Wed Sep 18 02:03:53 UTC 2024: ## Harvey Norman Faces Class Action Lawsuit Over Extended Warranty
**Sydney, Australia -** ASX 200 retail giant Harvey Norman is facing a class action lawsuit from Echo Law regarding its “Product Care” extended warranty program. The lawsuit alleges that the warranty offers little to no value beyond consumer rights already guaranteed under Australian law, and that Harvey Norman is using it to charge customers an extra surcharge.
Echo Law claims that customers have been sold these warranties since September 2018 and are furious about paying thousands of dollars for little to no benefit. The firm argues that “Product Care” is simply a way for Harvey Norman to increase profits.
While Harvey Norman has not responded to the allegations, the ASX 200 retail stock has remained relatively unmoved by the news, trading less than 1% higher today. Analysts emphasize that the lawsuit itself does not change the fundamental aspects of the company’s operations or financial outlook.
Despite the legal challenge, Harvey Norman continues to face a challenging retail environment. The company reported a 30% drop in profit before tax in FY24, citing weaker consumer spending and rising operational costs.
However, despite these headwinds, some analysts remain bullish on Harvey Norman. Evans & Partners recently upgraded the stock to positive, and five out of 13 brokers rate it a buy according to CommSec data.
It remains to be seen whether Echo Law’s class action will be successful, but the lawsuit highlights potential concerns regarding consumer protection and the value of extended warranties in Australia.
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