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Misleading consumers costs Harvey Norman $52,000

A Harvey Norman franchisee has been fined AUD$52,000 for making false or misleading representations about consumer guarantee rights.

Bunavit Pty Ltd, which operates the Harvey Norman Superstore Bundall in Queensland, is the latest of ten Harvey Norman franchisees around the country to be penalised by the Federal Court for breaching consumer protection laws.

The Australian Competition and Consumer Commission (ACCC) brought the action against Bunavit for ten false or misleading statements made by store employees to customers about their statutory rights.

One salesperson told a customer whose new computer was malfunctioning, “There’s nothing we can do.” Another customer who had complained about receiving a faulty laptop was informed, “We can’t help you.”

A store employee told her to contact the laptop manufacturer for help instead and that retailer would not pay for a refund or a replacement. The same employee later advised her that they would pay half of the repair costs if she sent it to a third party computer shop.

ACCC Acting Chair Dr Michael Shaper said, “Products sold in Australia come with a consumer guarantee under the Australian Consumer Law that they will be of acceptable quality. Faulty products must be repaired, replaced or a refund must be provided by the retailer.”

Consumer guarantees cannot be limited by the manufacturer’s warranty and any replacement or repair must be provided at no cost to the consumer.

“Business are expected to take appropriate and effective steps to ensure that their staff understand the rights of consumers and the obligations of businesses under the consumer guarantees provided by the Australian Consumer Law,” Dr Shaper said.

The total amount of penalties levied against Harvey Norman franchisees for false and misleading representations about consumer rights to $286,000.

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Sources: ACCC, TimeBase, Sydney Morning Herald 

Bearings manufacturer fined $3m for price fixing

price fixing

Bearings manufacturer NSK Australia has been fined AUD$3 million for price fixing.

The Federal Court imposed the fine after the Australian Competition and Consumer Commission (ACCC) investigated the case.

NSK Australia holds around 10-13% of the $400 million Australia bearings market. Bearings are an essential component in mechanical items, including motor vehicles, mining conveyors, household electrical items and farm machinery.

According to the ACCC, bearings prices were hiked by four per cent in May 2008 and by 10 per cent in February 2009. The price fixing activity primarily affected aftermarket bearings customers – those who purchased bearings for maintenance and repair of motor vehicles, household and industrial machinery.

How it happened
Three senior Japanese executives from NSK Australia, Nachi Australia and Koyo Australia participated in the cartel conduct. They held regular group meetings in Sydney and Melbourne to discuss pricing plans during the nineties. This led to the formation of the Southern Cross Association cartel in 2000. The cartel remained undiscovered for over a decade.

“Cartels cheat customers and other businesses. The ACCC will continue to tackle cartel conduct with the full force of the law,” ACCC Chairman Rod Sims said.

Although the fine imposed on NSK Australia is significant, it reflects a discount that was granted after it cooperated with the ACCC’s investigation. Koyo Australia also faced a $2 million penalty in October last year. Nachi is yet to receive any penalties apart from significant reputational damage.

The Court also ordered NSK Australia to implement a competition and consumer law compliance training program throughout its organisation.

Contact us for more information on our Competition and Consumer Protection online training course.

Source: ACCC, $3 million penalty for bearings cartel conduct