Retailers continue to get refunds wrong: ACCC drags Harvey Norman franchisees into court

Harvey Norman franchisees are embroiled in a legal dispute with the Australian Competition and Consumer Commission over refund and guarantee rights offered by the stores in a case that serves as a warning to the majority of retailers who continue to get refunds wrong.

The consumer watchdog has brought proceedings in the Federal Court in Sydney against 11 Harvey Norman franchisees for allegedly misrepresenting consumer rights.

The Harvey Norman franchisees are Avitalb and Mandurvit, both located in Western Australia, Bunavit, Ipavit and Oxteha, located in Queensland, Camavit and Gordon Superstore both located in New South Wales, HP Superstore and Salecomp, both located in Victoria and Launceston Superstore and Moonah Superstore, both located in Tasmania.

The ACCC claims the franchisees misled consumers about their rights under the Australian Consumer Law by making representations including that they did not have to provide remedies for damaged goods unless notified within a specific period of time such as 24 hours or 14 days and that the franchisees did not have to provide remedies for goods still covered by the manufacturer’s warranty.

The consumer watchdog says the stores also claimed they had no obligation to provide refunds or replacements for particular items such as large appliances or items priced below a certain amount, and claimed that consumers must pay a fee for the repair and return of faulty products.

The case is set down for a directions hearing on December 19 and the ACCC is seeking to include penalties, declarations, injunctions and costs.

ACCC chairman Rod Sims said in a statement that consumer rights under the Australian Consumer Law cannot be excluded, restricted or modified by retailers.

“For example, if an item purchased breaks down within a short time of being purchased, the consumer may be entitled to a refund or a replacement item.”

“Consumer guarantees has been identified as a national priority by ACL regulators and is a matter of particular concern for the ACCC, with more than 16,000 contacts from members of the public to the ACCC’s Infocentre so far this year.”

The watchdog is conducting a “number of investigations” into other manufacturers and retailers for breaches of consumer guarantee rights and the case against the Harvey Norman franchisees follows the ACCC’s prosecution last month of Hewlett-Packard Australia on similar grounds.

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