ACCC gets heavy with online warranties

Online consumers will be better informed about their warranties and return rights following action by the Australia Competition and Consumer Commission (ACCC), which will see non-complying companies put on notice.

ACCC Chairman Graeme Samuel said the Commission is concerned many online sites misrepresent consumers' rights.

"It appears many sites simply 'cut and paste' information from other sites on warranties and refunds without checking that the facts are correct," Samuel said.

"Online traders be warned: the ACCC is reviewing sites and will be considering action if remedial work is not quickly undertaken," he said.

The ACCC recently intervened with the trading of Australia?s leading online department store, Auction Alliance, which trades as Deals Direct.

"Deals Direct has given the ACCC court enforceable undertakings after concerns about the company's warranties and returns policy," Samuel said.

The company sells a wide variety of goods including electronics, kitchen items, furniture, computers, jewellery, tools, fitness equipment, alcohol, manchester, musical instruments and toys.

The ACCC was concerned the warranties and returns policy breached the Trade Practices Act 1974 because it contained misleading and false information about consumers' rights.

The ACCC was concerned about statements to the effect that:

- Goods were only warranted by Auction Alliance for 30 days.

- If Auction Alliance did accept goods for return after 30 days, the consumer was required to pay associated shipping costs.

- Consumers were only entitled to a refund if a replacement product could not be provided by Auction Alliance.

- In some cases Auction Alliance did not provide any warranty and consumers were required to deal directly with the supplier or manufacturer of the product.

Auction Alliance admitted its warranties and returns policy contained false and misleading statements about consumers? statutory warranty rights.

The business has worked with the ACCC to resolve the issues by amending its warranties and returns policy, and placing notices on its website and daily e-newsletters explaining its conduct.

"Online retailers must recognise that they are subject to the same law as shop front retailers," Samuel said.

"Ensuring compliance with the law may involve some costs but in the long run it will reduce the risk of action by the ACCC and will benefit the business by fostering goodwill among their customers," he added.