Household goods retailer Harvey Norman is facing a class action for allegedly selling unnecessary and worthless extended warranties to customers.

The extended warranty, called ‘Product Care’, is sold with products such as electronics and white goods, claiming to provide extra protection to consumers who experience faulty products.

However, Echo Law’s class action alleges that the warranty offers no value to consumers, as the protection it provides is no more than the rights and remedies already provided under the Australian Consumer Law.

Customers have reportedly paid approximately an additional 10 to 40 per cent of the product price for the warranty, depending on the type of product and length of coverage.

Laura Meath, senior associate at Echo Law, shared that hundreds of Harvey Norman customers are upset that they’ve paid thousands of dollars for what they believe is nothing. “They feel like they’ve been tricked,” she added.

“When you consider the rights all consumers are guaranteed under the Australian Consumer Law and the long list of fine print exclusions to Harvey Norman’s Product Care, it becomes clear that there is nothing substantially additional or beneficial about this product.”

The ACCC has reported on several issues with Harvey Norman’s Product Care and previously accepted a court-enforceable undertaking from the Harvey Norman group of companies.

While the revenue collected through the sale of Product Care has not been disclosed in its financial reporting, Echo Law estimates that customers have paid hundreds of millions of dollars for the protection since September 2018, which is the period covered by the class action.

“In reality, Harvey Norman is packaging up the obligations it already has to repair, replace, or refund faulty products sold in its stores and is selling this to its customers at a premium,” concluded Dr Meath.

“Harvey Norman needs to be held accountable, do the right thing, and refund that money with interest.”