Caravan manufacturer Jayco fined $75,000 for failing to offer refund on faulty product

Caravan manufacturer Jayco has been fined $75,000 for breaching consumer law after it offered to repair a customer’s faulty vehicle instead of issuing a full refund, a court has found.

In a judgement handed down on Monday, the Federal Court found Jayco Corp breached consumer law by engaging in misleading conduct, and by misleading a customer about their consumer guarantee rights.

A Jayco representative declined to provide one customer with a full refund or replacement of a faulty vehicle they had purchased. Instead, the representative offered to repair the vehicle under the terms of a warranty.

Australian Competition and Consumer Commission (ACCC) deputy chair Mick Keogh says he is “pleased with the decision”, which serves as a reminder to retailers of “the need to be particularly mindful of their obligations under the Australian Consumer Law”.

The ACCC initiated proceedings against Jayco in November 2017 on behalf of four customers.

The ACCC alleged that Jayco made false or misleading representations to the four consumers about their rights to obtain a refund or replacement of a faulty product. In its judgement, the Court found that Jayco made a false or misleading representation to just one of the four consumers about their consumer guarantee rights under consumer law.

Where a good or service purchased by a consumer doesn’t meet the required standard, or in fact is unfit for purpose, then consumer law requires that a retailer either “repairs, replaces or refunds” the consumer — irrespective of any warranty, Keogh explains.

“Our case was that Jayco failed to clarify that in the event of a major failure, which this customer considered had occurred, replacement is required,” he tells SmartCompany.

Federal Court Justice Michael Wheelhan found that most of the ACCC’s claims against Jayco “were not established”.

However, Justice Wheelan did find that Jayco had contravened consumer law “on one occasion, in respect of one consumer”.

In that instance, Jayco failed to offer a customer a repair or refund on a faulty product.

“Consumers dealing with products that are not of acceptable quality may experience stress due to the definiens associated with the relevant products,” Justice Wheelan said.

The court ruled that the breach of consumer law in this example “was of a limited nature” as it involved one employee making one misleading representation to one customer.

A Jayco spokesperson acknowledged the Federal Court’s judgment, saying Jayco’s unlawful conduct was not deliberate, and was not undertaken with the intention to mislead or deceive.

“Jayco greatly regrets that it was found to have contravened the ACL in its dealings with one customer and it intends to ensure that its contravening conduct does not reoccur,” the spokesperson said.

As a result of the ruling, the ACCC has been ordered to pay back 80% of Jayco’s legal costs accrued over the past four years. Jayco will pay 20% of the ACCC’s costs.