Updated: MSY fined $203,500 by Federal Court

The penalty stems from ACCC allegations that the tech reseller made a number of misleading representations about customer warranty rights

Tech reseller, MSY, has been fined $203,500 in penalties by the Federal Court following a court case brought on by the Australian Competition and Consumer Commission (ACCC) over misleading consumer warranty rights.

In early November, the ACCC alleged MSY Technology sold computers, components, software and other tech products to customers, and made a number of false or misleading representations about consumer warranty rights.

The ACCC alleged that by making the representations, MSY and each of its related companies breached sections 52 and 53(g) of the Trade Practices Act 1974.

MSY hired Spranklin McCartnery Lawyers to present their case, the same firm previously hired to prepare its Warranty and Sales Policy.

In Federal Court documents, Justice Perram, said after the commencement of proceedings on October 28, the respondents (MSY) swiftly admitted all of the conduct alleged against them in the Commission’s application, and fully co-operated.

The documents also detailed that from July 28 to October 28, MSY displayed notices at its North Melbourne, Box Hill, Clayton, Pascoe Vale, Cheltenham and Brooklyn stores which contained statements disclaiming or excluding MSY’s responsibility for providing warranties to consumers for certain goods.

Justice Perram said a typical example of the statements involved was: “We are unable to offer refund or exchange for these items”. The notices, price lists and receipts also contained statements which purported to restrict MSY’s warranty obligations to consumers for goods referred to in them.

For example, one of the notices said: “all LCD monitors are cover[ed] against bright pixel defects by our 7 days DOA [dead on arrival] replacement warranty. Less than 3 Black Dead pixels... will not be covered.”

The maximum penalty for each contravention is $1,100,000.

At the time of the institution of the proceedings, MSY did not have any compliance training or educational programmes for staff on compliance with the Trade Practices Act. But since then, adequate programs had been put in place.

Acting ACCC chairman, Michael Schaper, said this outcome serves as a timely reminder that the ACCC will take action against businesses which mislead consumers about their rights.

On top of the penalty handed out, the court has also ordered MSY to restrain for a period of five years from making false or misleading representations about a consumer’s statutory warranty rights; implement a Trade Practices compliance program; display corrective advertising in each of their stores; publish a corrective notice on the MSY Technology website at www.msy.com.au, and pay the ACCC’s costs.

Under the Australian Consumer Law (ACL) amendments, which commenced April 15 last year, the ACCC can seek civil proceedings penalties of up to $1.1 million against corporations and $220, 000 against individuals for a contravention of various consumer protection provisions of the Trade Practices Act (now the Competition and Consumer Act 2010).

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Tags MSYPCconsumer warranty rightsAustralian Competition and Consumer Commission (ACCC) softwareComponentsconsumer protection

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