MSY Technology hit by $200K ACCC fine

Summary:MSY Technology and its four state-based subsidiary companies have been slapped with fines totalling $203,500 by the Australian Competition and Consumer Commission (ACCC), after the company was found guilty by the Federal Court of making false and misleading claims to customers regarding product warranties.

update MSY Technology and its four state-based subsidiary companies have been slapped with fines totalling $203,500 by the Australian Competition and Consumer Commission (ACCC), after the company was found guilty by the Federal Court of making false and misleading claims to customers regarding product warranties.

The case kicked off in November 2010, and saw MSY Technology and its New South Wales, Queensland, South Australian and Western Australian subsidiaries accused of misleading customers about the availability of statutory warranties for products that it sold through its stores.

The court found that MSY Technology had made misleading statements in relation to the warranty rights of consumers. Statements included telling customers that MSY didn't provide warranties for its products, that warranties only applied in certain circumstances and that customers needed to pay a fee to obtain a warranty.

The ACCC appealed a section of the original judgment in the case handed down by Justice Nye Perram last year that saw the court reserve the right to grant the ACCC the declaratory relief that it was after. Justice Perram had made the decision to withhold declarations in the case due to a series of previous rulings. After a lengthy appeal, however, Justices Andrew Greenwood, John Logan and David Yates overturned Justice Perram's original decision, granting declaratory relief to the ACCC on 19 April 2012. This was important in order to inform the public of what the court had ruled, according to ACCC acting chairman Michael Schaper.

"The ACCC considers that a declaration by the court that a person has contravened the Act is an important way to inform the public of illegal conduct by traders," Schaper said.

Justice Perram said in his original judgment that the MSY verdict ought to serve as a warning to any other retailer charging or withholding a customer's right to a warranty.

"It is appropriate that it should be made plain to retailers in the position of companies such as the respondents that misrepresenting to consumers what their warranty rights are is an unacceptable form of commercial conduct, and is illegal.

"It is appropriate, therefore, to encourage retailers not to give consumers the impression either that their statutory rights are curtailed or non-existent, or that warranties can only be obtained through payment," Justice Perram said.

The full bench of the Federal Court found MSY guilty of breaching the Trade Practices Act 1974, and fined the parent MSY Technology $55,000, while the subsidiaries were fined $37,000 (NSW), $18,500 (Qld), $37,000 (SA) and $55,500 (WA), while under instruction to also pay the legal costs of the ACCC.

MSY Technology must also implement a new internal trade practices compliance program, and display corrective advertising in stores and online.

Updated at 11.33am, 26 April 2012: the original judgment that saw MSY fined by the ACCC took place some time before this story was written. An appeal judgment in the case was handed down on 19 April 2012. ZDNet Australia apologises for any confusion caused.

Topics: Legal, Government, Government : AU

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A fresh recruit onto the tech journalism battlefield, Luke Hopewell is eager to see some action. After a tour of duty in the belly of the Telstra beast, he is keen to report big stories on the enterprise beat. Drawing on past experience in radio, print and magazine, he plans to ask all the tough questions you want answered.

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