The Federal Court has found four Harvey Norman franchisees guilty of lying to consumers about their rights. The stores were fined a total of $116,000 for making false or misleading representations to customers — including the claim that they were under no obligation to provide an exchange or refund for faulty goods supplied.
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Following a court order enacted by the Australian Competition & Consumer Commission (ACCC), the Federal Court has ordered four Harvey Norman franchisees to pay a total of $116,000 in civil pecuniary penalties for making false or misleading representations to customers regarding consumer guarantee rights.
Launceston Superstore Pty Ltd (since closed), Moonah Superstore Pty Ltd, located in Moonah, Tasmania, HP Superstore Pty Ltd, located in Hoppers Crossing, Victoria and Salecomp Pty Ltd, located in Sale, Victoria were found guilty of making numerous false or misleading representations to consumers about their consumer guarantee rights.
The Launceston store was fined $32,000 while the other three franchisees were each fined $28,000. In addition to penalties, the franchisees are also required to display in-store corrective notices and implement a consumer law compliance program.
Some of the false representations made by store representatives included:
- that the franchisee had no obligation to provide remedies for damaged goods unless notified within a short specified period, such as 14 days
- that the franchisee had no obligation to provide an exchange or refund for faulty goods supplied
- that the franchisee had no obligation to provide a remedy independently of the relevant product manufacturer
Launceston Superstore Pty Ltd, which copped the biggest fine, also stated on receipts that customers could not claim a refund on damaged goods unless notified within 24 hours of delivery or pick-up.
In his judgment, Justice Middleton reiterated that if goods were not of acceptable quality when sold, consumers can obtain a remedy.
“These penalties send a strong message to all businesses, including franchisees, that they must not mislead consumers about their rights to repair, replacement or refund for faulty goods under the Australian Consumer Law,” ACCC Chairman Rod Sims said in a statement.
“The ACCC has moved from raising awareness of the law to taking enforcement action where it believes consumers have been misled about their rights under the consumer guarantee provisions of the ACL.”
The ACCC is awaiting judgment in proceedings against another six Harvey Norman franchisees for similar conduct.
You can read an overview of Australia’s consumer protection laws here.
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