Booktopia fined $6 million for misleading consumer guarantees

On 10 March 2023, the Federal Court ordered Australian online book retailer Booktopia to pay $6 million in penalties for making false or misleading representations on its website and in dealings with customers about consumer guarantees, in breach of the Australian Consumer Law (ACL).

This case highlights the importance of accurately representing consumer guarantee rights and the consequences of making false or misleading statements about such rights. It demonstrates that businesses cannot place restrictions on statutory consumer rights and must comply with the ACL.

Background

In proceedings brought by the Australian Competition and Consumer Commission (ACCC) against Booktopia Pty Ltd (Booktopia), the Federal Court found that between 10 January 2020 and 2 November 2021, Booktopia engaged in conduct that contravened sections 18 and 29(1)(m) of the ACL.

The finding came after Booktopia admitted that it had made misleading statements about consumer rights entitlements, including:

• only offering refunds, repairs, or replacements if notified within two business days of receiving a faulty product or an incorrect order;
• wrongly stating that customers were not entitled to refunds for digital products (such as eBooks) for any reason, including if the product was faulty; and
• advising 19 individual customers that it had no obligation to provide refunds or replacements if they did not notify Booktopia within two business days of delivery, even if the product was faulty.
• The Court ordered Booktopia to pay $6 million for these contraventions. Notably, Booktopia was also ordered to publish a notice on its website within 21 days correcting the false or misleading claims and to establish a consumer law compliance program for three years.

Takeaway

The ruling against Booktopia serves as a reminder to all businesses that failure to comply with Australian consumer rights laws and misleading consumers about their rights can attract significant financial penalties.

Consumers have the right to expect products to be of acceptable quality and are entitled to return faulty products within a reasonable time and receive a refund, repair, or replacement, depending on the nature of the fault. Businesses cannot restrict consumer rights and face the risk of investigation and enforcement action by the ACCC for non-compliance.

For advice and support regarding competition and consumer law requirements and best practice within your organisation, contact our experienced team of privacy, competition and consumer law experts.

Image by Shiromani Kant on Unsplash.