Tuesday, 27 February 2018 23:23

ACCC slaps penalties on Netgear over misleading warranties Featured

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ACCC slaps penalties on Netgear over misleading warranties Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Networking equipment manufacturer Netgear has been hit with severe penalties by the Australian Competition and Consumer Commission for issuing warranties which mislead customers over remedies for faulty products.

The action by the ACCC follows Netgear incorrectly telling customers from June 2016 they could not receive a remedy for a faulty product, unless they were covered by Netgear’s manufacturer’s warranty or if they purchased a technical support contract.

The ACCC has penalised Netgear by ordering they provide remedies and refunds to customers who were misled by its warranty and technical support representations.

“Netgear admits that it is likely to have misled customers about the remedies they were legally entitled to under the Australian Consumer Law,” ACCC commissioner Sarah Court said.

“If a product fails to meet a consumer guarantee, consumers have the right to ask the supplier for a repair, replacement or refund, and the supplier or manufacturer for compensation.

“Consumer law rights cannot be excluded, restricted or modified. Warranties and technical support contracts operate in addition to consumer guarantees, not instead of these statutory guarantees,” Court said.

In an undertaking accepted by the ACCC, Netgear has undertaken to:

  • Review all technical support contracts purchased between 1 July 2016 and the date of the undertaking and, where the Netgear product has had a failure and the consumer would have been entitled to an Australian Consumer  Law    ACL)  remedy for free, to provide that remedy as well as a full refund of the price of the technical support contract;
  • Establish an Australian Consumer Rights webpage on its website within one month; and
  • Establish a Consumer Hotline for Australian consumers who contacted Netgear technical support from 1 July 2016 in relation to a product which may have had an ACL failure that the consumer believes Netgear did not sufficiently address, and to review each complaint to determine whether the consumer is entitled to an ACL remedy and/or compensation.

Under the order from the ACCC, details of the Consumer Hotline will be published on Netgear’s website within one month.

The ACCC says Netgear has also acknowledged that some products with warranty representations on the packaging did not include the prescribed wording required by section 102 of the ACL and the Competition and Consumer Regulations 2010, and has undertaken to correct its packaging to comply with the law.

In addition, Netgear has undertaken to update its policies and procedures to ensure clear consideration of Australian consumer rights under the statutory consumer guarantees regime.

Netgear will also establish and implement an ACL compliance programme and mystery shopper programme.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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