Computer sales business MSY Technology has been fined $750,000 after the Australian Competition and Consumer Commission (ACCC) dragged it to the Federal Court for the second time in six years, claiming it misled consumers about their rights to remedies for faulty products.
The consumer watchdog confirmed this week that MSY Technology Pty Ltd, MSY Group Pty Ltd and M.S.Y Technology (NSW) Pty Ltd have been ordered by the Federal Court to pay $750,000 in fines after communicating to shoppers on its website, and in oral and email communications, misleading information about whether they were entitled to a repair, refund or replacement after purchasing a faulty product.
MSY sells computers, computer parts and software across 28 retail sites, as well as online. In 2011 the Federal Court ordered the business pay $203,500 in penalties after it was found to have misled consumers about their rights to product warranties, after the company had told customers it did not provide statutory warranties for its products.
ACCC deputy chair Delia Rickard said in a statement on the most recent fines the penalties are a reminder for businesses that they “must ensure their refund and returns policies, and any representations accurately reflect their obligations under consumer law”.
Under Australian Consumer Law, consumers are entitled to a refund, repair or replacement in cases where there is a major fault with the product.
MSY Technology admitted it had made false or misleading representations to consumers about their rights. The Federal Court ordered the business also complete a comprehensive compliance training program in consumer law, and contribute $50,000 towards the consumer watchdog’s court costs.
SmartCompany has contacted MSY Technology for comment.
Executive Director of the Australian Retailer’s Association Russell Zimmerman says there are a number of areas retailers must watch out for when it comes to correctly communicating returns policies.
“Good retailers are going to become flexible at this time of year, and they will assist customers in the lead-up to Christmas,” he says.
To ensure companies are complying with their obligations under consumer law, Zimmerman suggests business owners designate a contact person for dealing with returns and repair requests, and make sure staff are trained in what to do if a customer requests an exchange or other remedy.
“For an SME, the most important thing is to instruct their staff on their responsibilities and if in doubt, have a contact point of someone they can go to to make the decisions,” he recommends.
Areas that tend to trip retail businesses up include the incorrect belief from retailers that they can ask a customer to send a product away to the manufacturer if there is a fault.
“What we’ve seen happen with warranties is that retailers say, ‘you’ll have to take that [damaged item] back to a the manufacturer. That is totally incorrect,’” Zimmerman says.
He says if a product is under warranty and has a fault, the store that sold it is responsible for sending away for repair or replacement, but many businesses do not do this.
“If you’ve sold the product, it’s the retailer’s responsibility to send it back to the supplier.”
The ACCC provides information for businesses about their full set of responsibilities when it comes to exchanges and refunds, but beyond this, Zimmerman says the best retailers will try hard to work with customers and be understanding, particularly in the lead-up to the end-of-year.
“Overall, when it comes to keeping a good customer, you’re always better to err on the side of caution,” he says of working with and honouring returns requests.
Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on Twitter, Facebook, LinkedIn and Instagram.
