Dell In Trouble For Misrepresentations

  • Dell must publish warranty rights on website
  • New law sets out consumer guarantees
  • ACCC want vendors to realise consequences of ignoring new consumer laws

An announcement that fell under the radar due to the Christmas break was that Dell Australia has been forced to take steps to provide consumers with accurate information about their warranty rights as part of a court enforceable undertaking after the Australian Competition and Consumer Commission (ACCC).

The ACCC was concerned that from January 2008 to May 2010, Dell made written and verbal representations to its consumers that:

  • the consumer was only entitled to a refund, replacement or credit of the purchase price for a product within 15 days of the product's invoice date, when that was not the case
  • where that product developed a fault outside of Dell's Express Warranty period, the consumer was not entitled to any remedy for the product and would have to pay for any repair or replacement parts required to remedy the fault, when that was not always the case
  • where that product developed a fault within Dell's Express Warranty period, the consumer was required to prepay, and assume the risk of all shipping and transportation charges to return the product to Dell for repair or replacement, when that was not always the case, and
  • where a third party product was faulty the consumer was only entitled to seek remedies directly from the third party manufacturer, when that was not the case.

As part of the remedy Dell will:

  • email all customers who purchase products directly from Dell in the next three years, and publish on the Dell website for a period of three years, a notice outlining the warranty rights of consumers
  • publish an advertisement in the Weekend Australian notifying the public of the ACCC's investigation and inviting consumers to contact Dell if they wish to have their claims reassessed, and
  • upgrade its existing Trade Practices Compliance Program.

ACCC chairman Graeme Samuel said this outcome serves as a timely reminder that the ACCC will take action against businesses which mislead consumers about their statutory rights.

The undertaking also takes into account changes to the legislation arising from the transition from the Trade Practices Act 1974 to the Competition and Consumer Act 2010. In the New Year consumer transactions will be subject to the consumer guarantees set out in the new Australian Consumer Law.

"The ACCC will actively pursue businesses that misrepresent consumers' rights under the new law," Samuel said.

Consumer guarantees is the name of a new set of rights consumers will have every time they purchase goods or services in Australia from 1 January 2011. These replace the statutory warranties and conditions in the Trade Practices Act.

The consumer guarantees require that goods must be of acceptable quality, fit for any disclosed purpose, and must match any description given or sample shown. Sellers and manufacturers must also honour any express—or extra—warranty they give about the goods they sell. Manufacturers must also ensure they make repair facilities and spare parts are reasonably available for a reasonable time.