Eleven Harvey Norman franchisees face ACCC “deceptive conduct” charge

By Patrick Avenell

The ACCC has commenced legal proceedings against 11 Harvey Norman franchisees. These businesses are accused of “misrepresenting consumer rights”.

The 11 franchisees are:

Avitalb Pty Limited (Albany, Western Australia)
Bunavit Pty Limited (Bundall, Queensland)
Camavit Pty Limited (Campbelltown, New South Wales)
Gordon Superstore Pty Limited (Gordon, New South Wales)
HP Superstore Pty Limited (Hoppers Crossing, Victoria)
Ipavit Pty Limited (Ipswich, Queensland)
Launceston Superstore Pty Limited (Launceston, Tasmania)
Mandurvit Pty Limited (Mandurah, Western Australia)
Moonah Superstore Pty Limited (Moonah, Tasmania)
Oxteha Pty Limited (Oxley, Queensland)
Salecomp Pty Limited (Sale, Victoria)

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The charges against these franchisees relate to “false or misleading representations made to consumers”. The ACCC will allege that these business engaged in “misleading and deceptive conduct” when interacting with consumers, in contravention of Australian Consumer Law.

“The ACCC alleges that the franchisees misled consumers about these rights by making representations including that:

  • The franchisee had no obligation to provide remedies for damaged goods unless notified within a specific period of time such as 24 hours or 14 days.
  • The franchisee had no obligation to provide remedies for goods still covered by the manufacturer’s warranty.
  • The franchisee had no obligation to provide refunds or replacements for particular items such as large appliances or items priced below a certain amount.
  • Consumers must pay a fee for the repair and return of faulty products.”

At the heart of this claim are the new rules concerning warranties and guarantees that came into effect with the introduction of Australian Consumer Law on 1 January 2011. The ACCC says it has received over 16,000 complaints from members of the public directly relating to product guarantees so far this year.

“The Australian Consumer Law provides consumers with rights to certain remedies from retailers and manufacturers when goods fail to comply with the consumer guarantee provisions, including that goods are of acceptable quality and fit for the purpose for which they were sold,” ACCC chairman Rod Sims said.

“These rights cannot be excluded, restricted or modified.”

Harvey Norman has previously been in trouble with The ACCC for misleading consumers over the availability of 3D broadcasts, resulting in a $1.5 million fine in 2011.

Earlier that year, six West Australian Harvey Norman franchisees were fined for advertising a Kodak camera that was not available in their stores. At that time, chief operating officer John Slack-Smith said Harvey Norman would use the experience of those six to better educate its franchisees on Australian Consumer Law.

“We are simply looking to understand and properly respond in order for our franchisees to learn from this incident and to move forward,” he said. “This is new environment in consumer law, one [with] an increased level of both responsibility and process [for] all retailers [so] that we are complying with the legislation and ensuring that consumers are being clearly informed about the offers through advertising.”

The ACCC will commence seeking penalties, declarations, injunctions and costs when the matter is next heard in Federal Court on 19 December 2012.

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