A class action on behalf of Harvey Norman customers sold unnecessary and worthless extended warranties has been issued by Echo Law in the Federal Court of Australia.
Tens of thousands of Harvey Norman, Domayne and Joyce Mayne customers who were sold extended warranties between September 2018 to the present day will be covered by the class action, with hundreds of millions of dollars estimated to have been paid by those customers in largely worthless warranty costs over the period.
Harvey Norman's 'Product Care' is an extended warranty sold with products such as electronics and whitegoods, which claims to offer additional protection to consumers where there is a fault with their product. Echo Law's class action alleges that Product Care provides no value to consumers, as the 'protection' it offers customers is no more than the rights and remedies already provided to those consumers under the Australian Consumer Law.
The amount of money Harvey Norman customers have paid for Product Care is typically an additional 10 to 40 per cent of the product price, depending on the type of product and length of coverage.
"We have heard from hundreds of Harvey Norman customers who are furious that they've paid thousands of dollars for Product Care over the years and for little or no benefit," Dr Lauren Meath, Echo Law Senior Associate said. "They feel like they've been tricked." "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."
"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."
"However, when you look at the rights all consumers are guaranteed under the Australian Consumer Law and the long list of fine print exclusions to Harvey Normans' Product care, it becomes clear there is nothing substantially 'additional or 'beneficial' about this product."
"In reality Harvey Norman is packaging up the obligations it already has to repair, replace or refund faulty products sold in its stores and is selling this to its customers at a premium." "Harvey Norman needs to be held accountable, do the right thing, and refund that money with interest."
While the revenue collected by Harvey Norman through the sale of Product Care has not been disclosed in its financial reporting, Echo Law estimates that Harvey Norman customers have paid hundreds of millions of dollars for the junk protection since September 2018, which is the period covered by the class action.
The ACCC has reported on a number of issues with Harvey Norman's Product Care, and previously accepted a court enforceable undertaking from the Harvey Norman group of companies. The ACCC identified issues with selling practices and potentially misleading conduct regarding the degree of overlap with consumers' existing rights under the Australian Consumer Law. The class action alleges Harvey Norman engaged in misleading or deceptive conduct, and unconscionable conduct when selling products which had minimal or no value.
Echo Law is seeking to recover compensation for customers who purchased Product Care at any time since 17 September 2018 at a Harvey Norman, Domayne or Joyce Mayne store, including a refund of the money customers paid for Product Care and interest.
The litigation is supported by experienced Australian litigation funder, CASL.
"This case is an example of how class actions are an important enforcement mechanism for Australia's consumer protection laws. CASL is proud to support Echo Law's work to seek remedies for consumers who were allegedly sold junk extended warranties", Siobhan Moore, CASL Senior Litigation Manager said. Harvey Norman,
