Koala Living penalised for misleading consumers

Furniture and homewares retailer Koala Living has been fined $56,340 for misleading customers about their rights to remedies for faulty products.

The ACCC previously issued Koala Living with three infringement notices after many consumers complained the company had wrongly stated their rights. 

The company said the remedies were limited to a 72-hour period or the period of the manufacturer’s warranty, and that it could choose the type of remedy for minor and major faults.

The retailer also wrongly informed consumers that delivery charges were not refundable, when in fact consumers have a legal right to compensation for any foreseeable loss or damage due to the failure to comply with a consumer guarantee. 

“Under the Australian Consumer Law, consumers can ask for a repair, refund or replacement for faulty goods, even after the warranty has expired,” ACCC commissioner Liza Carver explained.

“If a good has a major problem, consumers have a right to choose either a replacement or a refund, and the refund should be the full amount the consumer paid,” Carver added.

Aside from paying the fine, Koala Living has agreed to provide compensation to affected consumers. The compensation will amount to 20 per cent of the purchase price and is separate from any remedies consumers may be entitled to under the consumer guarantees.

The company has also committed to reviewing its policies and procedures as well as removed the incorrect statements from its website.

• Further reading: Harvey Norman loses Asic case over misleading finance claims

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