Aussie retail giant JB Hi-Fi sued over allegations it sold ‘junk’ extended warranties for more than a decade

Aussie retail giant JB Hi-Fi has hit back after shocking allegations it ripped off customers for more than a decade.

Aussie electronic retail giant JB Hi-Fi has responded to allegations it ripped off customers for more than a decade by selling them “junk” extended warranties.

Law firm Maurice Blackburn Lawyers lodged the class action in Victoria’s Supreme Court last Friday, claiming the extended warranties sold by the retailer on purchases since 2011 were “of little to no value”, as customers already had the same rights for free under Australian Consumer Law.

Refunds for thousands of customers who bought into the expensive policies – between January 1, 2011 and December 8, 2023 – are now being sought.

But JB Hi-Fi has disputed the claims, stating it has always complied with the relevant laws at all times.

The retailer has indicated it will defend the proceedings in court.

JB Hi-Fi is being sued over allegations it ‘ripped off’ customers by selling them extended warranties that had ‘little to no value’ for more than a decade. Picture: NCA NewsWire / Andrew Henshaw

“These warranties are in most cases little more than a junk add-on to consumers’ purchase of the household goods they actually want,” Maurice Blackburn Lawyers principal Miranda Nagy said.

The warranties relate to offers by JB Hi-Fi for purchases on electronics, home appliances and home entertainment products.

They were at times called extended care plans or extra care plans.

Ms Nagy said it would be alleged JB Hi-Fi used “misleading or deceptive conduct” or “unconscionable conduct” in selling the extended warranties by telling customers either directly or by implying that the warranties “operated for longer than the rights” under consumer law, provided benefits that consumer law did not or were “of value” to customers.

Maurice Blackburn Lawyers alleges JB Hi-Fi engaged in ‘misleading or deceptive conduct’. Picture: NCA NewsWire / Jeremy Piper

“JB’s extended warranties expire just 3-6 years after purchase, but they add substantially to the cost,” Ms Nagy said.

“Our case alleges they added nothing meaningful to the strong rights for repair, replacement or refund under the Australian Consumer Law rights that consumers already enjoy.”

It’s further alleged JB Hi-Fi also failed to give customers important information about their rights under the consumer law “which they needed to make a properly informed decision” about buying an extended warranty.

In a statement, a JB Hi-Fi spokeswoman said: “JB Hi-Fi takes compliance with its legal obligations very seriously and considers that it has complied with relevant laws at all times.

“JB Hi-Fi intends to vigorously defend the proceedings.”

The spokeswoman said it was not appropriate to comment further due to legal proceedings starting.

Earlier this year, consumer advocate Choice found seven out of 10 Australians believed extended warranties gave them extra protections beyond what was already guaranteed under Australian Consumer Law.

Thirty-five per cent of people surveyed said they purchased an extended warranty because a salesperson suggested it.

Another 7 per cent said they felt “pressured” by a salesperson into buying an extended warranty.

Earlier this year, JB Hi-Fi revealed it had cut its dividend after a 3.7 per cent fall in its full-year profit during the recent financial year.

The retailer’s total profits slumped to $523.6m despite recording $9.62bn in revenue.

Originally published as Aussie retail giant JB Hi-Fi sued over allegations it sold ‘junk’ extended warranties for more than a decade