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Harvey Norman Holdings (ASX HVN) has been hit with a class action over claims that customers were sold extended warranties on electrical goods that were of “little or no value” and already covered by consumer law.
The retailer today revealed that it had received an originating application and statement of claim in relation to the company’s Product Care extended warranty offering which has been sold by franchisees to customers since September 2018.
Under Product Care, customers are offered warranty of between one and three years for computers and one and four years for electrical goods for an additional premium on the purchase price.
The claim against Harvey Norman also includes its wholly owned subsidiary Yoogalu Pty Limited, the company involved in planning, designing and creating the extended warranty program sold at Harvey Norman stores which include Domayne and Joyce Mayne outlets.
The class action is being led by Echo Law which has a number of high-profile cases in train including its most recent against Domino's Pizza Enterprises (ASX: DMP), which is seeking compensation for shareholders who suffered an 18 per cent fall in the share price following a November 2021 market update about its operations in Japan.
Echo Law says it has lodged the class action against Harvey Norman on behalf of consumers who were sold an extended warranty at the time they purchased goods from Harvey Norman, Domayne and Joyce Mayne stores, either in store or online, between 17 September 2018 and 17 September 2024.
The extended warranties under the Product Care brand are sold by Harvey Norman alongside the sale of goods such as televisions, computers and kitchen and laundry products.
“The class action is based on allegations that Product Care offered little or no value, because consumers were already guaranteed the same (or greater) rights under the Australian Consumer Law, for free,” says Echo Law.
“As such, we consider that Harvey Norman consumers who paid for Product Care should be entitled to compensation.”
In a statement to the ASX, Harvey Norman says the proceedings do not specify the amount of compensation being sought, which includes claims for interest and costs.
“HNHL (Harvey Norman Holdings Limited) considers that each of HNHL and Yoogalu has complied with all relevant laws at all times and each intends to defend the proceedings vigorously,” says the company.
“HNHL will update the market in accordance with continuous disclosure obligations.”
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