Full Court finds LG made misleading representations

27 June 2018

The Full Federal Court has partially upheld an appeal by the ACCC against an earlier judgment dismissing the ACCC’s case against LG Electronics Australia Pty Ltd (LG).

The Full Court found that LG made two representations to consumers that were false, overturning the initial court decision, but dismissed the ACCC’s appeal in respect of other LG statements made to consumers.

In the circumstances where the Full Court held that LG had made a false representation, LG had in effect represented that no rights other than those under LG’s manufacturer’s warranty existed.  This was false because consumers who have purchased faulty products may have rights under the Australian Consumer Law consumer guarantees. 

“When consumers buy products, they come with a consumer guarantee under the Australian Consumer Law that they will be of acceptable quality. Manufacturer’s warranties exist in addition to the consumer guarantee rights,” ACCC Commissioner Sarah Court said.

“Consumers will often still be entitled under the consumer guarantee to a repair, refund or replacement when the manufacturer’s warranty does not apply or has come to an end,” Ms Court said.

The Full Court noted that LG’s training of staff not to mention the ACL unless it was raised specifically by a consumer risked LG making false or misleading representations, as it is a short distance from this to effectively denying the existence of the ACL consumer guarantees altogether.

“The ACCC welcomes the Court’s decision, which should serve as a warning to businesses they run a risk if they choose not to mention the ACL consumer guarantees to customers,” Ms Court said.

“The ACCC will continue to take action where we believe that customers have been misled about their consumer guarantee rights.”

Background:

Further information on consumer guarantees is here.

The ACCC instituted proceedings against LG in December 2015 alleging, in relation to complaints about defects with its televisions, LG misrepresented to consumers, retailers or repairers that:

  • the remedies available to consumers were limited to the LG manufacturer’s warranty;
  • where the defect occurred after the LG manufacturer’s warranty had expired:
    • the consumer was only entitled to a remedy if the consumer paid for the costs of assessing the failure; and/or
    • LG had no further obligations, and any step it took in relation to the television was an act of goodwill; and/or
    • the consumer was only entitled to have the television repaired (and not to a refund or a replacement); and/or
    • the consumer was liable for the labour costs of the repair.

The ACCC’s case was dismissed at first instance in September 2017.

Release number: 
119/18
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