In a recent ACCC Media Release, it was reported that the Federal Court ordered a Harvey Norman franchisee, Bunavit Pty Ltd (Bunavit), to pay a total of $52,000 in penalties for making false or misleading representations regarding consumer guarantee rights, in proceedings brought by the Australian Competition and Consumer Commission (ACCC).
The Court held that sales representatives at the Harvey Norman Superstore Bundall in Queensland, operated by Bunavit, made ten false or misleading representations concerning the existence, exclusion or effect of a guarantee or right, when they made statements to two consumers which represented that Bunavit:
The ACCC Acting Chair Dr Michael Schaper 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. This penalty is a timely reminder to all businesses, whether large or small, that they must not mislead consumers about consumer guarantee rights under the Australian Consumer Law. Businesses 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.”
Under the Australian Consumer Law (ACL) [contained in Sch 2 to the Competition and Consumer Act 2010 (Cth)] when consumers buy products, they come with a guarantee that they will be of acceptable quality.
This means the products will be as free from defects, safe and durable as a reasonable consumer would regard as acceptable:
These rights operate in addition to any express or voluntary warranties offered by businesses and cannot be excluded by a business’ terms and conditions of sale.
In imposing penalties of $52,000 against Bunavit, Dowsett J. took into account that there were more impugned statements than in the other comparable cases, the conduct continued over a longer period, more staff members were involved and Bunavit’s turnover and profit were substantially higher than those of the other offending companies. None of Bunavit’s senior staff were involved.
The Federal Court declined to make declarations as it considered the penalties were sufficient to address the conduct. It also declined to order injunctions, in part because Bunavit has ceased trading.
The ACCC and each of the ten Harvey Norman franchisees agreed on joint submissions and proposed orders to be put to the Court for consideration:
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ACCC v Bunavit Pty Ltd  FCA 6 (12 January 2016)
Harvey Norman franchisee ordered to pay penalties of $52,000 for false or misleading representations about consumer rights –
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