MSY Technology ordered to pay penalties of $750,000 for consumer guarantee misrepresentations
The Federal Court has ordered penalties totalling $750,000 against MSY Technology Pty Ltd, MSY Group Pty Ltd, and M.S.Y. Technology (NSW) Pty Ltd (MSY Technology) for misrepresenting consumers’ rights to remedies for faulty products.
MSY Technology operates 28 retail stores across Australia and online, selling computers, computer parts, accessories and software. MSY Technology admitted that it made false or misleading representations on the MSY website, and in oral and email communications to consumers about their rights.
“MSY had misrepresented consumers’ rights to a repair, replacement, or a refund where a product developed a fault. Businesses must ensure their refund and returns policies, and any representations accurately reflect their obligations under consumer law,” ACCC Deputy Chair Delia Rickard said.
“These proceedings and the penalties imposed signal to businesses that the ACCC will not hesitate to take appropriate enforcement action where it identifies misleading representations about consumers’ rights.”
“This is the second time the ACCC has taken action against MSY entities. The court imposed penalties in 2011 for misleading consumer warranty representations,” Ms Rickard said.
The Federal Court also made other orders by consent including injunctions, a comprehensive ACL compliance training program, publication orders, and payment of $50,000 towards the ACCC’s costs.
Following the commencement of proceedings, MSY Technology made admissions and agreed to joint submissions on liability and relief (including penalty) that were filed with the Court.
MSY Technology operates nationally, with 28 retail stores and an online site that sells computers, computer parts, accessories and software to consumers.
In 2011, a number of MSY entities were penalised $203,500 for false and misleading consumer warranty representations, following action by the ACCC.
Consumer guarantees cannot be excluded restricted or otherwise modified by a seller’s terms or conditions. Retailers must ensure their practices do not contravene the ACL when consumers try to return a faulty product or ask for a remedy under the ACL.
To find out more about consumer guarantee rights, visit the ACCC’s page on consumer rights & guarantees.
The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court against MSY Technology Pty Ltd, MSY Group Pty Ltd, and M.S.Y. Technology (NSW) Pty Ltd (MSY Technology) alleging that MSY Technology has misrepresented consumers’ rights to remedies for faulty products.
MSY Technology entities operate 28 retail stores across Australia and an online site which sells computers, computer parts, accessories, and electronic goods.
The ACCC alleges that between January 2013 and February 2016, statements made by MSY Technology Pty Ltd and/or MSY Group Pty Ltd on the MSY Technology website, and similar representations made in store to some consumers in New South Wales and Victoria by employees of MSY Technology Pty Ltd and M.S.Y. Technology (NSW) Pty Ltd, misrepresented consumer rights by claiming that:
- MSY Technology had discretion over whether a customer was entitled to a remedy for a faulty product
- It was up to MSY Technology to choose which remedy it would provide customers
- MSY Technology would only provide a remedy for products returned within seven days
- MSY Technology may require the customer to pay an administration fee to receive a remedy for a faulty product that is out of warranty
- MSY Technology would provide no remedies in relation to faulty software products.
“The ACCC alleges that MSY Technology breached the Australian Consumer Law by misrepresenting consumers’ rights to a repair, replacement, or a refund when they have purchased faulty products,” ACCC Commissioner Sarah Court said.
“Businesses must not mislead consumers about their consumer guarantee rights. Consumers who have purchased a faulty product have a right under the consumer guarantees to remedies which businesses cannot restrict, alter, or remove.”
“The ACCC is particularly concerned that this type of conduct by businesses which have a national presence has the potential to cause significant consumer harm,” Ms Court said.
The ACCC is seeking declarations, injunctions, a comprehensive compliance program, penalties, and costs.
In 2011, a number of MSY Technology entities were penalised $203,500 for false and misleading consumer warranty representations, following action by the ACCC.
Consumer guarantees apply to all purchases and cannot be removed or reduced by a business’s terms and conditions. Where a good develops a major failure, consumers have a right to a replacement or refund from the supplier of the good. For goods that develop a minor failure, a consumer has a right to have the good remedied (at the suppliers discretion) within a reasonable time. If the supplier doesn’t do so, the consumer can either reject the goods and get a refund or have the problem fixed and recover reasonable costs of doing so from the supplier.
To find out more about consumer guarantee rights, please visit ACCC’s page on consumer rights & guarantees.
Under the Australian Consumer Law, when you buy products and services they come with automatic guarantees that they will work and do what you asked for. If you buy something that isn’t right, you have consumer rights.
Businesses must guarantee products and services they sell, hire or lease for:
- under $40 000
- over $40 000 that are normally bought for personal or household use.
Business vehicles and trailers are also covered, irrespective of cost, provided they are used mainly to transport goods.
Businesses must provide these automatic guarantees regardless of any other warranties they give to you or sell you.
If a business fails to deliver any of these guarantees, you have consumer rights for:
Since 1 January 2011, the following consumer guarantees on products and services apply.
Products must be of acceptable quality, that is:
- safe, lasting, with no faults
- look acceptable
- do all the things someone would normally expect them to do.
Acceptable quality takes into account what would normally be expected for the type of product and cost.
Products must also:
- match descriptions made by the salesperson, on packaging and labels, and in promotions or advertising
- match any demonstration model or sample you asked for
- be fit for the purpose the business told you it would be fit for and for any purpose that you made known to the business before purchasing
- come with full title and ownership
- not carry any hidden debts or extra charges
- come with undisturbed possession, so no one has a right to take the goods away or prevent you from using them
- meet any extra promises made about performance, condition and quality, such as life time guarantees and money back offers
- have spare parts and repair facilities available for a reasonable time after purchase unless you were told otherwise.
- be provided with acceptable care and skill or technical knowledge and taking all necessary steps to avoid loss and damage
- be fit for the purpose or give the results that you and the business had agreed to
- be delivered within a reasonable time when there is no agreed end date.
Consumer guarantees on products and services also apply to:
- bundled products and services
- gifts with proof of purchase
- sale items
- online products and services bought from Australian businesses
- second-hand products from businesses, taking into account age and condition.
You can claim a remedy from the retailer if the products do not meet any one or more of the consumer guarantees, with the exception of availability of spare parts and repair facilities.
The retailer can’t refuse to help you by sending you to the manufacturer or importer.
You can claim a remedy directly from the manufacturer or importer if the goods do not meet one or more of the following consumer guarantees:
- acceptable quality
- matching description
- any extra promises made about such things like performance, condition and quality
- repairs and spare parts – the manufacturer is responsible for ensuring that spare parts and repair facilities (a place that can fix the consumer’s goods) are available for a reasonable time after purchase unless you were told otherwise. How long is ‘reasonable’ will depend on the type of product.
You are only entitled to recover costs from a manufacturer or importer, which include an amount for reduction in the product’s value and in some cases compensation for damages or loss.
You can claim a remedy from the supplier if the services do not meet any of the consumer guarantees in relation to services. Remedies include cancelling a service and in some cases compensation for damages and loss.
Consumer guarantees do not apply if you:
- got what you asked for but simply changed your mind, found it cheaper somewhere else, decided you did not like the purchase or had no use for it
- misused a product in any way that caused the problem
- knew of or were made aware of the faults before you bought the product
- asked for a service to be done in a certain way against the advice of the business or were unclear about what you wanted
Rights to a repair, replacement, refund, cancellation or compensation do not apply to items:
- worth more than $40 000 purely for business use, such as machinery or farming equipment
- you plan to on-sell or change so that you can re-supply as a business
- bought as a one-off from a private seller, for example at a garage sale or fete (but you do have rights to full title, undisturbed possession and no unknown debts or extra charges)
- bought at auction where the auctioneer acted as an agent for the owner (but you do have rights to full title, undisturbed possession and no unknown debts or extra charges).
Different laws apply to insurance or financial services and for products or services you bought before 2011.