LG to pay $160,000 for misleading representations to two consumers

6 September 2019

The Federal Court has imposed $160,000 in penalties on LG Electronics Australia Pty Ltd (LG) for making misleading representations to two consumers about their consumer guarantee rights.

In June 2018, the Full Federal Court partially upheld an appeal by the ACCC against an earlier judgment dismissing the ACCC’s case.

The Full Court found that LG made misleading representations to two consumers who believed they had purchased faulty televisions, when it implied on phone calls they had no rights other than those under LG’s manufacturer’s warranties.

Consumers who have purchased faulty products have rights to repair, replacements or refunds under the consumer guarantees in the Australian Consumer Law that cannot be excluded or modified by a company’s warranty or general statements.

“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.”  

Background

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 and was partially upheld by the Full Federal Court in June 2018.

Further information on consumer guarantees can be found at Consumer guarantees

Release number: 
166/19
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