LG offers full refund

LG compensates consumers for greenwashing
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01.LG accused of greenwashing

LG Fridge

CHOICE has exposed incorrect energy ratings on LG’s new GC-L197NFS side-by-side fridge. LG claims the fridge's annual energy consumption is 738kWh, but our testing shows it actually uses considerably more when it bypasses a special "energy-saving mode". LG knows circumvention modes such as these do not comply with the relevant testing standard - the Minimum Energy Performance Standards (MEPS) - yet this popular fridge and the similar GC-P197WFS model still somehow “slipped through the net” and were released and sold. 

LG offers compensation to customers

LG says via a statement on its site that it sold 1259 of the two affected models and that they have already made contact with 500 customers. They are offering three options to affected customers: first, an energy label rebate of $331.20 (calculating the cost of extra energy use @20 cents/kWh over 12 years). The second option is based on the fact that LG is aware that some consumers will have purchased the fridge on the basis of its efficiency credentials, so is offering consumers either a replacement fridge which meets the energy rating standards advertised or a full refund of the purchase value of the fridge.
LG will be contacting affected customers in order to inform them about how to claim the rebate or replacement or refund. Customers wishing to find out if their fridge is one of models affect should contact LG on 1800 506 154 to discuss how LG will work with them to resolve the issue. LG has also contacted retailers to explain the issue and to request that any unsold stock be returned.

How does the energy-saving mode work?

The GC-L197NFS's energy-saving mode is activated when it detects an ambient temperature between 22°C and 34°C and the door is not opened for some time. While this feature can be perceived as a good one, as it switches to this mode within typical kitchen temperatures and not just the energy test ambient of 32°C, it can be detrimental to the quality of your food. It saves energy by allowing longer compressor-off cycles that result in large temperature fluctuations in the freezer.

Temperature swings potentially compromise the quality of your food. A good indicator of this is that ice crystals will start to form in your ice-cream, which then becomes gritty and eventually yellows. The warmer your freezer is, the quicker this will happen. You may find your food doesn’t keep as long as you’d expect it to, particularly milk, ice-cream and other delicate veggies and fruit . This fridge also goes into an energy-saving mode after a defrost cycle that can happen at any time, further lengthening the time your food is stored at fluctuating temperatures and increasing the risk of your food being spoiled. We advise anyone who has purchased one of the refrigerators to use a good temperature thermometer to help you set and maintain temperatures of 3°C in the fresh food compartment and -18°C in the freezer, as recommended by Food Standards Australia New Zealand.

While CHOICE believes making energy-efficient products is important, it should not come at the expense of good fundamental temperature performance.

LG claims the GC-L197NFS’s annual energy consumption is 738kWh, but our testing shows it uses about 876kWh when bypassing the energy-saving mode. So under these “normal” conditions – i.e. regular door openings and using a national average electricity cost of 17 cents per kWh - it may cost you an extra $235 over 10 years: the expected life of the fridge. But the actual costs are likely to be much more if the proposed increase in electricity costs over the next three years eventuates – particularly in NSW, where the proposed rise is 62% over three years. If that happens, the out-of-pocket difference is about $200 in just three years with a starting point average of 17c/kWh. However, individual consumers may already be paying much higher prices, such as for green energy, so the impact could be even greater, especially if the freezer is set to the recommended -18°C and not just the -15°C as required for the energy efficiency tests.

LG also claims the fridge is designed this way because most kitchens are between 22°C-34°C, so reducing its energy use at these temperatures can save money. LG told us in December 2009 that the model we tested was discontinued in November 2009 and was to be replaced by the GC-L197STS in early 2010, which was to have new logic and a linear compressor. But our checks with retailers in February 2010 found the GC-L197NFS is still a strong seller and stock is still available, with more shipments arriving. After checking with LG, they claimed the GC-P197WFS was discontinued and that the GC- L197NFS had been updated to ensure that the energy consumption matches the registered level of 738kWh. LG has said it would write to retailers informing them of the issue and asking them to return any unsold stock. Further, LG says these two affected models were mistakenly registered to the new standard using the old standard test method, and were only sold between September and December 2009.

LG’s history of false claims

LG has a chequered history of making false and misleading claims. In 2004, LG made 4A-rated water efficiency claims for numerous washing machines before they were certified. It gave court-enforceable undertakings to the Australian Competition and Consumer Commission (ACCC) to place a corrective notice on its Australian website, send a corrective notice to retailers, and upgrade and maintain its trade practices compliance program.
In 2006, the Federal Court declared LG made false or misleading representations about the existence and duration of statutory conditions and warranties implied by federal law, and also about the rights and remedies that were available to mobile telephone owners/consumers. Amongst other requirements, the company was again asked to upgrade and maintain its trade practices compliance program.
Also in 2006, LG gave court-enforceable undertakings to the ACCC to offer consumers rebates to cover the extra energy costs five of its air conditioners would use based on overstated efficiency on the energy labels. Once again, LG was requested to review and upgrade its trade practices compliance program.

CHOICE verdict

It is clear LG Electronics are repeat offenders who have not learnt from their past mistakes and are failing to demonstrate respect for regulations, the environment and consumers. As part of our GreenWatch campaign, CHOICE is advising the ACCC of the matter. We’re calling on the regulator to conduct a thorough investigation. 
LG is offering an energy label rebate of $331.20 to affected customers. CHOICE believes the compensation should be higher to accommodate the expected electricity cost rise.
We’d be interested in consumers’ views: what do you think is a fair remedy for this sort of problem? Please comment below.



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