The suit is set to go before the Federal Court
Echo Law has filed a class action in the Federal Court against Harvey Norman, Domayne and Joyce Mayne on behalf of customers who were reportedly sold “unnecessary and worthless” extended warranties.
The suit covers consumers who purchased Harvey Norman’s Product Care warranties between 17 September 2018 and the present. According to the firm, the warranties, which are offered when customers buy electronics and whitegoods, do not provide additional protection to customers; they are already entitled to the rights and remedies therein under the Australian Consumer Law.
Based on product type and coverage length, customers have generally been charged 10%-40% of the product price for a Product Care warranty, the firm said.
“Harvey Norman has been making its customers pay extra for rights that they already have for free. It’s a practice that is hugely profitable for the retailer”, Echo Law senior associate Dr Lauren Meath said. “We allege Harvey Norman breached the law by engaging in misleading or deceptive conduct as well as unconscionable conduct, by leading customers to believe that the extended warranty would give them additional protection they would not have otherwise had”.
The class action aims to obtain compensation for customers that includes refunds with interest. Harvey Norman’s revenue from selling Product Care is unknown based on its financial reports, but the firm’s estimation is that customers have forked over “hundreds of millions” in the period delineated by the suit.
Litigation funder CASL is backing the suit.
“This case is an example of how class actions are an important enforcement mechanism for Australia’s consumer protection laws”, CASL senior litigation manager Siobhan Moore said.
The ACCC had previously raised concerns regarding Product Care and had highlighted problems with selling practices and potentially misleading conduct in relation to how much overlap there was with customers’ existing rights under the Australian Consumer Law.
