As we age, we often become more cautious with our purchases, seeking the added security of extended warranties to protect our investments.

However, recent legal action suggested that these warranties may differ from the safeguard we think they are.

Harvey Norman, a household name in Australian retail, is currently facing a class-action lawsuit over the sale of what has been described as 'unnecessary and worthless' extended warranties.

Echo Law, the firm behind the lawsuit, announced on Wednesday that it represented Harvey Norman, Domayne, and Joyce Mayne customers who purchased these warranties from September 2018 to the present day.

This follows a lawsuit launched by Maurice Blackburn Lawyers in December against JB Hi-Fi on behalf of customers who bought extended warranties on products between 1 January 2011 and 8 December 2023.

Echo Law filed a class-action lawsuit against Harvey Norman, Domayne, and Joyce Mayne for selling 'unnecessary and worthless' extended warranties. Credit: Shutterstock

The crux of both lawsuits is that the 'product care' extended warranties sold by these retailers allegedly offered little to no value.

Australian Consumer Law (ACL) already gives consumers the right to repair, replace, or refund defective products at no extra cost.

The implication is that customers were paying for protections they were already entitled to for free under the ACL.

JB Hi-Fi has publicly stated that it takes its legal obligations seriously and intends to defend the claim, asserting that it has complied with the law.

On the other hand, Harvey Norman has yet to comment on the allegations.

Dr Lauren Meath, a senior associate at Echo Law, expressed that 'hundreds' of Harvey Norman customers felt misled after spending thousands of dollars on product care warranties that offered them no real benefit.

'They feel like they’ve been tricked,' Meath said.

The lawsuit accuses Harvey Norman of engaging in 'misleading or deceptive conduct as well as unconscionable conduct' by leading customers to believe that the extended warranty provided additional protection they wouldn't have otherwise.

In similar news, law firm Maurice Blackburn filed a class action lawsuit last year against retail giant JB Hi-Fi, claiming the company has sold worthless or low-value extended warranties since 2011.

The case, submitted to the Victorian Supreme Court, asserted that these warranties provide the same protections that consumers already receive under Australian Consumer Law. You can read more about it here.

Key Takeaways

• Echo Law is launching a class-action Federal Court lawsuit alleging Harvey Norman, Domayne, and Joyce Mayne sold 'unnecessary and worthless' extended warranties.
• The suit claims customers had equivalent rights for free under Australian Consumer Law, making the purchased warranties of little value.
• JB Hi-Fi, facing a similar lawsuit, has stated it complies with legal obligations and intends to defend the claim vigorously.
• The lawsuit accuses Harvey Norman of misleading, deceptive, and unconscionable conduct in selling the extended warranties.

How do you assess the value of warranties for big purchases? What affects your trust in retailers for extra product protection? We’d love to hear your thoughts and opinions in the comments below.

 

[Luckyus]

How do you join in this class action.

 

[kez066]

I have often purchased extended warranties for larger/dearer household items. Including from JB Hifi and Harvey Norman. Once I even claimed, my expensive TV had died just a month out of normal warranty but within extended warranty, and received a brand new, better brand TV that was worth more than my original would have cost to replace. I'm quite happy with the extra peace of mind that these warranties give.

 

[Jest]

THE BUYER HAS THE OPTION TO PURCHASE OR NOT PURCHASE WARRANTIES. SO MANY COMPLAINTS FROM PEOPLE WHO HAVE HAD THE CHOICE.

 

[Barbara V]

I had to purchase a new TV,and electric frypan was asked if I wanted extended warranty I said no and wasn't pressured. I have known they are worthless for years thought everyone did. In the 1980s they brought them out on new vehicles I got one and soon found out that the things covered was in the guarantee of the original purchase. Lesson learnt

 

[PattiB]

My Bosch front loader washing machine developed a problem & when we contacted Harvey Norman to ask when we’d purchased it (husband had filed the receipt?) staff informed us that it was still covered by our extended warranty. We ended up with a brand new, larger capacity washer. We take an extended warranty for expensive purchases & was surprised when I heard this on last nights news. Each to their own if you don’t want it don’t pay for it.

 

[Jest]

I had to purchase a new TV,and electric frypan was asked if I wanted extended warranty I said no and wasn't pressured. I have known they are worthless for years thought everyone did. In the 1980s they brought them out on new vehicles I got one and soon found out that the things covered was in the guarantee of the original purchase. Lesson learnt

nice to hear a smart comment.

 

[marni]

Always declined offer of extended warranty. One Hyundai salesman asked 8 times. Took our business elsewhere

 

[Barbara V]

I have often purchased extended warranties for larger/dearer household items. Including from JB Hifi and Harvey Norman. Once I even claimed, my expensive TV had died just a month out of normal warranty but within extended warranty, and received a brand new, better brand TV that was worth more than my original would have cost to replace. I'm quite happy with the extra peace of mind that these warranties give.

That happened to me years ago and still got a new TV on original warranty as I refused to have it fixed as I'd only had it 5 mnths

 

[novezar]

It is a complete matter of choice for each of us. In a lot of instances it's, damned if you do & damned if you don't.

 

[bluetang]

My Bosch front loader washing machine developed a problem & when we contacted Harvey Norman to ask when we’d purchased it (husband had filed the receipt?) staff informed us that it was still covered by our extended warranty. We ended up with a brand new, larger capacity washer. We take an extended warranty for expensive purchases & was surprised when I heard this on last nights news. Each to their own if you don’t want it don’t pay for it.

I too had a front loader pack it in 2years after the normal warranty and the extended warranty covered
the new one. I found it was well worth the money. It is your own decision.