Mwave "embarrassed" by ACCC warranty notice

Reseller must attend compliance training program.

Mwave directors were "embarrassed" when the competition watchdog told them it was concerned about the online retailer's warranty policies last year, it said.

The Australian Competition and Consumer Commission told Esel Trading directors Victor Lee and Wilson Zhang last June that its Mwave website's warranty and refunds policy contravened the Trade Practices Act.

The commission said Mwave's refusal to exchange, refund or replace opened items breached the Act.

Steve Grant, marketing manager for Mwave told CRN that the policy was put up in "error".

"We've made a c--k up with the wording of it," Grant told CRN.

"We're really sorry and actually embarrassed by this; can we please work with you guys [ACCC] around how exactly this should be worded?"

Grant said the directors were keen to work with the ACCC to rectify an "apparent mistake": "It wasn't actually supposed to read that way, but unfortunately it was".

"It was brought to the attention by the commission and the directors realised it actually could be construed that way," he said.

Grant said Mwave was working with the commission to correct the policies and they've corrected it online.

Commision chairman Graeme Samuel said the consumer watchdog was watching online resellers closely.

"Consumers have the same rights online as if they were to walk into a store," Samuel said.

"Basically, they can expect that a product would have a level of quality and performance that would be reasonable to expect, do what it is meant to do and match its description."

Penalty

The ACCC accepted Mwave's undertakings to fix its concerns.

Mwave must comply with the legal orders for three years:  

• Within the next 21 days, Mwave must publish a corrective notice on its website for 60 days.
• Mwave must write or email customers who have bought a product since July 1, 2007, advising them that they have a right to damages.
• Within 60 days, Mwave must establish a trade practices compliance program and select a compliance officer to attend practical trade practices training.    

Timeline

Extracts of the original policy:

• Mwave Australia makes no representation or express warranty with respect to the product except those stated in this document. Mwave disclaims all other warranties express or implied as to any product, including and without limitation, the implied warranties of merchantability, and fitness for a particular purpose, and any implied warranties arising from statute, trade usage, course of dealing, or cause of performance. 
• No warranty representations - any products, consumables and software - that have been opened are not entitled to a refund, return or exchange.
• The customer is responsible for return shipping.

22 June

The ACCC advised Esel of its concerns

10 July

Esel removes the 'No Warranty Representations' from the Mwave website.

Other Representations

The ACCC was also concerned that by making the 'Other Representations', Esel may have led consumers to believe that: If they bought certain items they will not be entitled to a refund, return or exchange. And if they bought an item that was faulty, misdescribed or not fit for its intended purpose to seek a remedy they wiIl have to pay the shipping costs to return the item to Esel.

6 August

The ACCC wrote to Esel advising it of its concerns.

16 August

Esel responded to the ACCC'S Ietter informing the ACCC that it had removed the Other Representations.

23 Feb

Directors, Victor Lee and Wilson Zhang sign undertakings by ACCC 

15 March

Graeme Samuel, chairman of the ACCC accepts the undertakings.