Why millions of JB Hi-Fi customers are getting these texts and emails about a court case

It looks like a scam. But if you’ve received an unexpected email or text message, starting with The Supreme Court of Victoria has ordered that you receive this notice because you may be a group member in the JB Hi-Fi Class Action. it is most likely real. Those messages are about an upcoming court case, relating to extended warranties sold by JB Hi-Fi over more than a decade. More than 8 million customers who bought those warranties are eligible to be part of the case – and potentially compensation if the case succeeds. The clock is now ticking for them to decide whether to stay involved, or opt out. Win or lose, the case will be significant in addressing unanswered questions about Australians’ protections for defective goods. It challenges the value of extended warranties to buyers – and exactly what retailers have to tell consumers about their rights under Australian consumer law.

What the court case is about The case relates to extended warranties sold by electronics and appliances retailer JB Hi-Fi between January 1 2011 to December 8 2023. A similar action against retailer Harvey Norman may follow. Extended warranties are often offered to consumers to buy at the point of sale for electronics and white goods. They purport to provide extended protection against certain faults past the time of the manufacturer’s warranty. Consumer advocates have long questioned the benefits of extended warranties, because the Australian Consumer Law already provides consumers with guarantees of performance and quality on purchased goods. In particular, goods have to be of “acceptable quality”, meaning – at minimum – they have to be safe and durable. These statutory guarantees last beyond the manufacturer’s warranty.

Opt out or stay in? The initial trial will begin in Victoria’s Supreme Court from October 5 and is expected to run for six weeks. If you want to stay involved, you don’t need to do anything. But to opt out, including to possibly pursue your own claim, you need to read the information and complete an online opt out notice by May 29. Were consumers misled? This case is not just about the value of an extended warranty. It is also about what consumers were told – or should have been told. Legal firm Maurice Blackburn, which is running the case, needs to show consumers were actually misled about what they were paying for as compared to their rights under the Australian Consumer Law. It is not enough to show consumers decided to buy something that was not as useful as they might have thought. In this case, the plaintiff being represented by Maurice Blackburn bought a fridge for $745.17 an extended warranty, known as an “extra care repair cover plan”, for $62.57 and a delivery and connection package for $65. Maurice Blackburn is arguing their client was misled in making this purchase by the salesperson, who said the extended warranty was “a good idea”. JB Hi-Fi’s defence The defence filed by JB Hi-Fi argues that information about both the extended warranty and the statutory consumer guarantees was available at the point of sale. This meant consumers could make their own assessment of an extended warranty’s value. JB Hi-Fi also argues its extended warranty had some “additional” value beyond that provided under the Australian Consumer Law. JB Hi-Fi recently told business website Inside Retail it “intends to vigorously defend the proceedings”. Class actions and consumer rights Class actions – where one person makes a legal claim representing of a wider group of affected people – are becoming more common in Australia. Research from 2024 found consumer cases were the second most frequently filed class action in Victoria in the previous five years. Individually, consumers usually find it too expensive to go to court to pursue compensation for poor quality products or unfair business practices. But collectively, consumers may be able to achieve some redress through a class action. Recent examples delivering wins for consumers include cases against: Qantas, for providing flight credits instead of refunds, for cancelled flights during COVID Volkswagen, after the carmaker admitted about 100,000 diesel cars in Australia and 11 million cars worldwide were equipped with software to cheat on emissions tests and Johnson & Johnson, over unsafe pelvic mesh implants used in women. Cheaper alternatives to class actions Not everyone thinks class actions for consumer claims are a good idea. Their funding structure can affect payouts, and delays sometimes occur in paying out compensation. Other less costly options available include complaining to the regulator, the Australian Competition and Consumer Commission (ACCC); small claims tribunals; or relevant industry ombudsman services. Our recent research suggests artificial intelligence solutions – such as generative AI providing information to consumers trying to resolve disputes with a trader over small value claims – could be useful. But using AI for legal help can also come with risks. However, those alternatives don’t resolve the kind of systemic questions about business practices and consumer expectations that will soon be addressed in the JB Hi-Fi extended warranty case. Expect millions of Australians – and other retailers – to be closely following news of this case from October on.

Jeannie Marie Paterson has previously received funding from the Australian Research Council for research on the topic of misleading conduct.