HP Australia was ordered by the federal court to pay AU$3 million for misleading Australian retailers and customers about their rights concerning coverage of product warranties.
The Australian Competition and Consumer Commission (ACCC) filed case against HP in federal court last 2012 and accused the company for violating the Australian Consumer Law and Fair Trading Act 2012. The ACCC alleged that HP made false claims about customers' rights when they purchase a defective HP product.
According to ACCC reports, HP customer service representatives made false claims to customers. HP service crew told consumers their products can only be replaced if vendors have tried repairing them multiple times.
HP retailers were led to believe that the global company will not repay them if ever they replaced or refunded a product without the authorisation of vendor.
A wholly owned subsidiary of HP, HP Australia apparently misled customers to pay for repairs if they were made outside the indicated warranty period. Customers were also told that products bought on HP's online store can no longer be returned or exchanged subject to the discretion of HP.
HP acknowledged in June that the company violated Australian Consumer Law with its misleading claims but the company questions the extent of damages to consumers.
HP lawyers question extent of consumer damage since they find no evidence to establish the number of people affected by HP's misleading claims regarding product warranties. The team explained that HP Australia did not want to get away from paying damages but only wanted to keep the agreed amount from going any higher.
The federal court also ordered injunctions, declarations and orders for the HP to pay court fees of the ACCC amounting to AU$200,000.
HP has begun setting up a process for affected consumers in Australia. Customers who feel they have been misled can contact HP directly.
The Australian consumer watchdog is currently investigation other global manufacturers and retailers in the country for possible violations of consumer law.