Misleading consumers costs Harvey Norman $52,000

A Harvey Norman franchisee has been fined AUD$52,000 for making false or misleading representations about consumer guarantee rights.

Bunavit Pty Ltd, which operates the Harvey Norman Superstore Bundall in Queensland, is the latest of ten Harvey Norman franchisees around the country to be penalised by the Federal Court for breaching consumer protection laws.

The Australian Competition and Consumer Commission (ACCC) brought the action against Bunavit for ten false or misleading statements made by store employees to customers about their statutory rights.

One salesperson told a customer whose new computer was malfunctioning, “There’s nothing we can do.” Another customer who had complained about receiving a faulty laptop was informed, “We can’t help you.”

A store employee told her to contact the laptop manufacturer for help instead and that retailer would not pay for a refund or a replacement. The same employee later advised her that they would pay half of the repair costs if she sent it to a third party computer shop.

ACCC Acting Chair Dr Michael Shaper said, “Products sold in Australia come with a consumer guarantee under the Australian Consumer Law that they will be of acceptable quality. Faulty products must be repaired, replaced or a refund must be provided by the retailer.”

Consumer guarantees cannot be limited by the manufacturer’s warranty and any replacement or repair must be provided at no cost to the consumer.

“Business 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,” Dr Shaper said.

The total amount of penalties levied against Harvey Norman franchisees for false and misleading representations about consumer rights to $286,000.

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Sources: ACCC, TimeBase, Sydney Morning Herald 

Consumer advocates investigate spate of “Was/Now” retail claims

retail sales
NSW Fair Trading has issued substantiation notices to nearly half of the 78 traders they investigated, requiring them to back up claims that around 230 items labelled with “was/now” were made in good faith.

Consumer advocacy group Choice believes it’s a common enough phenomenon: retailers advertise the supposedly real savings that customers will gain when purchasing on-sale products. But recent complaints indicate that retailers may not always be telling the truth about the discounts they allege.

NSW Fair Trading Minister Matthew Mason-Cox said one retailer deceptively claimed a Canon inkjet printer “was $59, now $39”. However, due to a late delivery the printer was never sold at its original asking $59 price, rendering the retailer’s claim false.

“Traders were identified based on complaints data, as well as a co-ordinated internet scan to identify promotions on websites targeting Australian consumers,” the minister told the Sydney Morning Herald.

In NSW alone, fair trading officers launched investigations into 30 businesses, assessed over 150 discounted items and handed out over a dozen substantiation notices.

Currently, six traders were able to validate their was/now assertions, another six were still under investigation and one trader was sent an “education” letter to remind them of their obligations under the law.

Making false was/now claims can attract serious penalties under consumer law of up to $1.1 million.

In 2013, the Federal Court found jewellery maker Zamel guilty of misleading its customers with was/now price claims.

The retailer falsely advertised several items it sold “was $279, now $149” despite the fact they were never actually sold at its original advertised price. Zamel was fined $250,000.

With the Christmas season soon approaching, retailers are encouraged to comply with consumer protection laws or face similar sanctions.

The temptation of making a quick sale isn’t worth a knock on the door from consumer watchdogs.

Implement our Competition and Consumer Protection course today.

Source: Sydney Morning Herald