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Technology retailer under fire for ‘misleading’ Returns Policy

December 11, 2016

by Ben Desir, NRA Legal Workplace Advisor

The Australian Competition and Consumer Commission (ACCC) has instituted proceedings for misleading and deceptive conduct against a technology retailer.

The ACCC has accused several entities operating under the MSY Technology banner of misrepresenting consumers’ rights to remedies for faulty products, by claiming that:

  • MSY Technology had discretion to choose if a customer was entitled to a remedy for a faulty product.
  • MSY Technology could choose which remedy to provide to a customer.
  • Customers would only be entitled to a remedy if the product was returned within seven days.
  • Where a faulty product was out of warranty, MSY Technology could charge the customer an administration fee for a remedy.
  • MSY Technology would not provide remedies for faulty software products.

Ms Sarah Court, ACCC Commissioner, said it had been alleged that the retailer had “breached the Australian Consumer Law by misrepresenting consumers’ rights to a repair, replacement or a refund when they have purchase faulty products.”

“Businesses must not mislead consumers about their consumer guarantees rights. Consumers who have purchased a faulty product have a right under the consumer guarantees to remedies which businesses cannot restrict, alter or remove.”

In a previous action instituted by the ACCC against several MSY Technology entities, the retailer had been penalised $203,500 for false and misleading consumer warranty representations.

While a retailer is not required to provide a refund or replacement for a product if a customer simply changes their mind, they must allow a refund or replacement where there is a major problem with that product.

A major problem is where the product:

  • Has a problem that, if someone had known about it, they would not have bought the item.
  • Is unsafe.
  • Is significantly different from the sample or description.
  • Does not do what the retailer said it would, or what the customer asked for, and this cannot be fixed easily.

If the issue with a product is not a major problem, the retailer may offer to repair the product. The customer must accept a free repair of a minor problem. If a retailer fails to provide a free repair within a reasonable time or cannot fix the issue, the customer may:

  • Have the product repaired elsewhere and pass the cost onto the retailer.
  • Ask for a replacement.
  • Ask for a refund.
  • Recover compensation for any drop in value from the price paid.

The Australian Consumer Law is a challenging area for retailers. It is vitally important to understand when you, as a retailer, must offer a repair, refund or replacement to avoid running afoul of the ACCC.


Unsure of your obligations under the Australian Consumer Law? Contact NRA Legal at law@nra.net.au or call 1800 RETAIL (1800 738 245) to talk with one of our workplace advisors.

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