Australian electronic retail giant JB Hi-Fi is facing a class-action lawsuit after consumers were allegedly ripped off by “junk” extended warranties sold by the company for more than a decade.
In what is being described as a “first of its kind” class action from law firm Maurice Blackburn, the case alleges extended warranties offered by JB Hi-Fi over the last decade were of negligible value to customers.
This is because the company’s extended warranties allegedly offered the same rights as what consumers are already entitled to at no cost under Australian Consumer Law.
“The class action alleges that these extended warranties had little to no value to JB Hi-Fi’s customers,” wrote Maurice Blackburn.
“The Australian Consumer Law already gives them the same (and often better) rights to have their goods repaired, replaced, or refunded if they are faulty, without paying for an extended warranty.”
While shoppers and consumer advocates have long questioned the value of JB Hi-Fi’s extended warranties, the lawsuit which was lodged in the Supreme Court of Victoria on Friday will officially seek compensation for those who took out extended warranties when buying consumer electronics, home appliances and home entertainment products.
Maurice Blackburn says the JB Hi-Fi Class Action can apply for those who purchased an extended warranty – also known as “Customer Care”, “Extended Care” and “Extra Care” plans – from JB Hi-Fi in-store or online in Australia any time between 1 January 2011 and 8 December 2023.
In a statement emailed to Information Age, a JB Hi-Fi spokesperson said the company “intends to vigorously defend the proceedings”.
“JB Hi-Fi takes compliance with its legal obligations very seriously and considers that it has complied with relevant laws at all times,” the spokesperson said.
Show me the money
The law firm has not specified precisely how much compensation money participants can expect to receive, but has suggested it is likely to be “different from person to person” depending on the number and price of extended warranties they purchased.
According to Maurice Blackburn, the class action follows a 2023 survey which found 32 per cent of consumers had bought extended warranties at one time or another, often after being pressured by “aggressive sales techniques”.
The class action further alleges JB Hi-Fi – which reached $6.5 billion in sales at Australian stores last financial year – used misleading or deceptive conduct, or unconscionable conduct, in selling the extended warranties.
It further alleges this conduct included telling customers, either directly or through implication, that the extended warranties operated for longer than rights under Australian Consumer Law, provided benefits which the consumer law did not, and were actually “of value” to customers.
“JB Hi-Fi also failed to give customers important information about their rights under the Australian Consumer Law, which they needed to make a properly informed decision about whether to buy an extended warranty,” wrote Maurice Blackburn.
“The class action also alleges that for all of these reasons, the JB Hi-Fi customers bought the extended warranties on the basis of a mistake about their value.”
Miranda Nagy, principal at Maurice Blackburn, described the warranties raised in the class action as little more than a “junk add-on” to purchases.
“JB’s extended warranties expire just three to six years after purchase, but they add substantially to the cost,” said Nagy.
“Our case alleges they added nothing meaningful to the strong rights for repair, replacement or refund under the Australian Consumer Law rights that consumers already enjoy.”
In an FAQ for the class action, Maurice Blackburn emphasised the case could typically take between two and four years to resolve, with the length of the JB Hi-Fi class action depending on many factors, including how the retailer responds.