ACCC Announces Netgear To Provide Remedies for Misleading Conduct Regarding Warranties

Friday 2 March 2018 @ 11.09 a.m. | Legal Research | Trade & Commerce

The Australian Competition and Consumer Commission (the ACCC) has, in a recent ACCC Media Release, announced that networking equipment manufacturer Netgear will provide remedies and refunds to customers who may have been misled by its warranty and technical support representations.

Background to the Action

According to the media release, from June 2016, Netgear incorrectly told customers they could not receive a remedy for a faulty product, unless they were covered by Netgear’s manufacturer’s warranty or they purchased a technical support contract.  However, the Australian Consumer Law (the ACL) [contained in Sch 2 to the Competition and Consumer Act 2010 (Cth)] offers a number of statutory rights and remedies under consumer law for faulty products, without requiring the purchase of extra warranties or contracts.

Netgear has also acknowledged that some products with warranty representations on the packaging did not include the prescribed wording required by s 102 of the ACL and the Competition and Consumer Regulations 2010 (Cth) with the company also undertaking to correct its packaging to comply with the law.

Comment from the ACCC Commissioner

ACCC Commissioner Sarah Court said in a recent ACCC Media Release:

“Netgear admits that it is likely to have misled customers about the remedies they were legally entitled to under the Australian Consumer Law. If a product fails to meet a consumer guarantee, consumers have the right to ask the supplier for a repair, replacement or refund, and the supplier or manufacturer for compensation. Consumer law rights cannot be excluded, restricted or modified. Warranties and technical support contracts operate in addition to consumer guarantees, not instead of these statutory guarantees.”

Additionally, Netgear has also undertaken to update its policies and procedures to ensure clear consideration of Australian consumer rights under the statutory consumer guarantees regime.

The Netgear Undertaking

The court-enforceable undertaking of 26 February 2018 (which was accepted by the ACCC), requires Netgear to:

  • review all technical support contracts purchased between 1 July 2016 and the date of the undertaking and, where the Netgear product has had a failure and the consumer would have been entitled to an Australian Consumer Law remedy for free, to provide that remedy as well as a full refund of the price of the technical support contract;
  • establish an Australian Consumer Rights webpage on its website within one month; and
  • establish a Consumer Hotline for Australian consumers who contacted Netgear technical support from 1 July 2016 in relation to a product which may have had an ACL failure that the consumer believes Netgear did not sufficiently address, and to review each complaint to determine whether the consumer is entitled to an ACL remedy and/or compensation.

Previous ACCC Action against Tech Companies

The action against Netgear comes after an ACCC investigation which found that Belkin had supplied some products with lifetime warranties, only to offer a warranty lasting five years. Belkin has since agreed to honour lifetime warranties for products affected.

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Sources:

Netgear undertaking - ACCC

Belkin undertaking - ACCC

Netgear to refund Aussie customers over warranty wrangle – arnnet.com.au

Netgear likely misled customers – ACCC Release MR 19/18

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