Seller’s extended warranties do not provide more coverage than the consumer’s rights, Choice says | Law (Australia) | So Good News


Australian consumers are being sold extended warranties that do not provide cover beyond statutory rights, consumer group Choice has said.

Choice bought products from 80 Harvey Norman stores, JB Hi-Fi and The Good Guys chain.

It found 91% of stores tried to sell extended warranties, and said 71% gave misleading information about consumers’ rights if their goods broke beyond the warranty period.

They often said that consumers should pay for repairs themselves after the warranty period, and used that discussion to persuade consumers to buy a longer warranty, the study found.

But consumers have the right under the law to repair, refund or return a serious problem within a reasonable period of time to purchase a product.

Marg Rafferty, managing editor of Choice, said the policy offered a full refund if an item was faulty.

“The existing consumer protections provide all the protection you need against faulty products, so it’s very disappointing to see these big retailers pushing these expensive guarantees on consumers at a time of crisis,” Rafferty said.

Sometimes an extended warranty can provide a voucher to reimburse consumers if a product fails, he said.

“But in fact, under the consumer law, you have the right to request a refund for losses caused by a faulty product and there is no dollar limit. While the extended warranty will say you can request $100, but it is a short sale of what you already have,” he said.

Manufacturer’s warranties usually last for one year, but a $2,000 TV, for example, can be expected to last more than two years, Rafferty said.

If a product fails under these conditions the seller is obliged to assist the buyer in contacting the manufacturer.

“People should go back to where they bought the product, and explain what went wrong,” Rafferty said.

“Let the store know that you know you have rights under the consumer laws and ask them to give you the right service.”

He said additional licenses are sometimes sold under names such as “extended care” or “product protection” and sold to customers at checkout.

“We’ve seen samples that are automatically added to products, especially online, you’ll see them added to your basket at checkout and you’ll have to unpack,” Rafferty said.

None of the stores where Choice bought the products responded to a request for comment.

A spokesperson for the Australian Competition and Consumer Commission said in a statement that it had spoken to Choice as part of its investigation.

“The ACCC is concerned that Australia’s Consumer Law does not provide enough incentives for businesses to comply.”

The spokesperson said the ACCC continued to push for changes to the law to force retailers to meet consumer standards and to prevent manufacturers from refunding consumers if a product fault is the manufacturer’s responsibility.


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