Harvey Norman store fined $52k for misleading customers

The Federal Court has ordered a Harvey Norman franchisee to pay $52,000 for misleading consumers about their consumer rights.

The store in Bundall, Queensland – which was owned by now-defunct company Bunavit Ltd – faced proceedings by the Australian Competition and Consumer Commission (ACCC). In its heyday, Bunavit employed 147 people and had 2013 sales revenue of $69 million, but closed down in February 2015.

ACCC brought the proceedings against Bunavit after five of the store's sales reps made 10 false or misleading representations about guarantee rights. Bunavit has 28 days from the order of the judgment, dated 12 January, to pay up.

This judgement was brought upon Bunavit after store employees gave two customers a series of false or misleading representations about their consumer rights.

This is not the first time a Harvey Norman franchisee has taken the heat for misleading consumers. Since 2012, the ACCC has obtained penalty orders totalling $286,000 against 10 Harvey Norman franchisees due to false or misleading representations regarding consumer guarantees.

In imposing the $52,000 penalty against the Bundall store, Justice Dowsett took into account that there were more impugned statements than in the other comparable cases, that the conduct had continued over a longer period, that more staff members were involved and that Bunavit’s turnover and profit were substantially higher than those of other offending companies. However, the judge conceded that none of Bunavit’s senior staff had been involved.

ACCC acting chairman Dr Michael Schaper said: “Products sold in Australia come with a consumer guarantee under the Australian Consumer Law that they will be of acceptable quality. Faulty products must be repaired, replaced or a refund must be provided by the retailer. This penalty is a timely reminder to all businesses, whether large or small, that they must not mislead consumers about consumer guarantee rights under the Australian Consumer Law.”

The Federal Court declined to make declaration as it considered the penalties were sufficient to address the conduct. It also declined to order injunctions because Bunavit has ceased trading.