ACCC To Clamp Down On Dodgy Consumer Guarantees
“The ACCC has concerns that consumers may be misled by businesses into thinking that they are required to pay for rights that are automatically provided by the consumer guarantees,” Sims said today speaking at National Consumer Congress in Sydney.
There are large sums of money involved, and this will be a focus for us in 2014, he said.
Complaints about consumer guarantees represent about a quarter of all contacts made to the Australian Competition and Consumer Commission (ACCC).
“Consumer guarantees are your rights to a repair, replacement or refund when you buy something that isn’t right. It should be clear that these guarantees cannot be modified or limited.”
ACCC actions resulted in Hewlett-Packard Australia being fined $3 million for making false representations to customers and retailers about guarantee rights on PC’s, by the Federal Court last year.
“This penalty sends a strong message, particularly to large multi-national companies, that compliance with the Australian Consumer Law is not negotiable,” he warned.
A slew of Harvey Norman franchisees also got hit with major fines last year, after making false claims about return rights and selling extended warranties. Apple, too, was also forced to change its warranties and refund policies, as they effectively excluded consumer guarantees, which was a “great outcome,” Sims said.
“By taking action in cases where we believe there is significant detriment, we make it clear where the boundaries are and what the consequences are for crossing the line.”
Sims also noted a trend where retailers are direct sourcing less expensive products and “fast-moving consumer goods” from overseas, leading to an increase in consumer injuries and returns.
There has been a sharp increase in the number of recalls of these goods, he said, but major retailers appear not to have satisfactory processes to ensure the safety of goods being sold.
“Let me be very clear: if major retailers are discovered to have taken short-cuts in applying basic quality assurance and control measures, at the expense of consumer safety, we will take action in any way we can.”
On the issue of unfair consumer contracts, Sims
said there is more work for the Commission to do in this area, and will be
taking further enforcement action.
ACCC has forced a range of businesses to amend their standard form contracts, removing potentially unfair terms, referring to recent case, where standard clauses found in ByteCard’s contracts, if applied, would cause “detriment” to its customers.
Following the ACCC’s intervention, a range of businesses amended their standard form contracts, removing potentially unfair terms.
Last year, a report on unfair contract terms highlighted the watchdog’s concerns in the telecommunication, hire car, domestic airline, online shopping and fitness sectors.
Identifying and addressing consumer protection issues impacting on Indigenous communities also continues to be a priority for the ACCC, Sims added.
“Our aim is to empower Indigenous consumers in their dealings with business and provide them with an avenue to report suspect behavior. I am pleased to say the digital age is alive and well on Tiwi Island.”