ACCC negotiates with LG over misleading statements

By James Wells

CANBERRA: The Australian Competition and Consumer Commission (ACCC) is continuing to negotiate with LG Electronics regarding false and misleading warranty statements which were first alleged on 31 December, 2005.

The ACCC has since instituted proceedings in the Perth Federal Court against LG for false representations as well as engaging in misleading or deceptive conduct in relation to statements made in online LG mobile phone user manuals concerning the existence, exclusion or effect of consumer statutory warranties, conditions, rights or remedies.

The ACCC alleged that by making the representations which were contained in the user manuals since at least November 2005, LG breached two sections of the Trade Practices Act.

The ACCC is seeking: declarations that LG contravened sections 52 and or 53(g) of the Act, injunctions restraining similar conduct in the future, orders for corrective and public notices and orders for the upgrade of LG’s trade practices compliance program and costs.

The matter was listed for a directions hearing in the Federal Court in Perth on February 2006, but this was adjourned to March.

According to a spokesperson for the company, LG is attempting to reach a compromise with the ACCC.

“At this stage, LG is still in negotiations with the ACCC. We will provide you with a comment when a resolution has been reached,” the spokesperson said.

This is not the first time that LG Electronics Australia has been reported to the ACCC. On 6 April, 2005, the ACCC asked LG Electronics to correct misleading representations it made over four models of their washing machines ranging from 7kg to 9kg in capacity.

The ACCC found that between May 2004 and August 2004, LG Australia released certain washing machines for sale, claiming they were 4A rated by the Water Services Association of Australia (WSAA).

The water rating helped the front loading machines attract a $150 Waterwise rebate through the Western Australia Water Corporation, but because accreditation had not been granted some consumers had their claims rejected.