ACCC hauls LG Electronics to court over misleading statement claims again

The consumer watchdog has commenced proceedings against LG Electronics Australia alleging it was not transparent enough to consumers about their rights surrounding faulty LG products.

LG Electronics Australia has been taken to Federal Court by the Australian Competition and Consumer Commission (ACCC), with the watchdog alleging LG made false or misleading representations to consumers on their rights when it came to faulty LG goods.

The ACCC alleges that in relation to defects with LG's televisions, the tech giant misrepresented to consumers, retailers, and repairers that the remedies available to consumers were limited to the LG manufacturer's warranty.

It is alleged by the ACCC that where the defect occurred in an LG television after the LG manufacturer's warranty had expired, the consumer was only entitled to a remedy if the consumer paid for the costs of assessing the failure.

When a consumer's LG warranty had expired, the ACCC claim that LG asserted it had no further obligations, and any step it took in relation to the television was an act of goodwill. The tech giant is also accused of telling some consumers they were only entitled to have the television repaired and were not entitled to a refund or a replacement, and that the consumer was liable for the labour costs of any repairs.

ACCC Chairman Rod Sims said that when a consumer buys a product that comes with a consumer guarantee under the Australian Consumer Law that it will be of acceptable quality. He said the guarantee is in addition to any express manufacturer's warranty.

"Although the manufacturer's warranty only applies for a specified period of time, consumers will often still be entitled under the consumer guarantee to a repair, refund or replacement after the manufacturer's warranty ends," Sims said.

"The ACCC will not hesitate to take appropriate action against manufacturers who misrepresent consumers' rights and remedies for defective products under the Australian Consumer Law.

"The Australian Parliament has conferred these important rights."

The ACCC said it is currently seeking declarations, injunctions, pecuniary penalties, corrective notices, a trade practices compliance program, and costs. The matter is slated for a Case Management Conference in the Federal Court in Melbourne in February.

Almost a decade ago, LG was found to have been in breach of the consumer protection provisions of the Trade Practices Act 1974 after the Federal Court ruled the electronics giant made false or misleading representations in several of its online mobile telephone user manuals.

At the time, former ACCC chairman Graeme Samuel warned LG against making misleading statements surrounding warranty and the rights of consumers in the future.

"The ACCC will not hesitate to take action against businesses which mislead consumers about their statutory rights," he said at the time. "Consumers can be tricked into thinking that they can't have a faulty item replaced, or get a refund, because the manufacturer's express warranty period has expired, when that may not be so."

Additionally the court ordered LG to refrain from making representations to similar effect in the future; implement an upgraded trade practices compliance program; arrange the publication of consumer notices on its website and in all major Australian newspapers; provide each of its mobile telephones retailers with a notice explaining the relevant provisions of the Act; and pay the ACCC's costs.

In 2012, LG along with Panasonic, Sony, Samsung, and Sharp were given a slap on the wrist by the ACCC.

At the time, the watchdog said the technology giants used the term "Wi-Fi Ready" too loosely and suggested that vendors amend their promotional and marketing material.

"Consumers should be able to trust that what's represented on promotional material is what they will actually get," Sims said previously. "This is particularly the case when the terms 'Wi-Fi Ready' or 'Wireless LAN Ready' appeared to be used on audiovisual products offering in-built Wi-Fi adaptors as well as on products which required an additional device or dongle."

A civil high court in Seoul ruled in October that LG Electronics compensate a researcher 199.5 million won for a number of international patents that the researcher by the surname of Lee was not appropriately compensated for.

The court also ordered LG to officially acknowledge the contributions made by Lee's invention.

Meanwhile, LG Electronics signed partnership agreements last month with South Korean credit card companies KB Kookmin Card and Shinhan Card, in preparation for launching its own mobile payment system, having filed a US trademark application for "LG Pay" in September.