The Australian Competition and Consumer Commission has taken action to ensure that online consumers will be better informed about their warranties and returns rights.

“The ACCC is concerned that many online sites misrepresent consumers’ rights and is putting these companies on notice that they are in for special attention,” ACCC chairman, Graeme Samuel, said. “It appears many sites simply cut and paste information from other sites on warranties and refunds without checking that the facts are correct.”

The ACCC is reviewing sites and will be considering action if remedial work is not quickly undertaken, said Samuel, who noted that the ACCC recently raised concerns about the warranties and returns policy published by Auction Alliance Pty Ltd, which trades as Deals Direct (www.DealsDirect.com.au).

The company sells a wide variety of consumer goods including kitchen items, furniture, computers, electronics, jewellery, tools, fitness equipment, alcohol, musical instruments and toys.

The ACCC raised concerns that the warranties and returns policy breached the Trade Practices Act 1974 because it contained misleading and false information about consumers' rights.

The ACCC was concerned about statements to the effect that (a) goods were only warranted by Auction Alliance for 30 days; (b) if Auction Alliance did accept goods for return after 30 days, the consumer was required to pay associated shipping costs; (c) consumers were only entitled to a refund if a replacement product could not be provided by Auction Alliance; and (d) in some cases, Auction Alliance did not provide any warranty and consumers were required to deal directly with the supplier or manufacturer of the product.

The Act provides that consumers have certain statutory rights in respect of goods purchased from a retailer.

For example, if a good is defective the consumer may be entitled to request a refund from the retailer rather than accept an offer of replacement or repair.

Such a right is usually available for a 'reasonable time' after the consumer received the good. A 'reasonable time' depends on the cost and quality of the good.

“Online retailers must recognise that they are subject to the same laws as shop front retailers,” Samuel warned. “Ensuring compliance with the law may involve some costs but in the long run it will reduce the risk of action by the ACCC and will benefit the business by fostering goodwill among their customers.”