South Korean-based electronics giant LG Australia has been slammed by the ACCC for the fourth time in the past five years, this time over concerns LG may have misled consumers about the energy efficiency characteristics of its fridges.
The consumer watchdog investigated LG in relation to three fridge models that included an energy saving device whereby the fridge switched into energy-saving mode when the door had been closed for a period.
While there was a big difference between the energy consumption of the fridge when the energy-saving switch was engaged and when it wasn’t, the ACCC was concerned LG had only promoted the lower energy consumption figure.
“The cost of electricity is paramount to all consumers in Australia such that energy efficiency claims can significantly influence consumer purchasing decisions,” ACCC chairman Graeme Samuel said in a statement.
“To ensure companies cannot take advantage of this, the ACCC will thoroughly investigate claims that have the potential to be false or misleading. Companies need to have in place measures to ensure their claims are accurate.”
LG has agreed to keep a compensation scheme it has been running since March open until November. Reports suggest the scheme has already paid out $500,000.
The electronics giant has also agreed to “conduct additional testing on a selection of refrigerators, televisions, clothes washers, clothes dryers and dishwashers prior to release into the Australian market.”
This is not LG’s first run in with the ACCC over home appliances.
In April 2005, the LG was forced to correct advertisements about its range of washing machines, after it has made misleading claims about water efficiency.
The next year, LG agreed to provide consumers with up to $3.1 million in compensation after mislabelling 15,000 air conditioners which did not meet promised energy efficiency levels.
Also in 2006, the Federal Court declared LG had made false and misleading statements about the existence and duration of statutory conditions and warranties.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
