ACCC cuts to the core of Apple’s refund policies

Tech giant Apple has been forced into an embarrassing backdown over its refunds policy, which is subject to a punishing court-enforceable undertaking.

Apple will have to contact customers who were denied refunds, returns or replacements of Apple products bought in the last two years in contravention of Australian Consumer Law, and reassess or resolve their complaints.

Apple must also make changes to comply with the ACL and display online the difference between Apple’s warranty and consumer laws.

The Australian Competition and Consumer Commission was concerned about “false or misleading representations” to consumers on their guarantee rights including that under some circumstances customers wouldn’t get a refund, repair or replacement from Apple when those rights are enshrined in the ACL.

The court-enforceable undertaking states the ACCC was concerned that customers were told Apple is not obliged to give refunds in circumstances where there is a major failure of purchased goods, or a refund, repair or replacement when minor failures appeared in goods from Apple or one of their third-party suppliers. The concerns applied to Apple products and goods resold in Apple stores and online on the app store and iTunes.

Apple agreed to increase education on consumer rights for online, phone and in-store customers for the next two years. It also made assurances that it would offer ACL equivalent rights to consumers in its own two-year warranties, while acknowledging that consumers’ rights may extend further than two years.

It will also train relevant staff annually in consumer rights including in any updates to the ACL over at least 24 months and report back to the ACCC on its training results.

The tech company will also contact customers who have been denied a remedy.

The ACCC has raised various concerns with Apple since January 1, 2011, when the ACL was introduced. The undertaking applies to claims made since that date.

ACCC chairman Rod Sims said consumers had rights under the ACL that over-rule any limitations to those rights in product warranties.

“The ACL consumer guarantees have no set expiry date. The guarantees apply for the amount of time that it is reasonable to expect given the cost and quality of the item or any representations made about the item,” Sims said.

Additional to the court-enforceable undertaking, Apple must not make claims that are out of line with the ACCC’s concerns with their compliance with the ACL.

An Apple spokesman said, “In Australia, we have been working closely with the ACCC to make sure our customers understand their local consumer rights and receive the industry leading customer service they expect.”