Online Retailer Fixes Misleading Messages

ACCC intervention causes company to change policy and guidelines.

An online retailer of computers, software and electronic goods has amended its site and will consider some warranty claims after Australian Competition and Consumer Commission intervention.

The ACCC raised concerns that representations made by website, breached the Trade Practices Act 1974 because its warranties and returns policy contained misleading and false information about consumers’ rights.

The intervention continues the ACCC’s focus on online traders who misrepresent consumers’ rights concerning warranties and refunds.

“Online traders should be aware that the ACCC reviews sites regularly and will consider action where remedial work is not quickly undertaken,” ACCC chairman Graeme Samuel warned today.

“Consumers have the same rights online as if they were to walk into a store. Basically, they can expect that a product would have a level of quality and performance that would be reasonable to expect, do what it is meant to do and match its description.”

The ACCC was concerned about statements to the effect that:

  • Mwave does not provide any warranty and consumers must deal directly with the manufacturer;
  • warranties arising from statute do not apply; and
  • the consumer is required to pay any shipping costs incurred in returning the faulty good to Mwave.

If it is necessary to return faulty goods to the place of purchase, the ACCC considers it reasonable for the seller to pay appropriate freight costs.

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.  Consumers are also entitled to seek a remedy from the retailer and need not be told that they must deal with the manufacturer directly.

Mwave admitted its warranties and returns policy contained false and misleading statements about consumers’ statutory warranty rights.  It has amended its warranties and returns policy and will place notices on its website in its e newsletters explaining its conduct.

Mwave has also agreed to consider warranty claims for faulty products purchased since 1 July 2007 where consumers were denied a remedy or may not have pursued a remedy because of Mwave’s admitted false and misleading statements.