Four Harvey Norman franchisees have been a fined a total $116,000 for making false or misleading representations to customers regarding consumer guarantee rights.

The four franchisees involved are: Launceston Superstore in Launceston, Tasmania ($32,000); Moonah Superstore in Moonah, Tasmania ($28,000); HP Superstore in Hoppers Crossing, Victoria ($28,000); and Salecomp in Sale, Victoria ($28,000).

The Federal Court found that while the allegations made by the A Competition and Consumer Commission (ACCC) against each of the franchisees differ, examples of the misrepresentations, include the franchisee had no obligation to provide remedies for damaged goods unless notified within a short specified period and the franchisee had no obligation to provide an exchange or refund for faulty goods supplied.

In addition, Launceston Superstore also stated on receipts that “no claims will be honoured on damaged goods unless notified within 24 hours of delivery or pick-up”.

“These penalties send a strong message to all businesses, including franchisees, that they must not mislead consumers about their rights to repair, replacement or refund for faulty goods under the Australian Consumer Law,” ACCC chairman Rod Sims said.

“Complaints about consumer guarantees represent a quarter of the consumer protection complaints that the ACCC receives each year, The ACCC has moved from raising awareness of the law to taking enforcement action where it believes consumers have been misled about their rights under the consumer guarantee provisions of the ACL.”

In addition to penalties, the court also made orders including declarations and injunctions in relation to each of the four franchisees. With the exception of Launceston Superstore, which ceased trading on 30 November 2012, the franchisees are required to display in-store corrective notices and implement a consumer law compliance program. 

The ACCC is awaiting judgment in proceedings against another six Harvey Norman franchisees for similar conduct, where the ACCC is seeking court orders including penalties, declarations, injunctions, corrective notices and compliance training.