18 Oct 2012

ACCC / Hewlett-Packard dispute over consumer warranty rights a reminder to check ACL compliance

The ACCC has launched proceedings against Hewlett-Packard Australia Pty Ltd for contraventions of the Australian Consumer Law (ACL) for allegedly misrepresenting consumer guarantees and warranties. This latest legal action is a timely reminder to retailers and manufacturers to ensure that they are meeting their obligations under the ACL to explain consumer guarantees and warranties properly.

The ACCC's current major priorities include the new consumer product rights under the ACL and there is a particular current focus on consumer guarantee rights for electronics and other popular consumer goods. Since the ACL began in 2011, there has been a strong push by the ACCC to educate consumers and business about their rights under the ACL; earlier this year, it launched its national campaign "If it's not right, use your rights. Repair, replace, refund".

Businesses need to be vigilant and review their product warranty literature because it is likely that any consumer complaints about allegedly misleading or deceptive conduct by retailers or manufacturers will be taken seriously by the ACCC and investigated.

According to the ACCC, Hewlett-Packard made false or misleading representations in two different areas:

  • to consumers about their statutory warranty and consumer guarantee rights; and
  • to retailers and resellers, that Hewlett-Packard was not liable to indemnify them if the reseller provided consumers with a refund or replacement without Hewlett-Packard's prior authorisation.

Under the ACL, suppliers and manufacturers are liable for mandatory statutory consumer guarantees which are separate to and independent of the manufacturer's own express warranty.

The suggestion in the Hewlett-Packard case is that consumers were told that their remedies for a faulty HP product were limited to the HP express warranty (in terms of time period and obligation to have the product repaired, even if it had a major failure). However statutory consumer guarantees, such as that products are of acceptable quality, are not affected by any extra warranty that a business chooses to offer. It is critically important that businesses do not mislead consumers about their rights.

If a business does choose to provide additional voluntary warranties about their goods, there are also new specific requirements for packaging on the goods to make clear these consumer rights exist.

In the Hewlett-Packard case, the ACCC is seeking a wide range of remedies, including civil pecuniary penalties, adverse publicity orders, and non-party redress for consumers affected by Hewlett-Packard's conduct.

Given the ACCC's focus on consumer law issues, and without commenting on the likely outcome of this case, the Hewlett-Packard case is a timely reminder for all retailers and manufacturers to check compliance with their obligations under the Australian Consumer Law.

The Clayton Utz Competition and Consumer Team has helped many clients with these issues and if you would like to discuss your business's compliance, please call one of us on the details below.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.