Harvey Norman franchisee cops $52,000 fine for consumer law breach

Retailers are being reminded of their obligations under Australian Consumer Law, with another Harvey Norman franchisee ordered to pay a total of $52,000 for making false or misleading representations about consumer guarantee rights.

The action was taken by the ACCC, which says it has now obtained penalty orders totalling $286,000 against 10 Harvey Norman franchisees for false or misleading representations regarding consumer guarantees.

In the Bunavit case, the Federal Court held that sales reps at the Harvey Norman Superstore Bundall in Queensland made 10 false or misleading representations concerning the existence, exclusion or effect of a guarantee or right.

The company claimed it had no obligation to provide a remedy and that the customer would need to pursue the manufacturer's warranty directly with the manufacturer, and that the company could not assist further unless the consumer paid for some or all of the cost of the repair.

Michael Schaper, ACCC acting chair, says the penalty is a timely reminder to all businesses, large and small, that they can't mislead consumers about their rights under the Australian Consumer Law.

"Products sold in Australia come with a consumer guarantee under the Australian Consumer Law that they will be of acceptable quality," Schaper says.

"Faulty products must be repaired, replaced or a refund must be provided by the retailer," he adds.

Schaper says businesses are also expected to take appropriate and effective steps to ensure staff understand the rights of consumers and business obligations.

No senior staff were involved in the Bunavit case.

Bunavit has since ceased trading.