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Noel Leeming fined $200,000 for misleading consumers

18 December 2018

Retailer the Noel Leeming Group has been fined $200,000 for misleading consumers about their rights under the Consumer Guarantees Act (CGA), following a Commerce Commission prosecution.

Noel Leeming was convicted on eight charges under the Fair Trading Act, for making false or misleading representations to consumers about their rights under the CGA.

Each charge relates to a different complainant and the conduct occurred between September 2015 and January 2017 at seven stores across New Zealand. The complainants purchased consumer goods such as mobile phones, laptops and household appliances.

“This prosecution related to multiple consumers in multiple locations. It was not isolated or ‘one off’ conduct. Consumers complained to Noel Leeming about products and were entitled to have their complaints treated seriously, investigated properly and remedied where appropriate. Instead they were misled – sometimes repeatedly – about their rights under the law, at a moment when it really mattered to consumers that their legal rights were honoured,” says Commissioner Anna Rawlings.

Consumers were misled about:

  • the right to seek remedies for faulty goods from Noel Leeming rather than the manufacturer,
  • the right to a refund for a faulty product, and
  • the right to a replacement for a faulty product.

In sentencing in the Auckland District Court, Judge Nicola Mathers said there were “direct and significant departures from the truth in every case … consumers were denied their rights and had real difficulty dealing with Noel Leeming.”

Noel Leeming made misrepresentations such as that claims under the CGA about an iPhone had to be negotiated with Apple directly; and the CGA “is not effective for” Noel Leeming, and a consumer was not entitled to a refund despite false representations made about the suitability of a mobile phone

“These statements are simply wrong. The CGA entitles consumers to receive a remedy from Noel Leeming, as the supplier. A supplier cannot refuse to deal with its customers and refer them to the manufacturer. The CGA is also clear about the circumstances in which a refund or replacement is available. These statements should not have been made to consumers,” says Ms Rawlings.

Since 2007 the Commission has three times warned or issued compliance advice to Noel Leeming about potentially misleading consumers as to their CGA rights.

Last updated on the 18th December 2018