HP fined $3 million for misleading customers, retailers

Hewlett-Packard Australia (HP) has been ordered to pay $3 million for misleading customers and retailers regarding consumer guarantee rights.

Last Friday, the Federal Court ordered HP to pay a $3 million civil pecuniary penalty for “making false or misleading representations to customers and retailers regarding consumer guarantee rights”, according to the ACCC.

The ACCC began proceedings against the vendor in October 2012. Since then, the ACCC and HP came to a settlement.

Last week the Federal Court found that HP made several false or misleading representations to consumers about their consumer guarantee rights. These included representations that:

• the remedies available to consumers were limited to the remedies available at HP’s discretion;
• consumers were required to have their product repaired multiple times before they were entitled to a replacement;
• the warranty period for HP products was limited to a specified express warranty period;
• consumers were 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.

The court also found that HP told retailers it was not liable to compensate them if they gave a consumer a refund or replacement, without first obtaining authorisation from HP.

The ACCC said that these representations were made by HP’s call centre staff, who were acting in accordance with HP’s internal guidelines and scripts.

The presiding judge, Justice Buchannan, said that the penalty “reflects an acknowledgment of the seriousness of the respondent’s conduct”.

ACCC Chairman Rod Sims said, “This was an important case to the ACCC. The misconduct was widespread and systemic from a very large multinational firm.

“The ACCC believes that this penalty sends a strong message to all companies, particularly large multinational 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,” Sims said.

The court also ordered HP to set up a consumer redress process for affected consumers.

“If you feel that you have been misled about your consumer rights, you should contact HP,” a statement from the ACCC said.

The court also made orders including declarations, injunctions, public disclosure orders, corrective advertising orders, orders to implement a compliance program and a contribution from HP towards the ACCC’s costs of $200,000.

HP’s response

Also on Friday, HP released a statement detailing its response.

“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,” the statement said.

In the statement, HP said it will:

• review its warranty and support practices against the Australian Consumer Law, and implement a program to monitor compliance;
• provide customer support to assist consumers in resolving concerns with HP products in accordance with the Australian Consumer Law.

“We have also taken steps to adjust our consumer policies and practices and re-train our Printing and Personal Systems team members,” the company said.

HP said it has established a specific consumer redress program, involving a customer contact centre, to help with “past concerns relating to HP-branded desktop computers, notebooks/laptops and printers”.

This customer contact centre can be contacted at:
Email: consumerclaimsau@hp.com
Phone: 1800 625 236 or 02 8934 4357
Post: PO Box 3752 Rhodes NSW 2138