Online PC reseller MSY Technology was found to have abandoned an ACCC-approved set of terms and conditions as early as 2013, court documents showed.
Last week, MSY was ordered to pay $750,000 in fines to the ACCC for misrepresenting consumers’ rights on remedies for faulty products, six years after getting fined $203,500 for misleading warranty notices.
In response to a letter from ACCC in 2010 about customer complaints, MSY and its lawyers worked together with the regulator to draft amended terms and conditions.
Court documents show that MSY did publish the amended terms and conditions, but these were removed about January 2013.
“MSY says, and the ACCC accepts, that its representative acted without the knowledge or approval of its senior management in replacing the [ACCC-approved] amended terms and conditions with [MSY’s current] terms and conditions,” the court document read.
The offending terms and conditions indicated the limited rights of MSY customers regarding returns and repairs, including the seven-day warranty period and the administrative fee for repairs not covered by the warranty period.
The court was presented with witness evidence of customers requesting refunds or replacements for faulty goods.
One customer tried repeatedly to return faulty RAM to the Ultimo store in Sydney but was given the runaround by store staff and ultimately purchased a replacement product from another supplier.
The Clayton store in Melbourne supplied a second witness with RAM that was different to the product ordered and could not be used, but on attempting to get it replaced, the customer was told MSY "did not give refunds or exchanges after 30 days".
A third witness also had problems with the Clayton store over a faulty hard-drive, and only secured a replacement after escalating the problem to Consumer Affairs Victoria.
Under Australian Consumer Law, a customer can choose a refund or exchange if an item has "a major problem", defined when as item
- has a problem that would have stopped someone from buying the item if they had known about it
- is unsafe
- is significantly different from the sample or description
- doesn’t do what we said it would, or what you asked for and can’t be easily fixed.
MSY only reinstated the ACCC-approved terms and conditions in February 2016, when the regulator issued a notice of investigation against MSY.
MSY admitted its wrongdoing regarding the website misrepresentations.
“In an affidavit affirmed by [MSY general manager Andrew Shiau] he extends an apology on behalf of [MSY] and on his own behalf for the infringing conduct the subject of this proceeding,” court documents read.
“He deposes that he is ‘deeply sorry’ that the conduct took place and accepts the need to work further to ensure compliance.”
Court documents also showed that the ACCC was in constant communication with MSY with regards to continued customer complaints even with the amended terms and conditions and the proceedings in 2011.
In addition to the $750,000 fine, the court also ordered MSY not to publish written statements about its customers' limited rights on any of its websites in the next five years.
It has also been told to publish a copy of the outcome of the proceedings on the reseller’s home page.
MSY was ordered to include a web page detailing their customers’ rights with accordance to the Australian Consumer Law (ACL), with a link on the MSY homepage.
The court also mandated it must establish and implement a compliance and education or training program, which will be in place for three years.
In addition, MSY was ordered to appoint a director or senior manager with suitable qualifications or experience in corporate compliance as a compliance officer, with the responsibility of ensuring the compliance program is “effectively designed, implemented and maintained.”