ACCC slams Deals Direct over misleading warranty claims

Deals Direct, one of Australia’s top online retailers, has been forced to give the Australian Competition and Consumer Commission a series of court enforceable undertakings after the watchdog raised concerns over its warranty policies.

And the ACCC has warned other retailers that it will crack down on online traders who do not properly check a products warranty details.

The ACCC raised concerns Deals Direct (whose holding company is called Auction Alliance) over various warranty statements on its site. In some cases, Deals Direct only provided a 30 day warranty, and if it did accept goods for return after 30 days, the consumer was required to pay associated shipping costs.

In other cases, consumers were told they were only entitled to a refund if a replacement product could not be provided and on some products Deals Direct said it did not provide any warranty and consumers were required to deal directly with the supplier or manufacturer of the product.

Under the Trade Practices Act, consumers who purchase a defective good are typically entitled to request a refund rather than accept a replacement product. This right is usually available for a ‘reasonable time’ after the consumer received the product, with the period of a ‘reasonable time’ dependent on the cost and quality of the product.

The ACCC took specific issue with a Pilates workout chair sold by Deals Direct. The e-tailer said the chair was manufactured and warranted by Guthy-Renker Australia when this was not true.

Deals Direct, with has fully cooperated with the watchdog’s investigations, has agreed to write to consumers who purchased the chair offering to either provide a warranty on the same terms as the Guthy-Renker warranty or provide a full refund.

ACCC chairman Graeme Samuel says the case highlights the need for online retailers to lift their game.

“Online retailers must recognise that they are subject to the same laws as shop front retailers,” he said.

“The ACCC is concerned that many online sites misrepresent consumers’ rights and are putting these companies on notice that they are in for special attention. It appears many sites simply ‘cut and paste’ information from other sites on warranties and refunds without checking that the facts are correct.”

“Online traders be warned: the ACCC is reviewing sites and will be considering action if remedial work is not quickly undertaken.”