December, the family of an Illinois infant who died in a house fire sued Microsoft, claiming the blaze was started by an Xbox that overheated.

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