Fisher & Paykel and Domestic & General will have to pay a penalty of $200,000 each after the Federal Court declared they had made false or misleading representation when offering extended warranty to customers.
Between January 2011 and December 2012, consumers who had purchased a product from Fisher & Paykel received letter from Fisher & Paykel and Domestic & General inviting them to purchase extended warranty for their product.
According to the ACCC, the statements included in the letters included the following:
Your Fisher & Paykel [appliance] is now a year old, which means that you have 12 months remaining – after that your appliance won’t be protected against repair costs.
Australian Consumer Law (ACL) states it is possible for consumers to be protected against repair costs beyond the warranty period put forward by the manufacturer. Justice Wigney held that the letters informed customers that they would not be illegible for repair warranty after two years of purchase unless they paid to extend their warranty.
“The conduct here unquestionably involves serious and significant contraventions of the ACL. The misleading representations concerned extended warranties for well-known consumer goods,” Justice Wigney said.
“The misrepresentations potentially misled or deceived thousands of consumers in respect of the supposed need for extended warranty plans.”
Rod Sims, ACCC Chairman, said the ruling sends a message to companies in danger of pushing ACL boundaries.
“The Court’s decision sends a strong warning to businesses that they must not misrepresent or understate consumers’ rights under the ACL when marketing extended warranties. This is especially important for companies like Domestic & General which specialise in offering warranty services,” Mr Sims said.
“Under the ACL, consumers may have a right to a repair, replacement or refund regardless of any extended warranty or express manufacturers’ warranty,” Mr Sims said.
Apart from the fines, the Court also ordered Fisher & Paykel and Domestic & General to pay for the ACCC’s costs of the proceedings and to update their compliance programs.
