HP disputes extent of consumer deception in warranty case

'There is no evidence to establish the extent of the damage done to consumers and on how many people were affected' by HP's misleading claims about what its product warranties covered, according to the vendor's legal team.

HP Australia has admitted that it broke Australian consumer law by making misleading claims about the warranty on its products, but the vendor argued that it wasn't as big of a problem as the Australian Competition and Consumer Commission (ACCC) made it out to be.

The ACCC initiated court proceedings against the IT vendor in October 2012 for allegedly making false or misleading claims to customers about HP product warranties and what they cover. According to the consumer watchdog, HP Australia also made retailers think that the vendor wouldn't compensate them for product refunds or replacements to customers without the advanced approval.

A resolution was reached between the two parties in terms of what HP Australia did wrong and how much the company should pay up for misleading consumers, though the figure wasn't mentioned in court today. A statement of agreed facts was submitted by the ACCC, which confirmed that HP Australia representatives did make misleading claims to consumers and retailers about their rights over seeking a refund or replacement for faulty HP goods.

HP admitted that help-desk representatives who made misleading claims were actually following scripts and guidelines provided by the vendor internally.

"The ACCC's concerns were more systemic in nature," the watchdog's legal representative said in court today. "[The evidence] of specific representation indicated a systemic issue [within HP]."

HP's legal representative agreed that it did indeed contravene Australian consumer laws, but argued that the extent of the damage to consumers cannot be measured.

"There is no evidence to establish the extent of the damage done to consumers and on how many people were affected by it," HP's legal counsel said in court.

While HP had revealed to the court the number of customer complaints it received over warranties issued, which the public is not privy to, the company's legal team claimed that the numbers are not indicative of how many consumers were actually affected, because not all of them would have been subjected to misleading statements from help-desk staff.

"It's not admitted that the procedures and guidelines required [to be followed by HP help-desk staff] were made every time a customer called up," HP's legal representative said. "From time to time, staff made representations to the effect that has been set out, but it wasn't in every instance."

He made it clear that HP Australia isn't trying to weasel its way out of paying the agreed amount in damages, but wants to dissuade presiding judge Justice Buchanan from thinking that the agreed amount is too low.

In response, the ACCC highlighted that the customer complaints figures noted in the statement of agreed facts were for calls that escalate beyond the help desk, and would have followed the set HP internal guidelines. Not only that, but the watchdog said it had also received a large number of complaints about HP's warranty issues directly.

But HP's legal representative dismissed those numbers.

"Consumers that made complaints to the ACC would have been unlikely to be misled," he said. "If they had been misled, they wouldn't have thought to complain to the ACCC."

Justice Buchanan will made a brief judgment on this issue in the near future, and applauded both parties for working together to resolve this matter.