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Netgear hit by ACCC for likely misleading Australians

Yet another American company is caught out telling fibs about Australian law.
Written by Chris Duckett, Contributor on

The Australian Competition and Consumer Commission (ACCC) has gained an undertaking from Netgear to stop telling customers they were not entitled to a remedy for a faulty product unless they had purchased additional warranty.

In a statement released on Tuesday, the ACCC said Netgear had told customers they needed to buy technical support contact or be covered by Netgear's manufacturer's warranty when Australian Consumer Law meant they were entitled to a remedy.

"Netgear admits that it is likely to have misled customers about the remedies they were legally entitled to under the Australian Consumer Law," ACCC Commissioner Sarah Court said. "If a product fails to meet a consumer guarantee, consumers have the right to ask the supplier for a repair, replacement, or refund, and the supplier or manufacturer for compensation.

"Consumer law rights cannot be excluded, restricted or modified. Warranties and technical support contracts operate in addition to consumer guarantees, not instead of these statutory guarantees."

The undertaking stipulates that Netgear will provide full refunds to those who were covered by Australian Consumer Law and purchased a support contact; create an Australian Consumer Rights page on its site within a month; and create a hotline for consumers to determine if they are entitled to a refund.

Netgear will further correct its packaging to comply with Australian law, and establish an Australian Consumer Law compliance program and mystery shopper program.

The ACCC gained a similar undertaking from Belkin late last year, after the electronics manufacturer promoted its products with lifetime warranties, but only recognised the warranty up to five years after purchase. Belkin agreed to honour lifetime warranties for products previously sold, and not sell products with lifetime warranties unless they intend to honour such timeframes, for a period of three years.

In recent months, the ACCC has been cracking down on misleading advertising.

Chairman of the ACCC Rod Sims said in July last year that he expected to take telcos to court over misleading claims on broadband speeds.

"What we want to see is retailers moving away from unhelpful and easily misconstrued claims like 'up to', 'boost', and 'superfast', and from advertising and/or providing information about theoretical maximum speeds that are based on wholesale inputs," he said at the time.

"We want to see consumers presented with information based on the realistic speeds they can expect to experience, particularly during busy periods. Not just best-case scenarios."

In October, the Federal Court hit MSY Technology with AU$750,000 in fines for misrepresenting consumers' rights in regards to faulty products. The court 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.

The following month, the ACCC and Apple were referred to mediation over Apple allegedly misleading customers over fixing faulty devices.

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