The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking pursuant to section 87B of the Competition and Consumer Act 2010 from Yoogalu Pty Ltd (Yoogalu). This follows the ACCC’s review of extended warranty selling practices and engagement with participants in the extended warranty industry.
Details about the company
Yoogalu is a company incorporated in New South Wales, Australia. It is part of the Harvey Norman group of companies.
Yoogalu was involved in planning, designing and creating ‘Product Care’. ‘Product Care’ is an extended warranty product which consumers can add to purchases of certain electronic goods, domestic appliances or white goods at shopping complexes and online stores branded with the trade marks Harvey Norman, Domayne and Joyce Mayne (Franchisees).
Details about the conduct
The ACCC is concerned about marketing practices that have occurred in the extended warranty industry, including the content of extended warranty plan brochures provided to consumers at the point of sale.
Specifically, the ACCC is concerned about the following practices which have the potential to confuse or in some cases mislead consumers:
Insufficient disclosure of:
the degree of overlap between some contractual rights obtained by purchasing an extended warranty and the rights and remedies already available to consumers under the Australian Consumer Law (ACL), in the event that goods are faulty; and
the contractual rights that go beyond those rights available under the consumer guarantees.
The use of representations to the effect that:
the extended warranty provides some benefits which may overlap with the consumer guarantees – in circumstances where those benefits do overlap;
extended warranty rights are additional to rights and remedies available to consumers under the ACL – in circumstances where those features overlap with those ACL rights and remedies; and
the price of the extended warranty does not include any cost attributable to the rights and remedies available to consumers under the ACL – in circumstances where certain costs may have been for rights that overlap with the rights and remedies already available under the consumer guarantees.
Yoogalu provided the ACCC with a section 87B undertaking that it will:
provide Franchisees with new ‘Product Care’ brochures that include information which will allow a consumer to compare the features of the extended warranty against the rights and remedies available for free under the ACL;
provide to Franchisees ACL compliance training specific to extended warranties; and
continue a program for monitoring and if necessary improving Franchisees’ extended warranties selling practices.