ACCC fines Apple $9 million for misleading customers

apple storeTech giant Apple has been ordered to pay $9 million in penalties for misleading customers with warranty claims.

The Australian Competition and Consumer Commission (ACCC) took action against Apple US and Apple Pty Ltd (Apple Australia) following an investigation of complaints relating to ‘error 53’, which disabled some iPhones and iPads after users downloaded an update to iOS – Apple’s mobile operating system.

At least 275 Australian customers were told they were no longer eligible for a remedy if their device had been repaired by a third party, something the ACCC takes issue with.

“If a product is faulty, customers are legally entitled to a repair or a replacement under the Australian Consumer Law, and sometimes even a refund,” said ACCC commissioner Sarah Court.

“Apple’s representations led customers to believe they’d been denied a remedy for their faulty device because they used a third party repairer.

“The court declared the mere fact that an iPhone or iPad had been repaired by someone other that Apple did not, and could not, result in the consumer guarantees ceasing to apply, or the consumer’s right to a remedy being extinguished.”

Once notified about the investigation, Apple reached out to approximately 5000 customers who were affected by ‘error 53’ in order to compensate them.

Apple Australia also offered to undertake improved staff training, audit information about warranties and the ACL on its website, and improve its systems and procedures to ensure future compliance with the ACL.

“If people buy an iPhone or iPad from Apple and it suffers a major failure, they are entitled to a refund. If customers would prefer a replacement, they are entitled to a new device as opposed to a refurbished, if one is available,” Court said.

Apple committed to providing new units as replacements in those circumstances should the customer request one.

The tech company was recently warned by the Commerce Commission of New Zealand for misleading customers about the date of expiry of a device’s warranty.

“Although businesses may form a view about how long a product should generally last, they must assess each reported fault on its own merits,” said commissioner Anna Rawlings, “they should not base decisions solely on how long a consumer has owned a product.

“The reasonable lifespan of a product will depend very much on what the product is.”

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