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LG fined $160,000 for misrepresentation

ACCC court proceedings against LG

The Australian Competition and Consumer Commission (‘ACCC’) commenced proceedings against LG Electronics Australia Pty Ltd (LG) in December 2015 alleging that LG misrepresented to consumers, retailers or repairers that the remedies available to consumers of faulty televisions were limited to the LG manufacturer’s warranty.

LG claimed no obligations after manufacturer’s warranty expired

LG advised two consumers that where the defect in their televisions occurred after the LG manufacturer’s warranty expired, the consumer was only entitled to a remedy if the consumer paid for the costs of assessing the failure and that LG had no further obligations to the consumer. LG represented that any step it took in relation to the television was an act of goodwill and that the consumer was only entitled to have their television repaired (and not to a refund or a replacement), with the consumer being liable for the labour costs of the repair.

Proceedings go on appeal

The ACCC’s case was dismissed at first instance in September 2017. In June 2018, the Full Federal Court partially upheld an appeal by the ACCC against the earlier judgment dismissing the ACCC’s case.

Full Federal Court agrees with ACCC and finds LG misrepresented to consumers

The Full Court found that LG made misleading representations to two consumers who believed they had purchased faulty televisions, when it implied in phone calls they had no rights apart from those under LG’s manufacturer’s warranties. The Court imposed $160,000 in penalties on LG.

Australian Consumer Law provides protections where goods are faulty

Consumers who purchase faulty products have the right to repair, replacement or refund under consumer guarantees in the Australian Consumer Law that cannot be excluded or modified by a company’s warranty or general statements.

The Court’s decision is a reminder that making misleading statements about consumer guarantee rights, even to only one or two consumers, can result in significant penalties being imposed.



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Please note that this article has been prepared by Margaret Miller, partner of Bell Legal Group, for information purposes only. It is not legal advice nor should it be relied upon as such.