JB Hi-Fi, one of Australia's most recognised retailers, is facing a class action lawsuit filed by Maurice Blackburn Lawyers alleging its extended warranties are of 'little or no value'.

The lawsuit, filed in the Supreme Court of Victoria on Friday 8 December 2023, seeks compensation for loss or damage, interest, and costs for the lead plaintiff and group members. The class action alleges that these warranties were essentially worthless, as customers already had the same rights for free under the Australian Consumer Law.

The warranties are offered to the retailer's customers when they purchase goods such as consumer electronics, home appliances, and home entertainment products. Maurice Blackburn alleges JB Hi-Fi used misleading or deceptive conduct or unconscionable conduct in selling the extended warranties, including by telling customers either directly or by implying, that the extended warranties operated for longer than the rights under the Australian Consumer Law, provided benefits that the Australian Consumer Law did not, and were of value to customers.

Compensation is being sought for everyone who purchased an extended warranty from JB Hi-Fi between 1 January 2011 and 8 December 2023. This could potentially involve a significant number of consumers, given JB Hi-Fi's prominence in the retail sector. Sales at its Australian stores topped $6.5 billion last financial year.

Maurice Blackburn Lawyers Principal, Miranda Nagy, said the class action would seek refunds for consumers who bought the expensive policies.

“These warranties are in most cases little more than a junk add-on to consumers’ purchase of the household goods they actually want,” Nagy said. “JB’s extended warranties expire just 3-6 years after purchase, but they add substantially to the cost. Our case alleges they added nothing meaningful to the strong rights for repair, replacement or refund under the Australian Consumer Law rights that consumers already enjoy.”

The lawsuit further alleges JB Hi-Fi engaged in misleading or deceptive conduct or unconscionable conduct in selling the extended warranties. JB Hi-Fi customers have the option to purchase an extended warranty on products including electronic devices, home entertainment and home appliances. Products that JB Hi-Fi sold as extended warranties have also been called Extended Care, Extra Care, Customer Care or Warranty Extensions at different times since 1 January 2011.

In response to the lawsuit, JB Hi-Fi said it takes compliance with its legal obligations very seriously.

"JB Hi-Fi intends to vigorously defend the proceedings. JB Hi-Fi will keep the market updated in accordance with its continuous disclosure obligations," the ASX statement on 11 December read.