Harvey Norman is facing a class action for selling “unnecessary and worthless” extended warranties to tens of thousands customers over the past six years.
Echo Law issued the claim in the Federal Court on behalf of Harvey Norman, Domayne and Joyce Mayne customers who were sold the Product Care warranty between September 2018 and today.
It’s estimated the company made hundreds of millions of dollars as a result.
Product Care is an extended warranty sold with products like electronics and whitegoods for added protection in the instance there is a fault with the product.
The warranty costs about 10 to 40 per cent the product price, depending on the item and the length of the coverage.
The class action alleges that the warranty provides no value to customers as it only offers the rights already provided under the Australian Consumer Law.
”We have heard from hundreds of Harvey Norman customers who are furious that they’ve paid thousands of dollars for Product Care over the years and for little or no benefit,” Echo Law senior associate Lauren Meath said.
“They feel like they’ve been tricked.
“Harvey Norman has been making its customers pay extra for rights that they already have for free. It’s a practice that is hugely profitable for the retailer.”
The class action alleges Harvey Norman breached the law with its misleading or deceptive conduct, including unconscionable conduct, by leading customers to believe the extended warranty would give them additional protection.
“In reality Harvey Norman is packaging up the obligations it already has to repair, replace or refund faulty products sold in its stores and is selling this to its customers at a premium,” Meath said.
“Harvey Norman needs to be held accountable, do the right thing, and refund that money with interest.”
The ACCC has previously identified issues with Harvey Norman’s Product Care and its selling practices and potentially misleading conduct regarding the overlap with existing consumer rights.
The class action is seeking to recover compensation for those who purchased Product Care any time since September 17, 2018 at a Harvey Norman, Domayne or Joyce Mayne store, as well as a refund of the money customers paid for Product Care and interest.
9News.com.au Harvey Norman has been contacted for comment.