A product warranties revamp by Harvey Norman business, Yoogalu, has put the extended warranty selling practices of local tech retailers into focus.
Technology, electronics and homewares retailer, Harvey Norman, via its Yoogalu business, made big changes to its warranty selling practices following an industry-wide review by the Australian competition watchdog.
The Australian Competition and Consumer Commission (ACCC) revealed on 16 May that it had accepted court enforceable undertakings from Yoogalu and claims management company, Domestic & General Services.
"The ACCC has been concerned with the conduct of some retailers overstating the benefits of buying an extended warranty, when consumers have the free protection of consumer guarantees under the Australian Consumer Law (ACL)," ACCC commissioner Sarah Court said.
Yoogalu was involved in planning, designing and creating 'Product Care', an extended warranty product which consumers can add to purchases of certain electronic goods, domestic appliances or white goods at Harvey Norman, Domayne and Joyce Mayne stores.
Domestic & General Services, meanwhile, provides administrative, claims management and other services to retailers that offer their own extended warranty products to consumers who purchase electronics, domestic appliances and white goods.
The undertakings by Domestic & General Services and Yoogalu require each company to engage with retailers and revise extended warranty brochures to include additional information to assist consumers in comparing the features of the extended warranty being sold with the existing remedies available under the ACL.
They also calls for the companies to provide ACL compliance training to those retailers, and develop and implement a program for monitoring retailers' extended warranty selling practices, including by mystery shopping and, if necessary, take action to improve those practices.
According to the ACCC, Domestic & General Services and Yoogalu cooperated voluntarily by offering the undertakings, which follows similar measures agreed with warranty provider, Lumley and Virginia Surety Company Inc.
"As a result of these four undertakings, all major Australian retailers who offer extended warranties to consumers of electronics, domestic appliances and white goods will receive compliance training and have their selling practices monitored," the ACCC said in a statement.
For Court, the actions required by the undertakings will improve selling practices in the industry and provide greater transparency into what consumers are being told by retailers when they are offered extended warranties.
The undertakings also require regular reports to the ACCC in relation to the implementation of these obligations.
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