After PC discounter MSY was stung a whopping $203,500 for misrepresenting consumer warranty rights, we expected that the tech industry would have reviewed their terms with a legal microscope.
Not so, it seems … as we discovered when we were about to make a purchase from leading Apple vendor Computers Now.
CompNow’s T&Cs page explains:
- Due to copyright issues, opened software cannot be returned. Please verify your system requirements prior to opening the packaging.
- We will offer a store credit or exchange (but not a refund) for any unopened goods returned within 14 days of purchase.
- Goods returned after 14 days of purchase will only be accepted at the company’s discretion & may incur a 10% restocking fee.
- No refunds except in accordance with the Trade Practices Act.
What’s the problem?
Basically, the Australian Consumer Law says that if goods don’t satisfy certain basic quality and suitability requirements, the customer must be given a remedy, and in certain cases the remedy can be a return if the customer chooses that. And where that right applies, it doesn’t matter a hoot whether the goods are software, opened or unopened.
The way CompNow’s conditions are written reflects two failings.
First, it’s not a good look to be referring to the ‘Trade Practices Act’ well over a year since it became the ‘Competition and Consumer Act’ and considerably changed the consumer protection goalposts. Makes it look like the trader pays little or no attention to keeping up to date re its legal obligations.
Second, it shows the danger of treating consumer laws as an afterthought ie:
- “We can do this if we want”, and
- “We can do that if we like”, and
- “We can make this rule ‘cos we say so”
- PS “We’ll follow the law.
The first three lines create a strong impression that trader’s rules apply, and will lead many customers to think that’s how it has to work. After all, ‘No refunds except in accordance with the Trade Practices Act’ hardly makes it clear that powerful refund rights apply in particular cases, and would totally override the first three bullet points, without question.
Is it a big deal?
We bet MSY thinks so
Here’s what the judge said in their case:
It is appropriate that it should be made plain to retailers in the position of companies such as the respondents that misrepresenting to consumers what their warranty rights are is an unacceptable form of commercial conduct and illegal. It is appropriate, therefore, to encourage retailers not to give consumers the impression either that their statutory rights are curtailed or non-existent …
So the court ‘encouraged’ MSY with orders that the MSY Group:
- pay a $203,000 fine
- be restrained for a period of five years from making false or misleading representations about a consumer’s statutory warranty rights, including in relation to the new consumer guarantees introduced in the ACL on 1 January 2011
- implement a Trade Practices compliance program
- display corrective advertising in each of their stores
- publish a corrective notice on the MSY Technology website at www.msy.com.au, and
- pay the ACCC’s costs.
So what about CompNow?
CompNow’s terms are far from the worst example of warranty misrepresentation we have seen. But it’s just dumb for tech and telco companies not to review their customer terms, warranties and policies to ensure compliance with the Competition and Consumer Act 2010.