An online electronics retailer has been ordered to pay fines totalling $100,000 by the Federal Court for wrongly telling consumers they didn’t have the rights to refunds, repairs, or replacements for goods in various circumstances.
The fine comes just months after appliance giant Fisher & Paykel was hit with a $200,000 fine by the consumer watchdog for misleading customers into believing they needed to buy extended warranties for its products when they did not.
The most recent case was brought by the Australian Competition and Consumer Commission against a company called Electronic Bazaar, which sold camcorders, digital cameras, mobile phones, laptops, projectors and other electronic goods online.
The court found Electronic Bazaar had told consumers they were not entitled to a refund, repair, or replacement for goods that are no longer under an express warranty, where goods are not in their original packaging, or unless a claim was made within a specified time period. This was in contravention of its obligations under Australian Consumer Law (ACL).
Along with the $100,000 fine, Electronic Bazaar’s sole proprietor Dhruv Chopra was barred from engaging in similar conduct for a period of five years, ordered to undertake training on his obligations under the ACL and pay the ACCC’s legal costs.
Following the decision, the website for Electronic Bazaar has closed and been replaced with a message reading: “This website is no longer operational. Please contact us on [email protected] for any assistance.”
However, the website previously advertised a one-year standard warranty, with the terms and conditions page noting extended warranties were available on selected products.
“Each product sold on the website is covered by a 12 months standard warranty. Extended warranties are available for purchase for some products, as listed on the website,” the terms and conditions page said.
In a statement, ACCC chairman Rod Sims said on four separate occasions between June 2012 and July 2014, Chopra allegedly also accepted payment for goods but failed to supply those goods to consumers within a specified, or reasonable, timeframe.
“The court’s decision to impose a significant penalty on Mr Chopra, a sole trader, for misrepresenting consumers’ refund and warranty rights makes it clear that this conduct is a serious breach of the Australian Consumer Law,” Sims said.
“A consumer’s right to a refund, repair, or replacement in certain circumstances under the ACL consumer guarantees cannot be excluded or modified by terms or conditions published on a website.”
Denise Boyd, director of policy and campaigns at the Consumer Action Law Centre, told SmartCompany the case is a reminder that small business owners need to be aware of their obligations under the ACL.
“No matter whether your business is small or large, if you’re in business you need to know what this law says, regardless of whether you’re selling goods or services,” Boyd says.
“The ACL overrides a company’s individual refunds policy.”
Boyd says customers can complain about a business’ conduct to state Consumer Affairs Departments or Office of Fair Trading if the item they have purchased doesn’t do what it said it should, if it’s faulty, not durable, or if it has an unacceptable appearance that’s radically different to what was advertised.
“That last one is especially important for online retailers,” she says.
“And it doesn’t matter if [a customer has] worn the item, used it, taken it out of the wrapper or cut the tags off.”
For business owners unsure of their obligations under ACL, Boyd recommends the segment from the ABC program The Checkout as being a very simple explanation of what the law covers.
SmartCompany contacted Electronic Bazaar but did not receive a response prior to publication.