Warranty fail: HP hit with $3 million penalty
The Austrailan consumer watchdog has attacked "widespread and systemic" misconduct within one of the world's largest computer companies after it was forced to pay $3 million for misleading product warranty claims to consumers and retailers.
Computer giant HP was ordered to pay the civil pecuniary penalty by the Federal Court after the Australian Competition and Consumer Commission instituted proceedings against the company in October, when it alleged contraventions of the Australian Consumer Law.
The grievances included remedies available to consumers being only available at HP’s discretion; consumers being required to have their product repaired multiple times before they being entitled to a replacement; the warranty period for HP products being expired; consumers being required to pay for remedies outside the express warranty period; and products purchased online could only be returned to HP at HP’s sole discretion. Subsequently, the ACCC and HP came to an agreed settlement.
On Friday, the Federal Court ordered Hewlett-Packard Australia (HP) to pay the penalty, which also refered to misrepresentations make made by HP staff working at call centres located around the world.
In his judgment, Justice Buchannan stated that the penalty was appropriate and “reflects an acknowledgment of the seriousness of the respondent’s conduct”.
Justice Buchannan noted the Court’s disapproval of HP’s conduct and the need for general and specific deterrence for such behaviour.
“This was an important case to the ACCC. The misconduct was widespread and systemic from a very large multi-national firm,” ACCC Chairman Rod Sims said.
“The ACCC believes that this penalty sends a strong message to all companies, particularly large multi-national companies, that the Australian Consumer Law is not negotiable. This result also shows that the Court is not afraid to impose significant penalties for serious contraventions of the ACL.”
“All businesses operating in Australia require robust mechanisms to comply with the consumer guarantees provisions under the Australian Consumer Law,” Mr Sims said.
In addition to the $3 million penalty, the Court also made other orders including a contribution towards the ACCC’s costs of $200,000, consumer redress, corrective advertising and the implementation of a compliance program.
In a statement, HP Australia said it deeply regretted falling "short" of its service commitment.
”Individual, corporate and government customer satisfaction is the cornerstone of HP’s business. We deeply regret that in the instances identified by the ACCC, HP fell short of our core commitment to high standards of service for Australian consumers who purchased our HP-branded desktop computers, notebooks/laptops and printers and of our duties under Australian consumer laws.
"Through discussions with the ACCC with a view to resolving the legal proceedings brought against HP, HP has voluntarily consented to Federal Court orders. Under the orders, we have committed to, among other things, review our warranty and support practices against the Australian Consumer Law and implement a robust program to monitor and achieve ongoing compliance," the statement said.
Last year the ACCC embarked on a national consumer guarantees awareness raising campaign, "If it’s not right, use your rights. Repair, replace, refund".