The Harvey Norman Holdings Limited (ASX: HVN) share price is down after being served with a class action.
Class action
The retailer said that it and its subsidiary Yoogalu have received an ‘originating application and statement of claim’ about a class action relating to products with Product Care rights sold by franchisees to customers.
Harvey Norman said the proceedings include claims for compensation for an unspecified amount, interest and costs for the lead plaintiff and class action group members.
The ASX share believes that it has complied with all relevant laws at all times and intends to “defend the proceedings vigorously”.
Harvey Norman said it will update the market with its continuous disclosure obligations.
More details
Echo Law is the lawyer group behind the class action that’s taking action.
The law firm said it has commenced action on behalf of consumers who were sold an extended warranty at the time they purchased goods from Harvey Norman (including Domayne and Joyce Mayne), either in store or online, between 17 September 2018 to 17 September 2024.
Echo Law explained the extended warranties, called Product Care, are sold alongside items like televisions, computers and kitchen and laundry products. The law firm explained:
The class action is based on allegations that Product Care offered little or no value, because consumers were already guaranteed the same (or greater) rights under the Australian Consumer Law, for free. As such, we consider that Harvey Norman consumers who paid for Product Care should be entitled to compensation.
Final thoughts on the Harvey Norman share price
We don’t know what the class action will amount to, or what the company is being targeted for – it could depend how many consumers sign up to the class action. However, the market reaction is relatively muted, so it’s probably not going to be significant for Harvey Norman.
It doesn’t look like a cheap investment after rising 15% this year. But, I’ve been impressed by the company’s expansion overseas. Even so, there are other ASX dividend shares that I’d rather buy for my portfolio.
