JB Hi-Fi's legal battle looms as the retail giant is sued for millions – and Australian shoppers demand justice

One of Australia's largest retailers is being sued for allegedly selling extended warranties to customers offering benefits they already receive for free.

A lawsuit filed in the Supreme Court of Victoria on Friday will seek damages from JB Hi-Fi, leaving hundreds of thousands of customers potentially owed millions.

Maurice Lawyers principal lawyer Miranda Nagy said the Australian Consumer Law already provides customers with most of the benefits included in JB Hi-Fi's extended warranties, which have been sold to shoppers since 2011.

“These guarantees, in most cases, amount to little more than a clutter when consumers purchase the household items they actually want,” said Miranda Nagy, director of Maurice Blackburn Attorneys.

The lawsuit alleges that JB Hi-Fi violated the law by using deceptive or unconscionable conduct in selling the extended warranties to its customers.

A spokesperson for JB Hi-Fi said: 'JB Hi-Fi takes compliance with its legal obligations very seriously and believes that it has complied with the relevant laws at all times.

“JB Hi-Fi intends to vigorously defend the proceedings.”

“JB Hi-Fi warranties never lasted longer than three to six years from the date of purchase,” Ms Nagy told the media.

'So if you think about buying, say, a $2,000 refrigerator, you expect that refrigerator… to have a much longer lifespan than six years.

“Australian consumer law remedies would likely take longer in most cases,” she explained.

The lawsuit will seek to reimburse customers who, in some cases, purchased “incredibly expensive” plans such as “customer service,” “extended care” or “extra care.”

The wording of JB Hi-Fi's extended warranty plans states that it offers customers benefits not yet available to them under Australian consumer law.

One of the plans said it gave customers “assurance about the period of coverage and the resolution you will receive,” while others said they protected customers if the item suffered mechanical or electrical failure.

Ms Nagy said some of JB Hi-Fi's plans failed to adequately explain how they differed from basic consumer law protections that were free to customers.

The lawyer said JB Hi-Fi was “far from” the only retailer offering its customers extended warranties with little to no value.

A number of factors must be considered before buyers can have a defective product replaced or reimbursed without an extended warranty.

These include whether it has been a reasonable amount of time, how expensive the product was and how serious the fault is, or whether the product is unsafe.

Customers offered an extended warranty plan in-store are urged to ask plenty of questions, as employees may work on a commission.

The Australian Competition and Consumer Commission said consumer guarantees apply whether or not an extended warranty is purchased.

Consumer guarantees are a customer's right to obtain repair, replacement or refund of a product within a 'reasonable' period of time.

The product must be in reasonable condition, free from defects, safe, durable and fit for its intended purpose.

A lawsuit filed in the Supreme Court of Victoria on Friday will seek damages from JB Hi-Fi, with hundreds of thousands of customers potentially owed millions

It comes after JB Hi-Fi celebrated record sales and profits in the first half of 2022/2023, amid strong demand for electronics and appliances.

The retailer said total sales rose 8.6 percent to $5.28 billion in the six months to December 31, compared with a year earlier.

Unaudited earnings before interest and taxes rose 14 percent to $479.2 million, while net profit after tax reached $329.9 million, up 14.6 percent from a year ago.

“We are pleased to report record sales and profits for HY23 as trading conditions began to normalize after two years of Covid-related disruptions,” said Group CEO Terry Smart.