Large Retailers subject to penalties following investigations with the ACCC

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Two large and well known retail corporations, Fitbit (Australia) Pty Limited (‘Fitbit’) and Apple Inc (Apple US), have recently been penalised for false and misleading representations conducted by the Australian Competition and Consumer Commission (ACCC) following extensive investigations.

 

In early June, the ACCC accepted a court enforceable undertaking from Fitbit in response to over one hundred consumer complaints made in relation to warranties for faulty products. During the period of November 2016 to March 2017, Fitbit misinformed consumers that the warranty they offered for faulty products was only available for a single year. Further, they represented that consumers could only get a replacement for faulty goods for 30 days from purchase or the remainder of the calendar year, depending on which was a longer period.

 

Apple US has also received a $9 million penalty for their false and misleading representations of the rights consumers are entitled to for their faulty products. Apple US and Apple Pty Ltd (Apple Australia) misrepresented to 275 consumers that they were not eligible for a remedy on a software error (“error 53”) if their iPad or iPhones had been repaired by a third party. The Court confirmed that repairs by third parties did not extinguish consumers right to a remedy or deny them their consumer guarantees.

 

These matters demonstrate that businesses must make it clear that the warranties offered with their products are added to the remedies available under the legislation, instead of entirely replacing legislated warranties.

 

What are our automatic rights as Consumers?

It is important to understand what your rights are as a consumer as these matters demonstrate how easily consumers can be misled in relation to consumer guarantee obligations, particularly when consumers experience faults in products. Legislation currently establishes a legal obligation for businesses to provide guarantees for consumers, in relation to:

  • Products and services hired, sold or leased under $40,000.00.

  • Products and services hired, sold or leased over $40,000.00 generally bought for household, domestic or personal use.

  • Business vehicles/trailers mainly used for transporting goods on public roads, regardless of cost.


Consumers have rights which include, but not limited to, their goods being free of any undisclosed security, as well as being fit for their purpose, acceptable in appearance/finish, free from defects and goods that are safe and durable to a reasonable consumer. Guarantees for goods may be excluded, however, in matters of change of mind, misuse of products or in instances where a consumer is aware of faults prior to making a purchase.

 

If a product fails to meet a consumer guarantee, consumers have the right to request a repair, replacement or refund. However, consumers may not always be entitled to these requests. The resolution for a consumer issue will depend on whether the issue is deemed to be major or minor. Apple has ensured that refunds or replacements are available to consumers experiencing a major failure.

 

Further information relating to:

  • Fitbit’s representations of faulty products can be found here.

  • Apple’s representations of faulty products can be found here.

 

Coutts are experienced in providing advice on consumer guarantees and informing you of your rights arising under Australian Consumer Law. For further information contact:

Carrie Alton
Lawyer  
carrie@couttsmallikrees.com.au
02 4036 3307

Riley Earle
Lawyer
riley@couttsmallikrees.com.au
02 4607 2114