F&P Appliances subsidiary fined A$200k over misleading warranty claims

The court's decision sends a strong warning to businesses that they must not misrepresent or understate consumers' rights under the Australian Consumer Law when marketing extended warranties

Fisher & Paykel Appliances, the New Zealand whiteware manufacturer owned by China's Haier, has been fined A$200,000 in relation to marketing of extended warranties in Australia.

The Federal Court in Australia today said F&P Appliances subsidiary Fisher & Paykel Customer Services and UK warranty provider Domestic & General Services made false or misleading representations in the course of offering an extended warranty to consumers, and fined each A$200,000, according to a statement from the Australian Competition and Consumer Commission. Justice Michael Wigney said the conduct "unquestionably involves serious and significant contraventions" of Australian Consumer Law and potentially misled thousands of consumers.

The Australian competition watchdog filed proceedings in November 2013, alleging the two companies had sent letters to people who had bought an appliance inviting them to buy an extended warranty, which made false claims about consumer rights, including that the customer wouldn't be protected against repair costs outside the manufacturer's warranty unless they bought the extended cover.

"The court's decision sends a strong warning to businesses that they must not misrepresent or understate consumers' rights under the Australian Consumer Law when marketing extended warranties," ACCC chair Rod Sims said. "This is especially important for companies like Domestic & General which specialise in offering warranty services."

The court also granted injunctions against the companies, ordered each to update their compliance programmes and to contribute to the ACCC's costs.

China's Haier took control of F&P Appliances in 2012 after first buying into the manufacturer in 2009 when the Auckland company sought to strengthen its balance sheet to keep creditors at bay.

(BusinessDesk)