Home > Latest News > JB HI FI Share Climb After ‘Extended Warranty’ Class Action Rolled Out

JB HI FI Share Climb After ‘Extended Warranty’ Class Action Rolled Out

The share market has shrugged off a pending Maurice Blackburn class action lawsuit against retailer JB Hi Fi over the sale of extended warranties with their share value climbing today to $49.32.

During the past month their stock has risen over 6% and last month traffic to their web site climbed to over 33M with investors appearing to take view that any ‘Etended Warranty’ claims will have little if any impact on the business.

Maurice Blackburn Lawyers who are well known for spruiking the market in the hope of generating a class action case, has  claim that JB Hi Fi “Ripped Off” customers who purchased an extended warranty.

Their latest legal action follows an earlier campaign by consumer group Choice against Harvey Norman, The Good Guys and JB Hi Fi, over extended warranties, with the consumer organisation who once claimed that a Samsung washing machine had been the cause of a house fire despite the NSW fire brigade denying the claim now pushing for a review of extended warranties.

Lawyers for Maurice Blackburn who ChannelNews understands has been approaching people identified by Choice as having purchased an extended warranty package from retailers, have lodged their class action claim in Victoria’s Supreme Court.

The legal action that extends back to 2011 transactions relate to warranties that they claim were “of little to no value”, as customers already had the same rights for free under Australian Consumer Law.

JB Hi Fi’s policy is that when a person has a problem with a product, they are refund with the retsailer sending the product back to the supplier.

In an effort to drum up support for the case Maurice Blackburn are currently pitching former purchasers of an extended warranty to come forward if they purchased an extended warranty between January 1, 2011, and December 8, 2023.

What’s not known is how much a consumer would get back out of an extended warranty class action claim because of the low value of a warranty package.

Then there is the issue of whether the time taken to attend meetings with lawyers, make statements and then attend a court case that could go on for days is going to be worthwhile to an individual.

The extended care plans, or extra care plans as they are often called are often sold to customers who are looking for more than a normal manufacturer’s warranty.

Miranda Nagy, a principal lawyer at Maurice Blackburn claims in a statement issued earlier today that JB Hi-Fi used “misleading or deceptive conduct” or “unconscionable conduct” in selling the extended warranties by telling customers either directly or by implying that the warranties “operated for longer than the rights” under consumer law, provided benefits that consumer law did not or were “of value” to customers.

“Our case alleges they added nothing meaningful to the strong rights for repair, replacement or refund under the Australian Consumer Law rights that consumers already enjoy.”

It’s further alleged JB Hi-Fi also failed to give customers important information about their rights under the consumer law “which they needed to make a properly informed decision” about buying an extended warranty.

Choice has been going on about extended warranties for more than a decade, in 2013 Choice have been described as more left wing political than a consumer organisation, were claiming that retailers who operate under the Australian Consumer Law (ACL), must offer to replace, repair or refund your money in the case of a major fault with a product.

Retailers are obligated to do this for a reasonable amount of time following a purchase, depending on the value of the product, they claimed.

According to ChannelNews investigations this is exactly what most retailers have been doing, to the extent that recently several major brands including LG Electronics, complained about the high cost of returns from retailers who refunded a product and then pushed the obligation to the supplier.

What’s not clear in this case, is whether any consumers that Maurice Blackburn is referring to actually did not get a product fixed after buying an extended warranty and then claiming.

What’s also not known is the extent of the fraudulent abuse of claims against retailers and brands, with consumers buying a product such as a TV using it for a period of time especially when big sporting events are on and then returning it to a retailer at a later date for a refund claiming it is faulty.

Both Samsung and LG have told Channel News in the past that up to 73% of goods returned at “not faulty”.

Choice claims that retailers are not allowed to say you only have extended rights if you bought an extended warranty, nor are they allowed to tell you to take it up with the manufacturer – their obligations to customers are enshrined in consumer law above and beyond anything else, they claim.

Earlier this year, consumer advocate Choice found seven out of 10 Australians believed extended warranties gave them extra protections beyond what was already guaranteed under Australian Consumer Law.

Thirty-five per cent of people surveyed said they purchased an extended warranty because a salesperson suggested it.

There has also been no mention by Choice of the fact that consumers have an obligation to check the small print and the conditions associated with an extended warranty beyond what is law in Australia.

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