ACCC loses case against LG over customer repairs

Table of Contents

Share at:

Imagine buying a product that inherently has a defect. Is it right for companies to continue charging customers for repairs even after the expiration of the warranty period? This issue is explored in the following excerpt regarding the case of TV manufacturing giant, LG.

Making sure that you have the right warranty, refund and replacement policy for your product is essential to avoid scrutiny down the track. It is always recommended that you seek professional advice with a business lawyer when it comes to drafting policies relating to consumer rights.

Background

On December 2015, ACCC launched a class-action case against LG for an alleged misleading conduct. LG was accused of luring customers into believing that they had no option but to pay for repairs after the expiration of the manufacturer’s warranty. Under Australian Consumer Law (ACL), customers who buy faulty products were entitled to a full refund, replacement and and/or repair at no cost, as per the Consumer guarantee. This guarantee is not limited by and should remain effective even after the manufacturer’s warranty expiration.

Court Decision

The issue at hand at the Federal Court of Australia was whether LG had led customers into believing that they had no option but to pay for repairs. In support of their case, the ACCC put forward examples of agreements made by customers to pay for LG repair parts and labour, which is in contravention of ACL consumer guarantees.

Justice John Middleton however, held that there was no misleading conduct. He said that in every instance, LG merely made an offer and that offer was accepted by the customer.

“LG was entitled to so conduct itself,” Justice Middleton said. “There is no allegation in this proceeding of bad faith, deliberate falsehood going to ultimate liability, or other unconscionable conduct.”

He continues: “Unless there is placed upon LG some additional obligation to disclose the existence of the (ACL), which may or may not have provided a remedy which (the customer) may have wanted to pursue, I cannot conclude the conduct of LG was in contravention of the ACL.”

ACCC also attempted to attack LG on their website layout and positioning of the manufacturing warranty. They argued that that the text was misleading because it was too “small and closely spaced text” such that it was hard for consumers to read.

Justice Middleton rejected this allegation, saying that LG has no obligation to inform customers of their rights and that it was ‘obvious’ to customers that the information was there to provide information about LG’s warranty.

Further Actions?

Delia Rickard, the Deputy Chairman of the ACCC is ‘carefully considering the judgment’ and weighing the decision to appeal the judgment. The ACCC remains concerned that customers would continue to be misled and therefore be deprived of the appropriate remedies.

Final Thoughts

To reiterate, ensuring that you observe the consumer guarantees in the Australian Consumer Law is very important to avoid scrutiny and potential legal costs down the line. It begins with you asking whether your product is of reasonable quality and free of potential defects especially from a customer standpoint. Then it is about ensuring that your warranty, replacement and refund policies are fair and in compliance with the law.

If you need to draft a refund or replacement policy or any consumer rights policy for that matter, we recommend seeking professional advice. Lawpath has a marketplace of 750+ business lawyers that specialise in Business and Consumer Law.

Let us know your thoughts on the LG-ACCC lawsuit by tagging us at @lawpath or #lawpath.

Share at:

Simplify creating legal documents today

Browse through Lawpath's AI tools which can be used to draft, review and refine legal documents today!

Related Articles

When Should I Lodge a Caveat? (2026 Update)

A caveat is a legal document which notifies others of your interest in a piece of land. Find out when caveats are used in this article.

What Is A Company? (2026 Update)

Find out what a company is and whether this might be the company structure for you.

What Is a Company Limited by Guarantee? (2026 Update)

What is a company limited by guarantee? Read this article to learn what they are and how these companies are used.

Reducing an Employee’s Pay: What You Need to Know (2026 Update)

If you're considering reducing an employee's salary. Check out this article for how to do this legally.

Do Employees Have to be Paid for Being On-call? (2026 Update)

Some professions require employees to be available outside of ordinary work hours. Find out if employees should be paid for being on-call here.

5 Legal Requirements When Starting a Sports Club (2026 Update)

When starting a sports club, there are some legal issues you need to consider. Find out the legal requirements for setting up a sports club here.