ACCC case against LG partially upheld

Full Court dismisses majority of appeal.

The Full Federal Court has partially upheld an appeal by the ACCC against an earlier judgment dismissing the ACCC’s case against LG Electronics Australia (LG).

The Full Court found that LG made two representations to consumers that were false, overturning the initial court decision, but dismissed the ACCC’s appeal in respect of other LG statements made to consumers.

In the circumstances where the Full Court held that LG had made a false representation, LG had in effect represented that no rights other than those under LG’s manufacturer’s warranty existed. This was false because consumers who have purchased faulty products may have rights under the Australian Consumer Law consumer guarantees.

“When consumers buy products, they come with a consumer guarantee under the Australian Consumer Law that they will be of acceptable quality. Manufacturer’s warranties exist in addition to the consumer guarantee rights,” ACCC Commissioner Sarah Court said.

“Consumers will often still be entitled under the consumer guarantee to a repair, refund or replacement when the manufacturer’s warranty does not apply or has come to an end,” she said.

The Full Court noted that LG’s training of staff not to mention the ACL unless it was raised specifically by a consumer risked LG making false or misleading representations, as it is a short distance from this to effectively denying the existence of the ACL consumer guarantees altogether.

“The ACCC welcomes the Court’s decision, which should serve as a warning to businesses they run a risk if they choose not to mention the ACL consumer guarantees to customers,” Court said.

In a statement to Appliance Retailer LG said: “The Full Federal Court dismissed the majority of the appeal brought by the ACCC from an earlier decision. The Full Court found that LG Australia did not engage in false or misleading conduct in 17 out of the 19 alleged representations concerning customers’ rights under the consumer guarantees in the Australian Consumer Law which were the subject of the appeal.

“The Court did not make a similar finding in relation to the remaining two representations but noted that the two consumers involved were not in fact misled. This is consistent with our commitment to customer service and handling of consumer guarantees. LG Australia is committed to honouring our obligations under Australian Consumer Law and will be carefully reviewing the findings of the Court.”

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