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· Posted on
September 20, 2024

Harvey Norman faces a class action after its extended warranties are as helpful as an air conditioner in Antarctica

Harvey Norman is now facing a class action lawsuit led by its customers and law firm Echo Law.

What's the key learning?

  • As it turns out, Harvey Norman has been selling a warranty that offers the same protection already provided by law.
  • It was also alleged that Harvey Norman is making their customers pay for a protection they already have.
  • As a result, the company is facing a probable violation of Australian Consumer law which aims to protect Aussie consumers from this type of behaviour.

👉 Background: Harvey Norman is the white goods and home retailer that was founded in 1982. Since then they’ve become a go-to for electronics and furniture in Australia with 192 stores across Australia.

👉 What happened: Harvey Norman is now facing a class action lawsuit led by its customers and law firm Echo Law. The lawsuit alleges that Harvey Norman made hundreds of millions of dollars by selling extended warranties costing anywhere between 10% to 40% of the product price over the past 6 years.

👉 What else: The lawsuit alleges that the extended warranties didn’t actually provide any value to customers because it was already provided under Australian Consumer Law…for free. And they claim this is misleading and deceptive conduct because there isn’t really an extension on their warranty.

What's the key learning?

💡Misleading or deceptive conduct occurs when a company gives consumers false impressions about their products or services.

💡And while Harvey Norman has been stung now, they aren’t the only retailer to fall foul of the Australian Consumer Law. Back in July, the Good Guys were hit with a major fine over their promotions offering store credit that expires within 7-10 days.  

💡For businesses, this is a reminder of the importance of transparency and not over-promising — especially when dealing with legally protected consumer rights.

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