Deals Direct Wrapped Over Knuckles By ACC

Huge online retailer Auction Alliance, which trades as Deals Direct, has been told to sort out its online warranties.

One of Australia’s biggest online retailers, Deals Direct, has been hauled over the coals over its warranties and returns policies, according ACCC chair Graeme Samuel.

“Deals Direct has given the ACCC court enforceable undertakings after concerns about the company’s warranties and returns policy,” says Samuel.

The company sells a variety of goods including kitchen items, furniture, computers, electronics, jewellery, tools, fitness equipment, alcohol, manchester, musical instruments and toys.

The ACCC raised concerns that the warranties and returns policy breached the Trade Practices Act 1974 because it contained misleading and false information about consumers’ rights.

The ACCC was concerned about statements to the effect that:

  • goods were only warranted by Auction Alliance for 30 days
  • if Auction Alliance did accept goods for return after 30 days, the consumer was required to pay associated shipping costs
  • consumers were only entitled to a refund if a replacement product could not be provided by Auction Alliance, and
  • in some cases Auction Alliance did not provide any warranty and consumers were required to deal directly with the supplier or manufacturer of the product.

The Act provides that consumers have certain statutory rights in respect of goods purchased from a retailer. For example, if a good is defective the consumer may be entitled to request a refund from the retailer rather than accept an offer of replacement or repair. Such a right is usually available for a ‘reasonable time’ after the consumer received the good. A ‘reasonable time’ depends on the cost and quality of the good.

The ACCC was also concerned about materials, including warranty information, supplied with the Ultimate Pilates Workout Chair bought by consumers from Auction Alliance. The materials suggested the UPW Chair was manufactured and warranted by Guthy-Renker Australia Pty Ltd when this was not so.

Auction Alliance admitted its warranties and returns policy contained false and misleading statements about consumers’ statutory warranty rights. It has also admitted to misleading consumers about the manufacturer of the UPW Chair.

Auction Alliance has cooperated fully and has worked with the ACCC to resolve the issues. It has undertaken to amend its warranties and returns policy and place notices on its website and in its daily e-newsletters explaining its conduct. It has also agreed to consider warranty claims for faulty products purchased since 1 September 2008 where consumers may not have pursued a remedy because of Auction Alliance’s admitted false and misleading statements.

Auction Alliance has also agreed to write to consumers who purchased the UPW Chair offering to either provide a warranty on the same terms as the Guthy-Renker warranty or provide a full refund of the purchase price (including postage).

“Online retailers must recognise that they are subject to the same laws as shop front retailers,” Samuel said . “Ensuring compliance with the law may involve some costs but in the long run it will reduce the risk of action by the ACCC and will benefit the business by fostering goodwill among their customers.”