LG has been slapped with a $160,000 fine for misleading two customers.
When the two customers called LG about faulty televisions, representatives told them that if the warranty was expired, then the customers would have to pay for a repair and that anything beyond that would be considered “good will”.
Under Australian Consumer Law, anyone who has purchased a faulty item has the right to a repair, replacement or refund.
This right cannot be modified or limited to a warranty issued by a company.
“Consumer guarantee rights are separate to warranties offered by manufacturers and will always be available to consumers who find they have been sold a faulty product,” ACCC Commissioner Sarah Court said.
“The Court’s decision is a reminder that making misleading statements about consumer guarantee rights, even to only one or two consumers, can result in penalties being imposed.”
The Federal Court handed down the fine after initially dismissing the case in 2017.
Following an appeal from the ACCC, it partially upheld the decision .
A spokesperson from LG told Information Age that despite the hefty fine, the Court understood this situation was not indicative of systemic issues within LG.
“The Court accepted that these were cases of understandable human error that took place in a call centre that received thousands of calls every month and in the context of a complex legal regime,” the spokesperson said.
“LG Australia did not intend to misrepresent the rights that the two individual consumers had under the Australian Consumer Law and remains committed to honouring our obligations at law and providing quality service experiences for our customers.”
When proceedings first began in 2015, ACCC Chairman Rod Sims said consumer law created additional protection for consumers.
“Although the manufacturer’s warranty only applies for a specified period of time, consumers will often still be entitled under the consumer guarantee to a repair, refund or replacement after the manufacturer’s warranty ends,” Sims said.
This latest incident isn’t the first time LG has been called out by the ACCC for misleading consumers.
In 2006, the Federal Court found LG was in breach of the Trade Practices Act. LG had distributed mobile phone user manuals with false and misleading information.
While the Federal Court did not fine the electronics company, it did issue several conditions including that LG must “refrain from making representations to similar effect in the future.”
LG isn’t the only large corporation to be called out for distributing misleading information this year. In July, the ACCC began proceedings against Samsung alleging the company had misled its consumers by advertising a product as waterproof when in reality it was simply water resistant. Samsung Galaxy phones can be submerged in water for 30 minutes and up to depths of 1.5m – any more than that and the phones become damaged.
The ACCC alleges Samsung knowingly mislead consumers and has denied many warranty claims.
A decision is yet to be reached.