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Noel Leeming fined $200,000 for misleading consumers

Noel Leeming fined $200,000 for misleading consumers

Retailer Noel Leeming Group Limited (Noel Leeming) has today been fined$200,000 for misleading consumers about their rights under the Consumer Guarantees Act (CGA), following a Commerce Commission prosecution.

Noel Leeming was convicted on eight charges under the Fair Trading Act, for making false or misleading representations to consumers about their rights under the CGA.

Each charge relates to a different complainant and the conduct occurred between September 2015 and January 2017 at seven Noel Leeming stores across New Zealand. The complainants purchased consumer goods such as mobile phones, laptops and household appliances.

“This prosecution related to multiple consumers in multiple locations. It was not isolated or ‘one off’ conduct. Consumers complained to Noel Leeming about products and were entitled to have their complaints treated seriously, investigated properly and remedied where appropriate. Instead they were misled – sometimes repeatedly – about their rights under the law, at a moment when it really mattered to consumers that their legal rights were honoured,” said Commissioner Anna Rawlings.

Consumers were misled about:
• the right to seek remedies for faulty goods from Noel Leeming rather than the manufacturer
• the right to a refund for a faulty product
• the right to a replacement for a faulty product.
In sentencing in the Auckland District Court today, Judge Nicola Mathers said there were “direct and significant departures from the truth in every case … consumers were denied their rights and had real difficulty dealing with Noel Leeming.”

One complainant told the court that he got “disruptions, anxiety, stress, [and] the feeling that I was the bad guy because I was inconveniencing them, making their life harder.”

Noel Leeming made misrepresentations such as that:
• claims under the CGA about an iPhone had to be negotiated with Apple directly
• the CGA “is not effective for” Noel Leeming, and a consumer was not entitled to a refund despite false representations made about the suitability of a mobile phone
• a consumer had to contact Microsoft about a faulty product
• Noel Leeming could repair a fridge as many times as it liked; the consumer was also told he could only get a store credit to purchase another fridge
• mobile phones are only replaced within 14 days, and a new phone could only be obtained if a fault occurs three times
“These statements are simply wrong. The CGA entitles consumers to receive a remedy from Noel Leeming, as the supplier. A supplier cannot refuse to deal with its customers and refer them to the manufacturer. The CGA is also clear about the circumstances in which a refund or replacement is available. These statements should not have been made to consumers,” said Ms Rawlings.

Since 2007 the Commission has three times warned or issued compliance advice to Noel Leeming about potentially misleading consumers as to their CGA rights.

Background
Noel Leeming supplies consumer electronics from 77 stores nationwide and via online sales. It is a wholly owned subsidiary of The Warehouse Group Limited.

Consumer advice
The Commission has published this advice for consumers about refunds and returns. It includes episode 9 of our animated series It’s All Good. As Auntie says to Herman after his ‘awesome as’ TV explodes, “this is a substantial fault. You go back to the store Herman … and demand replacement or a refund

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