Warranty law changes aim to guarantee

ALEX FENSOME
Last updated 05:00 17/06/2014

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For years the extended warranty has been the bane of Kiwi shoppers' lives.

But today things should change.

A raft of consumer law reforms come into force, perhaps the most important of which are new regulations covering warranties.

If you're planning to buy any kind of goods and you're offered an extended warranty, make sure the person you're buying it from tells you the full story, because in many cases they are trying to sell you protection you already have.

Consumer NZ has been advocating for changes to the law around warranties for years. Chief executive Sue Chetwin said retailers had a long history of pushing extended warranties through misinformation.

All sales are covered by the Consumer Guarantees Act, which means anything you buy must be of acceptable quality and last a reasonable time. It does not impose a time limit. If what you've bought breaks down after the maker's warranty has expired, you should still be able to replace it without an extended warranty.

Now, retailers will have to tell you what your rights are under the act, make it clear what difference, if any, the extended warranty makes, and give you a five-day "cooling off" period during which you are entitled to back out of buying one.

Any companies found breaking the law could be fined up to $30,000, and individuals up to $10,000.

Another change in the law covers online sales. Trade Me sellers are now covered fully by the act - previously it did not apply to auctions - and must declare themselves as "in trade" if they are professionals.

Consumer researcher Jessica Wilson said there could be no excuses for retailers.

"[They] have had a long time to respond," she said. "There's been enough time for training and to have new brochures printed."

Consumer NZ last checked out extended warranty sales in 2012, and found widespread misinformation, she said. "[Often] retailers were saying you'd have to battle with the manufacturer if something went wrong [without the warranty]."

Consumer NZ planned to check compliance with the new rules soon, she said.

Yesterday, major retailers including Dick Smith and Noel Leeming continued promoting their extended warranties. On Noel Leeming's website, its SuperCover warranty information includes a comparison with the Consumer Guarantees Act and offers a seven-day "cool-off period" during which the customer can seek a refund.

Dick Smith said it had changed its warranty to match the new laws.

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"Those [changes] which are applicable to Dick Smith have either already been incorporated into the extended warranty product, such as a 14-day cooling period [or] we have . . . introduced changes into our extended warranty documentation which sets out the required disclosure," it said.

The Ministry of Consumer Affairs said it had been putting information about the changes out to business online and through social media.

The Commerce Commission will be able to issue infringement notice fines of up to $2000 without going to court.

CONSUMER LAW CHANGES

 

In addition to the changes to extended warranties, several other consumer laws are getting a tweak:

Online auctions - buying online will be covered by the Consumer Guarantees Act, so if you buy something on Trade Me and it's faulty, you can ask the trader to replace it. Shill bidding - driving up the auction price by bidding on your own items - will be outlawed. If you're a professional seller, you have to list yourself as "in trade" so potential customers know.

If a company claims something about one of its products, it has to be able to back it up with evidence. If it cannot, the Commerce Commission can prosecute. Fines for false and misleading claims have been raised to $200,000 for individuals and up to $600,000 for a company.

Deliveries must be guaranteed on time and with the goods in reasonable condition. If the failure is "substantial" you can claim a refund or replacement. Traders can no longer blame couriers for getting things damaged - it's their job to fix any problems.

Door-to-door sales and telemarketing - you must be given five days to back out of a sale. Door-to-door salespeople have to tell you what you're getting into - the total price, your right to cancel and how to contact the salesperson. If they don't give you that in writing, the sale cannot be enforced. Breaching this new rule can lead to a $10,000 fine for a salesperson, or up to $30,000 for a company.

- The Dominion Post

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