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

More about Australian Competition and Consumer CommissionAustralian Competition and Consumer CommissionTechnology

29 Comments

Cracker

1

Anyone that buys from MSY deserves what they get, you dont get the stuff that cheap without cutting corners. I have been in the industry for 20 years and MSY are not the first nor the last to do this sort of thing.

Ben

2

I deserve what I get, when I buy exactly the same box with the same product as anywhere else, but for less money? I deserve what I get because they only charge $2 for a 10c cable when your average store, if they have them, charges $5?

All they did was try to not get involved in customers and their RMA disputes. A fair point as they are a high volume business who doesn't spend a cent on anything.

However I have never been dissatisfied with their customer service because I HAVE NO EXPECTATION they will ever provide any at all. I feel lucky when I get some broken English, above the standard grunting.

Cracker you sound like a disgruntled (ex?) competitor. Discounting is hardly unique to hardware resellers. MSY are different because they have been one of the few businesses that have remained bricks'n'mortar only (up til recently anyway), at least thank them for that.

twig

3

They're the Aldi of computing.
You'll get no customer service but great prices.

phil

4

Cracker, you are ignorant. MSY sells EXACTLY the same brands as everywhere else.
Maybe you should stick to data entry...

shane

5

Any retard that cant handle their own RMA shouldn't be buying tech gear in the first place. If you cant pick up the phone and call a manufacturer/distributor to organise an RMA, you probably aren't capable of installing the very cheap RAM you just bought. Go to Harvey Norman and pay 90% more, whilst you're at it, get an extended warranty.
The problem is that consumers expect way too much these days and the ACCC support these morons. If you don't like the warranty conditions stipulated by the merchant, then don't buy the product, its pretty simple...

Bill

6

Shane, just need to fix up some of your grammar there.

Any retard that can't handle their customers' RMA shouldn't be selling tech gear in the first place. If you cant pick up the phone and call a manufacturer/distributor to organise an RMA, you probably aren't capable of understanding that we have laws that govern consumer warranties.
The problem is that rateilers try and get away with way too much these days and, luckily, the ACCC goes after these morons. If you don't like the consumer protections stipulated by Australian legilsation, then don't sell the product, its pretty simple...

bigmoe

7

they wouldve saved themselves a whole lot of money if they didnt say anything and directed the customer to deal with the distro / company direct if asked.. still, its the RETAILER'S responsibility when it comes to the crunch, not the consumer's.

as posted above, you dont get discounted gear without cutting corners somewhere.. MSY, good if you know what you want and how to play the warranty game yourself.

Alex

8

Correct, MSY are very cheap with no customer service which is an advantage for some people and a deterrent for others. Regardless of their marketing tactics, claiming you don't honour warranties is illegal. Doesn't matter how much of a moron the customer or retailer is.

Will

9

I have had...
3 out of 3 successful returns as actual swaps to MSY, had to explain everything though and it was the Malvern branch years ago.

Scorptec is best, they have a separate department for returns and cover the costs.

0 out of 1 to PCCG (the fault was found close to the day of delivery too). PCCG should be investigated, don't know what it is like now but when they were online only they were nasty people on the phone. Never been back.

Also had fails with other online only companies.

barry

10

Had some really bad experiences with msy... their model of business is, here is your product, give us money and get lost.

At Auburn branch these jerks thought they had legal rights to lock down the place with customers still in it as they approached close time. There were about 40 people inside with hardly any room to stand in. Clearly this is a fire hazard and it just isn't the way business is done in Australia.

I have also witnessed many customers harassed on their way out of the store, having their bags checked even though the bags were the ones they picked up from msy. The people checking seem to be blocking the door, but they have no security identification nor qualifications. As one would expect I have seen some near fights break out.

I say good on ACCC for finally identifying a dodgy business and going after them. I wish they got hit a lot harder. Also to those thinking but their prices are great, I understand your point but please recognise that even if you are willing to have your consumer rights tramped on for the sake of a discount this is still not acceptable practice for any business in Australia.

They should either to learn act like a responsible seller or close shop.

zillah

11

Their customer service are s,,,, but their prices are great.

Have you noticed why their customer service like that ??? Because of the quality of people they are hiring.

Those people don't know nothing about customer service, not even at MSY ,,,,any other retailers they are same

zillah

12

>>their model of business is, here is your product, give us money and get lost.<<
Yes I do agree with that

Ado

13

"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..."
So, I take this to mean that after 5 years, MSY does not have to refrain from making false or misleading representations etc...
I didn't realise that in Australia there was a statute of limitations on obeying the law.

Ado

14

Oops...I meant 'restrain'.

PG

15

Price is no excuse for ripping people off.

I took back an internal sata3 hardrive which had the L section broken. All I got from MSY was that there supplier wouldn't take it back and so they wouldn't get reimbursed
Again, Supply agreements are not the customers problem.

A product regardless of price still needs to be fit for purpose
No excuses

leo

16

i got the same problem i got a 2tbite hard drive opened the plastic and the small L shaped section was broken split in half nearly it was hatashi the spelling is wrong but you know what i nean and they think i broke it and did not give me one in replace just a big argument but it did work and i still got it

CHRIS

17

MSY Tech - Plympton SA ,
Keep on doing what you are doing as I have been purchasing products from MSY Tech - Plympton, South Australia for many years and to date have had no problems at all.
If a part I was after they would recommend the next best item available.
I found that the customer service was fine and they answered all my questions perfectly.
I have now educated myself on the internet about the best products needed for my Son's computers and even an old bloke like me can do this!!!
My Son's are studying I.T. and are into intense gaming and we update out computers yearly and if we had to purchase parts from the computer stores this would not happen so we purchase parts for our computers solely from MSY Tech - Plympton. SA.
I have used the big store front computer stores have been let me down in every way.
Their customer service SUCKS!!!!!
I hope that MSY Tech opens a store at Seaford, South Australia soon as I travel 40Km's to my nearest store.

justinol

18

i have been buying from MSY since 2005. best prices by far. Good even when compared to international prices. only now are some other retailers getting the idea that consumers are smart enough to price compare.

still most other Australian stores like to rip consumers a new one with really high prices.

the products are just the same as available elsewhere, just they cost less at MSY.

why would i pay more?

Rod

19

Hmm, u guys not heard of the 'grey' market in electronic goods?

There may be another reason why these goods are cheap and MSY don't want to offer proper warranty.

If MSY actually followed the normal business rules thru their entire supply chain like most other business their prices would be higher and they could offer proper warranties. I can't say for certain what they do, so I have to be careful about what I say.

They buy cheap from who knows where and pass on the 'savings' by offering lower prices to Australian consumers.

Why should other retailers stoop to their level of shoody business practices to stay in business?? Some people are just greedy and happy to pay a few dollars less from unscrupulous business people. I think they deserve each other and neither party should be able to complain to the ACCC or whoever. If you don't like the warranties don't buy from them.

I'd argue that with prices they charge there is no reasonable expectation that the goods can be fit for purpose. Best of luck if it works, if not. try again with a reputable seller.

Davo

20

I have been buying from MSY for a long time because they are cheap. I have not had a high expectation of service.

However, I have to say that this year, on at least 3 occasions, I have returned faulty components (video cards, MB) and have had no problems getting them replaced. Best case (Underwood), they just swapped the part over on the spot. Worst case was a video card that they said they would test ... and called back the next day to say it was faulty and would be replaced.

In my opinion, MSY have significantly improved as a result of this court action. It is in their best business interest to maintain a reasonable balance between prices and service.

peter

21

did you know the poor staff at MSY get paid less than the kids working at maccas!!! no wonder they don't care about you... think about it.. if you were paid peanuts... would you bother performing in your job??

gaz

22

Adelaide CBD brach is where I go for all of my parts, That and a compy store called PC DiY in Msy's old shop front on franklin, I mean the layout is more like that of a ware house, hard to beat thier savings and all of the store clerks in Msy Tech and PC DiY are super friendly and know thier stuff, I remember about a month ago I went in to buy my friend a gift (gaming keyborad) and ended up talking about hardware with one of the msy guys on his lunch break for about half an hour.

GM

23

Regardless of the outcome MSY were badly advised by their lawers and should sue them for damages. Personally I have never had problems with MSY or their rock-bottom prices. The ACCC and the new legislation simply adds an extra burden (cost) onto all retailers which simply gets passed onto the customer (the user pays principle)... Also overseas suppliers/manufactures mostly only allow a 2% failure rate which is reflected in the price they sell to the importer... Under the new comsumer protection, retailers must replace or refund then battle with the supplier/manufacturer to get it replaced or repaired (which never happens). The most efficient way for discounters to handle returns is to instantly replace the item and add 10% to all their prices to cover their arse... But then I'll have to pay more for my computer gear... But for now I enjoy their cheap prices and the way MSY has shaken up the greedy retailers... Give me fortune cookies any day.

Paul Krueger

24

I shop at MSY Morningside and I have had no problems in returning faulty goods. The staff have been patient and VERY helpfull, going beyond my expectations. I have found them quite a bit better then Umart (in terms of messing me around), and far far far better then Game Dude (where most people would never return after their first encounter with a problem).

Perhaps the more skilled user has reasonable expectations?

The pixel problems with monitors seems to be identical to that which I have seen at many sellers...

Perhaps it is a training problem, in that stores which were fortunate to have employed staff with excellent prior knoledge have these glowing reviews, while others have suffered poor reviews due to the errors made by untrained staff.

Andrew Kenna

25

I've purchased from MSY at Fyshwick and they have to be the worst ever. I've worked in varying roles within IT for over 10 years, even worked for some places that were not popular with customers but msy even beats those types of places with their complete contempt for customers and lack of Service.

Colin

26

Yup, they deserve it and I stopped going there years ago. If you look around there are others retailers who do almost as good a price. Try CPL or even better Centrecom in Melbourne.

quarkcypher

27

I have been buying components from MSY for ten years and I have not had any problems with them. Computer enthusiasts aren't concerned with service as we know what we want anyway. Price is the driving factor and MSY are certainly cheap. I don't support avaricious retailers like Harvey Norman as they charge extortionate prices for their goods. I am certain MSY's misadventure with the ACCC was caused by ignorance and not by intent.

Andrew

28

I am amazed at the amount of MSY employee comments here! I have had nothing but warranty problems with them. I was misled about a warranty issue on some video cards and by the time I found out the warranty was extended and that MSY should have taken them back, the warranty period ran out. They have also refused to replace faulty memory sticks that do not preform at the rated transfer speeds (actual speed rating is 3 times less than rated).
As to customer service, yes there is a complete lack of, depending on which store that you visit. And yes, a lot of their goods are grey market or copies. But for those that are not, they should, and must offer warranty, back and support for those products which THEY SELL and make money off, so THEY are responsible for the service of the products. But they don't. I shop else where now. Vote with your wallet. Oh, and spelling nazi's, read the story, not the words.

Tom Brown

29

I buy a little from MSY.
I do not use them for service or support.
The complaints above mainly if not all stem from the people making the complaints. People often feel that warranty covers everything eg damage to an item, loss of their data thier misuse or not understanding the requirements or the engineering. For example Seagate will not warranty a hard drive that has been visibly damaged or marked by an indelible pen or other marking that cannot be removed.
I would be happy if my customers bought directly from MSY, Megabuy Umart etc. They will still come to me if it does not work or if it needs installing. But they do not understand how much servicing that warranty will cost in real terms.

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