No refund policy costs local business $10,000

Geraldton business Fone Fix and its Director have been ordered to pay a total of $10,000 for three charges of breaching the Australian Consumer Law (ACL). The company failed to provide a customer with information about their right to return a faulty item on two occasions and misled the customer on their right to get a refund.

In this case, a customer purchased an iPhone then reported it was difficult to hear caller’s voices and the phone was replaced with another similarly faulty phone.  When the customer requested a refund, they were told they did not have a right to one because the company’s warranty only covered replacement or repair. Additionally, they were not given any information at any time about their rights under the ACL.

Agrilube Fluid Management Pty Ltd, trading as Fone Fix, was fined $4,000 with an additional $2,000 in court costs.  The business’ Director, who was also the salesperson, received a $2,000 fine and was ordered to pay $2,000 in costs. The Court also ordered that the company pay $506 to the consumer involved as restitution to cover the money which should have been refunded.

Senior Regional Officer for Consumer Protection, Danni Bloomfield, said that regardless of any warranties that traders may offer voluntarily, consumers must be notified of their rights under the ACL.

“If a business gives to a consumer a document, such as a tax invoice which sets out a warranty against defects, the ACL requires that the document must include a prescribed notice that tells consumers about their rights under the ACL.  This ensures there is a balance in bargaining power between consumers and traders,” Miss Bloomfield said.

“If a trader tells a consumer, at the point of sale, that they can only get a repair or exchange if the good is defective, but fails to advise of other rights that exist under the ACL, then the consumer is left with the impression that the trader is simply adding value to the purchase by volunteering to fix a defective product.

“In fact, the trader is obliged under the legislation to address problems if goods are not fit for the purpose for which they are sold; or are not of an acceptable quality.  Consumer Protection had previously tried to resolve the complaint on behalf of the consumer to no avail”.

Anyone who needs further information and advice on returns and refunds, can contact Danni Bloomfield on 1300 30 40 54 or 0899 209800. Alternatively you can call into see her at Shop 3, 50-52 Durlacher Street, Geraldton or email