The Federal Court has ordered caravan manufacturer Jayco to pay a penalty of $75,000 for making a false or misleading representation to a consumer about their consumer guarantee rights, following court proceedings by the Australian Competition and Consumer Commission (ACCC).

In November 2020, the Federal Court dismissed the majority of the ACCC’s case, including the allegation that Jayco acted unconscionably towards four consumers by denying them the right to refunds or replacements for their defective caravans.

The court, however, found that Jayco had misled one consumer by representing that they were only entitled to have their caravan repaired, when in fact a consumer’s rights under the Australian Consumer Law when there is a major failure also include a refund or replacement.

The court found that the caravans purchased by four consumers, who formed the basis of the ACCC’s case, were not of acceptable quality, and that defects in three of the caravans were major.

When finding there was a major failure, the court had regard to the cumulative effect of the defects, which included water leaks when it rained and multiple roof collapses. 

“Misleading consumers about their rights under the consumer guarantees, particularly by a large well-known manufacturer, is serious misconduct,” ACCC chair Rod Sims said.

“This penalty is a reminder to businesses that representations to consumers about their consumer guarantees rights need to be accurate. Consumers have a right to a repair, replacement or refund for goods with major faults.

“The ACCC will continue to take action against businesses who deny consumers the remedies available under the Australian Consumer Law for products that have clear defects,” Mr Sims said.

Jayco agreed with the ACCC to make joint submissions to the court in relation to penalty and consented to a declaration and costs order.

Have you ever bought a big-ticket item and had to demand a refund due to major defects? What was wrong and did you have problems getting a refund or replacement?