Anyone who purchased an extended warranty from JB Hi-Fi between 1 January 2011 and 29 November 2023 is automatically part of the lawsuit lodged with the Victorian Supreme Court last Friday.
It is alleged that the JB Hi-Fi Extra Care Plan (previously known as Extended Care Plan), which offers replacement or repair cover on its range of electronic goods, offers no meaningful guarantee for customers not already covered by consumer guarantees.
The retail giant is alleged to have used misleading or deceptive conduct in selling the warranties, implying the extended warranties operated for longer than consumer guarantees and offered customers additional benefits.
The lawsuit also claims that the retailer didn't give customers enough information about their rights under Australian Consumer Law, which they would have needed to make an informed decision on whether to buy an extended warranty policy.
Principal lawyer Miranda Nagy says consumers deserve a refund for these policies, which can make purchases significantly more expensive.
"These warranties are in most cases little more than a junk add-on to consumers' purchase of the household goods they actually want," she said.
"JB's extended warranties expire just 3-6 years after purchase, but they add substantially to the cost."
On the JB Hi-Fi website, the cost of an Extra Care Repair Cover policy on a Samsung 75" QLED 4K TV (Retail price $2,995) was $449.25, as of 11 December.
What the law says
Australian Consumer Law is set out in Schedule 2 of the Competition and Consumer Act (2010), setting out uninfringeable rights for consumers, that cannot be taken away by anything a business says or does.
When buying a product, a consumer has the right to expect it is the following:
- Of an acceptable quality (meaning it is durable, safe and free from defects)
- Fit for a particular purpose (it must fulfill all the functions the business says it can)
- Match the description given by the business
- Must have the same features as a sample or demonstration model
- Must meet any extra promises made by the business or manufacturer
If a product doesn't meet these basic rights, the business is required to offer consumers a solution, which could be a repair, replacement or a refund depending on the severity of the issue.
These guarantees last for a "reasonable time" after purchase, which depends on the type of product, the cost and how long a reasonable customer would expect the product to last.
In the terms and conditions of the JB Hi-Fi Extra Care policy, it claims the following extra benefits are available under the warranty which are not covered by Australian Consumer Law.
- Certainty as to the exact period of cover
- Convenience of having experienced operational and technical staff to manage the repair/replacement process
- Repair time guarantees
- 'Toll Free' technical assistance
Ms Nagy says this amounts to "nothing meaningful" for consumers on top of the "strong rights for repair, replacement or refund under the Australian Consumer Law."
JB Hi-Fi have released the following statement regarding the lawsuit:
"JB Hi-Fi takes compliance with its legal obligations very seriously and considers that it has complied with relevant laws at all times. JB intends to vigorously defend the proceedings."