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MSY Technology fined AU$750,000 for misleading consumers

The Federal Court has imposed fines of AU$750,000 on MSY Technology after the ACCC took action against it for misleading customers about their rights on faulty products.

The Federal Court of Australia has ordered MSY Technology pay AU$750,000 in fines for misrepresenting consumers' rights in regards to faulty products, the Australian Competition and Consumer Commission (ACCC) has announced.

In addition to the fine, the Federal Court also ordered MSY to undergo an Australian Consumer Law compliance training program; pay the ACCC's legal costs amounting to AU$50,000; and accede to injunctions preventing continuing misrepresentation of consumer rights.

"MSY had misrepresented consumers' rights to a repair, replacement, or a refund where a product developed a fault. Businesses must ensure their refund and returns policies, and any representations accurately reflect their obligations under consumer law," ACCC Deputy Chair Delia Rickard said on Wednesday afternoon.

"These proceedings and the penalties imposed signal to businesses that the ACCC will not hesitate to take appropriate enforcement action where it identifies misleading representations about consumers' rights."

MSY -- which sells computers, parts, accessories, software, and electronic goods in 28 stores across the nation and online -- admitted to making false or misleading representations about consumer rights on its website, and in email and in-store communications with customers.

The ACCC had taken action against MSY in December last year, alleging that between January 2013 and February 2016, MSY had made representations to consumers that it had discretion over whether customers were entitled to a remedy for faulty products, and what remedy it would provide customers with.

MSY had also told customers that it would only provide remedies for products returned within seven days; that it would provide no remedies for faulty software products sold to customers; and that it could require customers to pay administration fees to receive a remedy for out-of-warranty faulty products.

"The ACCC alleges that MSY Technology breached the Australian Consumer Law by misrepresenting consumers' rights to a repair, replacement, or a refund when they have purchased faulty products," ACCC Commissioner Sarah Court said in December.

"Businesses must not mislead consumers about their consumer guarantee rights. Consumers who have purchased a faulty product have a right under the consumer guarantees to remedies which businesses cannot restrict, alter, or remove."

The ACCC had similarly sought the court's help to impose penalties on MSY of AU$203,500 for making misleading consumer warranty representations back in 2012, after bringing action against the company in 2010.

In that case, MSY was found to have been telling customers that it didn't provide warranties for its products, that warranties were only applicable in some circumstances, or that customers needed to buy their warranties.

MSY had also been ordered to undertake a compliance program in 2012.