The Australian Competition and Consumer Commission (ACCC) has accepted court enforceable undertakings from companies part of Harvey Norman, following following an industry-wide review of extended warranty selling practices.

Domestic & General Services provides administrative, claims management and other services to retailers who sell extended warranties to consumers in conjunction with electronics, domestic appliances and white goods.

Yoogalu is a wholly owned subsidiary of Harvey Norman Holdings Limited. Yoogalu was involved in planning, designing and creating the extended warranty program sold at stores branded with the trade marks Harvey Norman, Domayne and Joyce Mayne.

“The ACCC has been concerned with the conduct of some retailers overstating the benefits of buying an extended warranty, when consumers have the free protection of consumer guarantees under the Australian Consumer Law (ACL),” ACCC Commissioner Sarah Court said.

The undertakings require each of Domestic & General Services and Yoogalu to engage with retailers to revise extended warranty brochures to include additional information to assist consumers in comparing the features of the extended warranty being sold with the existing remedies available under the ACL; provide ACL compliance training to those retailers; and develop and implement a program for monitoring retailers’ extended warranty selling practices, including by mystery shopping, and if necessary take  action to improve those practices.

As a result of the undertakings, all major Australian retailers who offer extended warranties to consumers of electronics, domestic appliances and white goods will receive compliance training and have their selling practices monitored.

“The actions required by these undertakings will improve selling practices in the industry and provide greater transparency into what consumers are being told by retailers when they are offered extended warranties,” Court said.

The undertakings also require regular reports to the ACCC in relation to the implementation of these obligations.

The ACCC said it is concerned about marketing practices that have occurred in the extended warranty industry, including the content of extended warranty plan brochures provided to consumers at the point of sale.

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