LG slammed by ACCC over warranty claims

HAVE you bought a TV from LG? Then there’s a good chance you’ve been lied to, according to the competition watchdog.

ELECTRONICS giant LG is in hot water with the competition watchdog over allegations it misled consumers about their rights in relation to faulty products.

The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court against the manufacturer, alleging LG misrepresented to consumers with defective televisions that any remedies available were only limited to the LG manufacturer’s warranty.

If the LG warranty had expired, consumers were told they would have to pay the costs of assessing the failure, that the company had no further obligations, and any further step taken in relation to the television was an act of goodwill.

They were also told they were only entitled to have the television repaired, and not to a refund or replacement, and that the consumer was liable for the labour costs of the repair.

Under the Australian Consumer Law, consumers are entitled to a reasonable guarantee of quality, which is not limited to the period of the manufacturer’s warranty. If the product is unsatisfactory, under law consumers are entitled to refund, replacement or repair, at no cost to the consumer.

“When consumers buy products, they come with a consumer guarantee under the Australian Consumer Law that they will be of acceptable quality. This guarantee is in addition to any express manufacturer’s warranty,” ACCC chairman Rod Sims said in a statement.

“Although the manufacturer’s warranty only applies for a specified period of time, consumers will often still be entitled under the consumer guarantee to a repair, refund or replacement after the manufacturer’s warranty ends.

”The ACCC will not hesitate to take appropriate action against manufacturers who misrepresent consumers’ rights and remedies for defective products under the Australian Consumer Law. The Australian Parliament has conferred these important rights on consumers, and these rights should not be undermined by misrepresentations.”

Rod Sims: ‘The ACCC will not hesitate to take appropriate action against manufacturers who misrepresent consumers’ rights.’ Picture: Adam Smith

In a statement, a spokesman for LG Australia said: “The ACCC has initiated action against LG Australia in the Federal Court over allegations that LG has breached the Australian Consumer Law with regards to consumer guarantees.

“Due to the ongoing nature of these proceedings, no further comment will be made at this stage except to say that LG is committed to its customers and compliance with its obligations under the Australian Consumer Law.”

Consumer group Choice has previously likened extended warranties to throwing money down the drain.

“What we’ve found when it comes to extended warranties is in very few cases are they worth the money,” spokesman Tom Godfrey said earlier this year.

“Under Australian Consumer Law, consumers have rights to refund, repair or replacement, and really spending money on extended warranties is just throwing cash away.

“The other thing to suggest is if you are tempted by an extended warranty, it’s really important to read the terms and conditions carefully to make sure you’re getting value for money.”

LG has been in trouble with the ACCC over similar claims in the past, being found guilty of making false and misleading representations over mobile phone warranties in 2006.

The ACCC is seeking declarations, injunctions, pecuniary penalties, corrective notices, a trade practices compliance program and costs.

The matter is listed for a Case Management Conference in the Federal Court in Melbourne before Justice Middleton on February 5.

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