Netgear Under Fire From ACCC Over Misleading Warranties

The ACCC has found networking equipment manufacturer, Netgear, mislead consumers about their warranty rights under the Australian Consumer Law – notably its range of “modems, routers, WiFi adapters and switches”.

From June 2016, Netgear incorrectly informed consumers they could not obtain remedies for faulty products, unless they purchased a technical support contract, or were covered by Netgear’s manufacturer warranty.

Netgear has also admitted warranty details listed to some products’ packaging is not in compliance with Australian law – e.g. section 102 of the ACL and Competition and Consumer Regulations 2010. The company has now agreed to amend its product packaging.

Following action from the consumer watchdog, Netgear will now “provide remedies and refunds” to consumers who were misled, including:

• review all technical support contracts purchased between 1 July 2016 and the date of the undertaking and, where the Netgear product has had a failure and the consumer would have been entitled to an Australian Consumer Law (ACL) remedy for free, to provide that remedy as well as a full refund of the price of the technical support contract;
• establish an Australian Consumer Rights webpage on its website within one month; and
• establish a Consumer Hotline for Australian consumers who contacted Netgear technical support from 1 July 2016 in relation to a product which may have had an ACL failure that the consumer believes Netgear did not sufficiently address, and to review each complaint to determine whether the consumer is entitled to an ACL remedy and/or compensation.

ACCC Commissioner, Sarah Court, affirms Australian consumers rights cannot be modified, and warranties must reflect such obligations:

“Netgear admits that it is likely to have misled customers about the remedies they were legally entitled to under the Australian Consumer Law”

“If a product fails to meet a consumer guarantee, consumers have the right to ask the supplier for a repair, replacement or refund, and the supplier or manufacturer for compensation”

“Consumer law rights cannot be excluded, restricted or modified. Warranties and technical support contracts operate in addition to consumer guarantees, not instead of these statutory guarantees”.

Following ACCC action, Netgear has also agreed to update its policies, implement an ACL compliance program, plus mystery shopper program.

Further information can be obtained on the ACCC’s website here.