Harvey Norman franchisee to pay $52,000 in penalties

Bunavit gets penalties for false or misleading representations about consumer rights

Harvey Norman franchisee to pay penalties of $52,000

Harvey Norman franchisee to pay penalties of $52,000

Harvey Norman franchisee, Bunavit, has been slapped with $52,000 in penalties by the Federal Court for making false or misleading representations regarding consumer guarantee rights, in proceedings brought by the Australian Competition and Consumer Commission (ACCC).

The announcement follows proceedings that were commenced by the ACCC against Gordon Superstore on November 20, 2012 and nine other Harvey Norman franchisees (including Bunavit) on June 13, 2013. Subsequently, 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.

The court held that sales representatives at the Harvey Norman Superstore operated by Bunavit in Bundall, Queensland made ten false or misleading representations concerning the existence, exclusion or effect of a guarantee or right.

They made statements to two consumers which represented that Bunavit had no obligation to provide a remedy and the consumer would need to pursue the manufacturer’s warranty directly with the manufacturer and could not assist further unless the consumer paid for some or all of the cost of the repair.

Under the Australian Consumer Law when consumers buy products, they come with a guarantee that they will be of acceptable quality; the guarantee of acceptable quality is in addition to any manufacturer’s warranty; the guarantee of acceptable quality is not limited to the period of the manufacturer’s warranty; and if the product is not of acceptable quality, consumers are entitled to remedies, such as a refund, replacement or repair, at no cost to the consumer.

The ACCC said it has obtained penalty orders totalling $286,000 against ten Harvey Norman franchisees in respect of false or misleading representations regarding consumer guarantees.

In imposing penalties of $52,000 against Bunavit, ACCC said Justice Dowsett 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.

However, unlike some of the other cases, none of Bunavit’s senior staff were involved.

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,” Schaper said.

ACCC also said the Federal Court declined to make declarations as it considered the penalties were sufficient to address the conduct, in addition to declining to order injunctions because Bunavit has ceased trading

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