Apple dinged by consumer watchdog over specious Australian refund, return practices

Posted:
in General Discussion edited January 2014
Apple is once again under scrutiny for its product warranty practices overseas, as a consumer watchdog group in Australia has forced the company to change its refund and return policies to be in line with the country's laws.

AppleCare


According to the Australian Competition and Consumer Commission (ACCC), Apple has been misleading customers about its responsibility to return, replace or refund purchases of product found to be faulty, reports The Sydney Morning Herald.

"The ACCC was concerned that Apple was applying its own warranties and refund policies effectively to the exclusion of the consumer guarantees contained in the Australian Consumer Law," said ACCC chairman Rod Sims. "This undertaking serves as an important reminder to businesses that while voluntary or express warranties can provide services in addition to the consumer guarantee rights of the ACL, they cannot replace or remove those ACL guarantee rights."

In an investigation detailed on its website, the ACCC found Apple was applying its usual 14-day return policy and 12-month standard warranty to items sold in its physical and online stores. In addition, Apple employees were directing customers with malfunctioning or faulty non-Apple products to the original manufacturer.

Customer rights under the Australian Consumer Law, which went into effect in 2011, provides guarantees against faulty products for what is described as a reasonable amount of time based on cost and quality of the item. As such, the guarantees have no set time limit, Sims said.

The ACCC would be able to take Apple to court over the findings, but the company has agreed to an undertaking that calls for a revision of its policies in the region, as well as the retraining of staff to provide proper guidance regarding product warranties. In this case, Apple will institute warranties and return policies that extend up to 24 months after date of purchase and the company acknowledged that some products may be covered beyond that period.

Warranty
Screenshot of Apple's Australian consumer law information webpage. | Source: Apple


Apple will also conduct its own investigation into faulty product claims going back two years starting from Jan. 6, the official date of promised policy change. Over the next 90 days, the company will review returns and seek to remedy any failings as mandated by the ACL.

Finally, Apple will keep a consumer rights information page on its Australian website for a period of two years and keep ACCC consumer rights brochures handy at its brick-and-mortar Apple Stores.

Adding another layer to the issue, Apple had already extended its Australian AppleCare hardware guarantee to two years as of March this year, to bring the terms up to government standards. It was reported at the time that an internal email instructed employees not to discuss the changes with customers, a practice that may have contributed to the ACCC's findings.

Internationally, warranty issues have been an ongoing struggle for Apple. In 2012, the company was fined over $260,000 by the Italian government for offering customers two-year AppleCare warranties rather than the standard free one-year option. Local law requires two years of free protection. The same situation occurred in 2011, when Apple was fined $1.2 million over similar "unfair commercial practices."

Earlier this year, Apple was hit with a complaint from a non-profit consumer advocacy group in Belgium for improperly marketing AppleCare warranties.

A full copy of the Australian undertaking as posted by the ACCC can be found below:

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Comments

  • Reply 1 of 34
    zozmanzozman Posts: 391member
    I used to work at the ACCC, was a good job, good times :)
  • Reply 2 of 34
    hill60hill60 Posts: 6,989member

    Meanwhile Samsung and other phone manufacturers in Australia get away with offering a six month warranty on batteries, as they class them as "accessories".

     

    I wonder why the ACCC isn't looking into that, especially given the large number of Galaxy S4's sold with faulty batteries.

  • Reply 3 of 34
    Like all the "best" laws, difficult to find and randomly applied.

    Looking around on their web site without a provided link, their rules are extremely broad and unspecific. Example:

    "Consumer guarantees on products and services

    Since 1 January 2011, the following consumer guarantees on products and services apply.

    Products must be of acceptable quality, that is:

    safe, lasting, with no faults
    look acceptable
    do all the things someone would normally expect them to do.
    Acceptable quality takes into account what would normally be expected for the type of product and cost.

    Products must also:

    match descriptions made by the salesperson, on packaging and labels, and in promotions or advertising
    match any demonstration model or sample you asked for
    be fit for the purpose the business told you it would be fit for and for any purpose that you made known to the business before purchasing
    come with full title and ownership
    not carry any hidden debts or extra charges
    come with undisturbed possession, so no one has a right to take the goods away or prevent you from using them
    meet any extra promises made about performance, condition and quality, such as life time guarantees and money back offers
    have spare parts and repair facilities available for a reasonable time after purchase unless you were told otherwise.
    Services must:

    be provided with acceptable care and skill or technical knowledge and taking all necessary steps to avoid loss and damage
    be fit for the purpose or give the results that you and the business had agreed to
    be delivered within a reasonable time when there is no agreed end date.
    Consumer guarantees on products and services also apply to:

    bundled products and services
    gifts with proof of purchase
    sale items
    online products and services bought from Australian businesses
    second-hand products from businesses, taking into account age and condition."

    ...That's right. Absolutely no visible or obvious rules that would tip off a business about specifics as mentioned by this agency.

    http://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees#consumer-guarantees-on-products-and-services
  • Reply 4 of 34
    Quote:
    Originally Posted by SpamSandwich View Post



    ...That's right. Absolutely no visible or obvious rules that would tip off a business about specifics as mentioned by this agency.



    http://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees#consumer-guarantees-on-products-and-services

     

    Law's are slightly vague like this to make it harder to get around. The general gist of what you've quotes is just saying you can't con people into paying to much for something that isn't worth it.

     

    In terms of no obvious rules though, what about...

     

    Quote:
    Originally Posted by SpamSandwich View Post



    Products must be of acceptable quality, that is:



    safe, lasting, with no faults

    look acceptable

    do all the things someone would normally expect them to do.

    Acceptable quality takes into account what would normally be expected for the type of product and cost.

     

     

    If I bought a phone with a 2 year contract I would expect "safe, lasting, with no faults" to mean it would last the 2 years. Not if it broke in the second year I would have to pay to have it repaired. If I bought a Mac for £1000 I would also certainly expect it to last longer than a year, probably even longer than 2.

     

    I'm quite surprised Apple are still trying to push these 1 year warranties everywhere. I know they have the brand power to get away with it, and it must save them money. But while the likes of Nokia and HTC give 2 year warranties as standard, Apple in comparison with it's huge profits is continuing to give off the impression it really doesn't care about it's customers. To the extent that it's willing to try and get around laws rather than fix something it made.

  • Reply 5 of 34
    gatorguygatorguy Posts: 20,440member
    "Adding another layer to the issue, Apple had already extended its Australian AppleCare hardware guarantee to two years as of March this year, to bring the terms up to government standards. It was reported at the time that an internal email instructed employees not to discuss the changes with customers, a practice that may have contributed to the ACCC's findings."

    I don't think Apple was unaware of what the ACCC required.

    EDIT: Links to the AI source article aren't always clear even if highlighted in blue.
    http://www.smh.com.au/digital-life/digital-life-news/apple-forced-to-adopt-new-refund-policy-under-australian-consumer-law-20131218-2zkkr.html
    What's pretty surprising is that Apple admits they've misrepresented their consumer obligations and inappropriately applied some Apple policies and procedures per the Scribd doc AI also linked. Good on Apple! No courtroom showdown required.
  • Reply 6 of 34
    saareksaarek Posts: 1,118member

    Apple should offer 2 years cover on their iPads/iPhones and 3 years warranty on their computers as standard. They make a truck load more money than any of their competitors per device sold and should be at the forefront of offering a decent warranty period.

     

    Luckily in Europe and now Australia they are being forced to do the right thing, just a shame it is not standard practice for them.

  • Reply 7 of 34

    I have always thought that Apple should try to lead and set up a world-wide standard three year guarantee.  If they can do it where required by law, then they can do it everywhere, unless they make the machines differently, which I doubt.

  • Reply 8 of 34
    I have always thought that Apple should try to lead and set up a world-wide standard three year guarantee.  If they can do it where required by law, then they can do it everywhere, unless they make the machines differently, which I doubt.

    Nice to see you back, bmeister! I thought you had thrown away all your Apple products in disgust after iOS7......;)
  • Reply 9 of 34
    Quote:

    Originally Posted by anantksundaram View Post





    Nice to see you back, bmeister! I thought you had thrown away all your Apple products in disgust after iOS7......image

     

     

    Just holding on to what I have until they come to their senses, toss it and make a more visually pleasing iOS8!

     

    Still hoping that Mac OS doesn't adopt any of the crap from iOS7...  But, I am ready to jump at a good system some time next year that will hold me for about five years (if the hardware doesn't give out).  Might buy a spare...

  • Reply 10 of 34
    herbapouherbapou Posts: 2,221member
    Quote:
    Originally Posted by AppleInsider View Post


    Customer rights under the Australian Consumer Law, which went into effect in 2011, provides guarantees against faulty products for what is described as a reasonable amount of time based on cost and quality of the item.



     

    What a piece of BS law, no specifics opens the door to endless lawsuits....

  • Reply 11 of 34
    muppetrymuppetry Posts: 3,328member
    I'm always a bit surprised at the flak Apple gets for these warranty issues. On the occasions that I have had problems, Apple has always, without exception, fixed or replaced the item in question, in or out of warranty. I've not known another company like that.
  • Reply 12 of 34
    saareksaarek Posts: 1,118member
    Quote:

    Originally Posted by muppetry View Post



    I'm always a bit surprised at the flak Apple gets for these warranty issues. On the occasions that I have had problems, Apple has always, without exception, fixed or replaced the item in question, in or out of warranty. I've not known another company like that.

     

    Maybe they are nicer where you are, whilst in warranty I have always found Apple's service to be top notch. But when my iPhone 4s' top button stopped working after 14 months (bearing in mind that the phone was in a protective case and was in pristine condition) the helpful Genius suggested that I either use an annoying software work around or cough up £150 for a replacement handset.

    Or when my top of the line 2010 iMac decided to die after just 16 months another Apple Genius was happy to quote me just over £400 for a fix....

    Let's just say that I rightly nailed them to the wall with the UK and Europes consumer protection laws and got them to fix both items at their expense.

    I appreciate that everyones mileage may vary, but when you spend just over £2000 ($3300 US) on a computer and you look after it you should be able to expect AT LEAST 3 years use out of it. Sure if you go and buy a crap £300 Dell you can't really expect more than a year or so out of it, heck anything over that is a bonus.

  • Reply 13 of 34
    muppetrymuppetry Posts: 3,328member
    Quote:

    Originally Posted by saarek View Post

     
    Quote:
    Originally Posted by muppetry View Post



    I'm always a bit surprised at the flak Apple gets for these warranty issues. On the occasions that I have had problems, Apple has always, without exception, fixed or replaced the item in question, in or out of warranty. I've not known another company like that.

     

    Maybe they are nicer where you are, whilst in warranty I have always found Apple's service to be top notch. But when my iPhone 4s' top button stopped working after 14 months (bearing in mind that the phone was in a protective case and was in pristine condition) the helpful Genius suggested that I either use an annoying software work around or cough up £150 for a replacement handset.

    Or when my top of the line 2010 iMac decided to die after just 16 months another Apple Genius was happy to quote me just over £400 for a fix....

    Let's just say that I rightly nailed them to the wall with the UK and Europes consumer protection laws and got them to fix both items at their expense.

    I appreciate that everyones mileage may vary, but when you spend just over £2000 ($3300 US) on a computer and you look after it you should be able to expect AT LEAST 3 years use out of it. Sure if you go and buy a crap £300 Dell you can't really expect more than a year or so out of it, heck anything over that is a bonus.


     

    I agree with your expectations - mine are similar. Maybe I have just been lucky.

  • Reply 14 of 34
    How Bruce Sewell (Apple's General Counsel) has stayed around is beyond belief; a competent law team would not allow these endless and costly black eyes. If Sewell was a baseball player, he'd be batting .125 and dropping easy fly balls.
  • Reply 15 of 34
    "Human decency" my ass.
  • Reply 16 of 34
    crowleycrowley Posts: 5,799member
    herbapou wrote: »
    What a piece of BS law, no specifics opens the door to endless lawsuits....
    Endless? Not at all. Once precedent has been set them the law has context. No problem at all.

    It would be impractical for consumer protection laws to be specific for every possible kind of consumer good.
  • Reply 17 of 34
    jfc1138jfc1138 Posts: 3,090member
    With NO set time limit how is anyone supposed to know their rights?

    Idiots.
  • Reply 18 of 34

    Just holding on to what I have until they come to their senses, toss it and make a more visually pleasing iOS8!

    Still hoping that Mac OS doesn't adopt any of the crap from iOS7...  But, I am ready to jump at a good system some time next year that will hold me for about five years (if the hardware doesn't give out).  Might buy a spare...
    iOS7 seems very popular with the younger demographic. Personally I love it and never want to go back to skeumorphic.

    Each to thier own I guess.

    Anyway, back to the thread...
  • Reply 19 of 34

    If Apple ever sets up a corporate presence in New Zealand they'll get exactly the same treatment here as in Australia. The NZ Consumer Guarantees Act has been around for a couple of decades, and proven to be highly effective, as well as fair and workable. It is this law that Australia used to base it own version that came into law in 2011.

     

    If/when Apple moves into NZ properly, they'll have to flush the Applecare Protection Plans down the drain as they'll very quickly be tested and will, undoubtably, fail to meet the test of NZ law.

     

    A computer that doesn't last three years, won't meet the Act. Neither would a smartphone that didn't last two years (presuming such devices have not been abused).

     

    Arguably, the Act is between the seller and consumer (it doesn't apply to corporate purchases) and has less to do with the manufacturer. The consumer can take the goods back to the shop and rightly demand they be fixed or replaced (shop's discretion) to the standard set out in the Act. It's then up to the shop to battle it out with the manufacturer.

     

    As I said, this has worked very well for a long time, so there's no point in arguing that it's a dumb law. It isn't. It works. It keeps companies honest and reduces the need for extended warranties to practically nil. Extended warranties are little more than additional profit for companies anyway. America could learn a little from Australia and NZ on this (as well has healthcare, but let's not get into that here!).

  • Reply 20 of 34

    I had one of the MacBook Pros with the faulty NVIDIA GPUs. It failed after 2.5 years and Apple quoted more than the machine was worth to replace the motherboard.

     

    Under Australian consumer guarantee laws I would have been covered as a notebook PC is expected to last longer than 2.5 years.

     

    Unfortunately I had bought the MBP in the US so I was screwed :grumble:

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