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'We can't help you': Harvey Norman fined for misleading consumers about their rights

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A Harvey Norman franchisee has been fined $52,000 for repeatedly telling customers with new but problem-plagued computers that it couldn't help them.

The Federal Court found a Harvey Norman store on the Gold Coast breached two sections of consumer law by falsely telling customers with malfunctioning computers that it had no obligation to provide a remedy and couldn't assist any further without payment.

The Harvey Norman electronics chain has now paid $286,000 in penalties for misleading consumers about their rights.

The Harvey Norman electronics chain has now paid $286,000 in penalties for misleading consumers about their rights. Photo: Scott Barbour

One woman, whose Sony laptop sometimes failed to start, failed to shut down and was slow, kept being told by a salesperson: "We can't help you."

One man, who complained his new Acer desktop randomly froze and shut down, was told on two occasions: "There's nothing we can do."

Under consumer law, products sold in Australia come with a consumer guarantee, meaning they must be of acceptable quality. If not, the retailer must offer a repair, replacement or a refund.

The proceedings were brought by the Australian Competition and Consumer Commission.

"This penalty is a timely reminder to all businesses, whether large or small, that they must not mislead consumers about consumer guarantee rights under the Australian Consumer Law," the ACCC's acting chairman Michael Schaper said.

The latest order bumps up the total amount of penalties paid by Harvey Norman franchisees in regards to false or misleading representations about consumer rights to $286,000.

In 2014, four franchisees were hit with penalties ranging from $10,000 to $26,000 - an Oxley store in Queensland, a Gordon store in NSW, and Mandurah and Albany stores in Western Australia.

Justice John Dowsett said, in imposing a penalty of $52,000 against Bunavit, the operator of the Bundall superstore in Queensland, he took into account that there were more impugned statements than in other comparable cases, the conduct continued over a longer period, and more staff members were involved.

He also took into account Bunavit's sales revenue of nearly $70 million and net profit of $1.2 million in 2012-13 - "significantly larger" than other stores in comparable cases.

In the Bunavit case, the salesperson told the customer with the faulty Sony laptop that they couldn't help her and to approach the manufacturer.

But when she received her laptop back from an Sony-authorised service centre, it had developed more problems. Again, Harvey Norman told her to go back to Sony.

When she got her laptop back for the second time, the DC input wasn't working, meaning she could no longer charge the battery.

Harvey Norman employees then told her the DC input issue was her problem, they couldn't help her unless she wanted to pay, and they were not willing to pay for a refund or replacement.

"The reason is that you did not come to us for the initial repair," a salesperson said.

"If you send the laptop back to Planet Tech to repair the DC input issue, then we will agree to pay for half of the repair costs," the same salesperson said later on the same day.

Only after she lodged complaints with the ACCC and the Queensland Office of Fair Trading did Harvey Norman begin fixing the laptop problems.

Justice Dowsett said broad denials of liability by a retailer may lead a consumer into thinking the persistence required would be "too much trouble, with too little assurance of a satisfactory outcome".

"A great number of electronic devices are purchased by consumers from retailers such as Bunavit. Consumers frequently return such devices, claiming that they are faulty, or not of an acceptable quality," he said.

"A retailer should ensure that its staff members are informed about, and conduct themselves in conformity with, the Australian Consumer Law."

Fairfax Media has contacted Harvey Norman for comment.

95 comments so far

  • Bought a computer from Gerry's Joint years ago, months later a young fellow at Byte Rocky, a Rockhampton Fixit operation, told me he had to almost re-build it due to inferior components. True story, never again.

    Commenter
    Geronimo
    Location
    Yippee Yi Yo
    Date and time
    January 18, 2016, 11:44AM
    • Sounds to me that you got conned by a computer store that does not appear to still exist.

      Commenter
      Bildo
      Date and time
      January 18, 2016, 2:28PM
    • Rebuild it seriously? And they presumably charged you to rebuild? I'd be taking Byte Rocky to the ACCC. HN doesnt build computers and all the brands I've ever seen are reputable well known brands. I've never known a computer to have inferior components as most components in any laptop are common eg Intel chipset, Seagate or WDD hard drives etc. What brand was your laptop?

      Commenter
      Dino
      Date and time
      January 18, 2016, 2:33PM
    • How many years ago was it working how did the guy justify it was built "with inferior parts maybe inferior to todays parts. If it was/had been working OK I think you got ripped off in having an upgrade. HN just send them back to manufacturer to fix.

      Commenter
      HoppyPete
      Location
      Wenty
      Date and time
      January 18, 2016, 2:53PM
    • Can you be more details?
      E.g. brand of computer, types of problem, so call inferior components.....

      Commenter
      Gerson
      Location
      Sydney
      Date and time
      January 18, 2016, 6:54PM
  • I've had problems with Harvey Norman Electronic in the past. I bought an IPod a couple of years ago and when problems with the battery started shortly after purchase it returned to Harvey Norman for a repair/replacement and was told to return the device to Apple. It was only when I began to complain loudly to the manager in front of other customers about the lousy service at the store that the manager took the faulty iPod and gave me a new replacement and ushered me out of his department.
    The upshot was I became a regular shopper at JB HiFi for my electronic purchases and the Sydney Apple Store for all things Apple. Both stores are a pleasure to deal with rare complaints dealt with ptomptly and politely.

    Commenter
    Tom
    Location
    Mosman
    Date and time
    January 18, 2016, 11:59AM
    • My experience precisely, JB and Apple better bets

      Commenter
      Versatile
      Location
      Manly Vale
      Date and time
      January 18, 2016, 12:55PM
    • Agreed, I even went back to JBHiFi after buying a laptop and a week later they had it on sale. When I started saying to the Manager I wasn't happy because I would have waited until the sale if I was told he refunded me the difference without any complaints and apologised for any issues this may have caused. I ended up using that money to buy a wireless keyboard and mouse so we were all winners!

      Commenter
      Really?
      Location
      Perth
      Date and time
      January 18, 2016, 2:43PM
    • ditto, we find JB-HiFI an excellent place to shop.
      Had a small Galaxy tablet that stopped running as we were travelling, 3 weeks after we bought it in Sydney. The store in Ballarat put it on charge while we went to lunch and rang the Sydney store when it still didn't work (they had no stock themselves at the time). Sydney store had a new one ready to swap over at our return the next week.

      Commenter
      stevecro
      Date and time
      January 18, 2016, 3:14PM
  • I purchased an ACER laptop from a Harvey Norman store and it is currently off being repaired, for the second time. If it fails again, I will be seeking a refund. If anything, the store I have been dealing with have been very helpful.

    Commenter
    My Two Cents
    Date and time
    January 18, 2016, 12:00PM

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