JB Hi-Fi Is Facing A Class Action Lawsuit For Allegedly Selling Warranties That Should Be Free


Warranties for expensive items can feel like a no-brainer — especially if you’re the clumsy type. So, paying JB Hi-Fi a little extra for an extended warranty that covers your $2,000 item might seem like a pretty reasonable investment in the long run. However, a new class action lawsuit against the electronics retailer has pointed out that you’re already legally entitled to certain consumer guarantees. If you’re being charged for them, well… there’s a possibility you’re being taken advantage of.

The lawsuit, lodged on Friday by Maurice Blackburn, alleges that JB Hi-Fi has been charging customers for extended warranties that are essentially offering the same things the customers are already entitled to under Australian Consumer Law.

It specifically mentions the retailer’s “extended care”, “customer care” and “extra care” plans, which, among other issues, offer gift cards and store credits instead of monetary refunds, and alleges JB Hi-Fi failed to make clear how its extended warranties differ from what is already covered under consumer laws.

Maurice Blackburn argues that JB Hi-Fi did not make it clear that it is the right of the customer, not JB Hi-Fi, to choose a remedy (e.g. refund, replacement or repair) for their faulty product, that consumer laws cover defective products, and that customers are entitled to a monetary refund, not just store credit.

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Suddenly re-evaluating every expensive tech purchase I have ever made. Image: Brent Lewin/Bloomberg via Getty Images

“JB Hi-Fi’s warranties never lasted more than three to six years after the date of purchase,” says Miranda Nagy, principal lawyer for Maurice Blackburn, per ABC News.

“So when you think about buying, for example, a $2,000 fridge, you’re expecting a fridge like that … to have a much longer life than six years.

“Australian Consumer Law remedies were likely to last longer in most cases.”

JB Hi-Fi said it will “vigorously defend” itself in response to the allegations.

“JB Hi-Fi takes compliance with its legal obligations very seriously and considers that it has complied with relevant laws at all times,” a spokesperson told PEDESTRIAN.TV.

“JB Hi-Fi intends to vigorously defend the proceedings.”

What are your consumer rights?

According to consumer laws, the product you are buying must be in acceptable quality, free of defects, safe, durable and useful for its purpose.

Consumer guarantees are legal rights you get when you purchase a product. Depending on the nature of the product, these rights could include the right to get it repaired, replaced or refunded by the retailer if it’s within a reasonable amount of time.

Crucially, it’s your choice to decide whether your item is refunded, repaired or replaced, and you have these rights whether or not you buy an extended warranty.

Your entitlements depend not only on what item you bought, how much it cost, and what it’s purpose is, but also what time of fault the product has.

For example, if you bought a TV or a washing machine — items you expect to have for a long time — and they developed a major fault a few years later through no fault of your own which made them unusable, you would be entitled to a repair, refund or replacement regardless of if you purchased an extended warranty.

It doesn’t matter if the manufacturer only provides a one or two year warranty — Australian Consumer Law is on your side.

Is it just JB Hi-Fi slinging these extended warranties?

JB Hi-Fi the only retailer named in the suit, but it is “very far from being the only retailer that sells products of this nature”, Nagy said.

Choice did its own investigation in 2022 where it sent mystery shoppers to 80 different JB Hi-Fi, Harvey Norman and The Good Guys stores (the latter also being owned by JB Hi-Fi Group). It found that 7 in 10 stores “actively misrepresented consumers’ rights to a remedy”, and that 73 out of the 80 salespeople attempted to upsell an extended warranty.

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Hands up if you have been personally victimised by a business that refused a monetary refund for a faulty item. Still crying over my 2017 laptop that died for no reason that the manufacturer refused to replace. (Image: Brent Lewin/Bloomberg via Getty Images)

“The most common way consumer rights were misrepresented was staff stating or implying that the chances of receiving a free remedy after the warranty period were very slim or nonexistent,” the consumer group stated.

“Sometimes we were told that we’d be entitled only to a repair (never a replacement) or that our rights were limited to a specific time period (such as two years).

“Only when specifically asked about rights without an extended warranty was it acknowledged that we already had rights under consumer law. We found this to be a misleading sales technique, as it gives the false impression that people have rights only if they buy an extended warranty.”

Choice also slammed retailers for telling mystery shoppers that they must run the faulty products through their “system”, which it said implies “that a consumer’s right to a remedy depends on an internal, store-run system, rather than being enshrined in the ACL.”

Next time you’re shopping for an expensive electrical product, be careful about what exactly any warranty you are being offered covers and ask lots of questions about its limitations — especially how it compares to Australian Consumer Laws. Chances are, you might be surprised at how much you are already legally entitled to.

Image: Brent Lewin/Bloomberg via Getty Images