Warranty rights and wrongs

Use our tools to insist on your rights when products don’t work as they should. And help us pressure retailers to sign our Fair Warranty Charter.
 
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  • Updated:3 Dec 2009
 

01 .The warranty run-around

Warranties-lead2

On 1 January 2011, a new national Australian Consumer Law regime came into effect. Please see our article or go to http://www.accc.gov.au/consumerrights for information on these changes.

In the last two years more than 8.5 million Australians — half the population over 16 — experienced one or more problems with a whitegood, electronic good or mobile phone, according to a report commissioned by Australia’s Fair Trading agencies.

Consumers report incurring extensive costs and wasting hours of time when they are given the ‘run-around’ by retailers. A recent report estimated these costs to consumers amount to $4.3 billion per annum.

Consumers take faulty products back for repair more often than not. And about half the time they are satisfied with the outcome because they got what they wanted (usually repairs or a replacement). But more than a third of the time they got nothing at all!

We don’t think that’s good enough. That’s why we have launched our Fair Warranty campaign for retailers to take consumers' warranty rights seriously.

Consumers overwhelmingly prefer to take faulty goods back to the shop they bought it from. And those retailers have a legal obligation to fix or replace the goods, or give a full refund. We’re calling on all major retailers to sign up to our Fair Warranty Charter as a sign of their commitment to honoring consumers' legal rights.

As well as joining our campaign, there’s lots here to help you sort your warranty rights from warranty wrongs.

















 
 

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02.Warranties explained - what you need to know before you buy

 

For any product you purchase, the law provides for comprehensive warranty protection. For goods, the retailer is obliged to repair, replace or refund the faulty goods. For services, the retailer is obliged to redo the service or pay for the costs of having the service supplied again. These warranties are often known as statutory or implied warranties. Read on for more details on the protection for products you purchase. Knowing your true warranty rights will help you then better decide whether, for example, you need to spend extra money buying an extended warranty.

The statutory warranty/guarantee are a strong consumer protection

The statutory warranty/guarantee provides strong consumer protection for at least six good reasons:

  1. Free: It’s free
  2. Automatically applies: By law it applies to virtually every purchase of goods or services, regardless of any manufacturer’s warranty or any extended warranty you may purchase.
  3. No specified time limit: It’s not limited to a pre-determined time-period.
  4. Comprehensive protection: It provides comprehensive protection for goods if they break down or don’t do what you’d reasonably expect of them. For services, if they’re not of a standard you’d expect of a person in the particular trade or profession. More details below on specific protections.
  5. You are entitled to repair, refund or replacement for goods or getting the job redone for services: You, the customer, are entitled to a solution which puts you in the same situation as if the problem had never happened. For goods this may mean repair, refund or replacement. For services, it may be to have the job redone or being paid for the costs of having it redone.
  6. Follow up with retailer: You only have to follow it up with the retailer – no running around to manufacturers or special repairers.

What protection does a statutory warranty give me?

For GOODS, basic statutory warranty rights include that the goods are:

  • Of merchantable or acceptable quality — work the way you’d expect it to, given the price and how the goods are described. Goods should not have any hidden defects. If any exist, they should be pointed out prior to sale
  • Fit for purpose — does the job the customer told the retailer, or that is implied
  • Matches description or sample — must match any sample presented either in person, on the labelling or packaging, or in any ads  

For SERVICES basic statutory warranty rights include that the:

  • Service must be carried out with due care and skill — the work should be of a standard you’d expect of a person in the particular trade or profession
  • Materials supplied in connection with the service must be reasonably fit for the purpose for which they are supplied — they must achieve the result the customer wants
Other warranties you many have There are two other main types of warranties manufacturers’ warranties and extended warranties. While these may be more familiar, the protections they provide are limited.
  1. There are pre-determined time limits: Manufacturers warranties are subject to pre-determined time limits (often 12 months), meaning you can miss out on getting protection
  2. You may be required to contact the manufacturer: Manufacturers warranties and extended warranties often require the customer to contact the manufacturer, or someone else, who you generally haven’t bought the goods or services from, rather than being able to return to your retailer, which is often more convenient 
  3. Extended warranties can be expensive: Although the cover you get often overlaps with what you should reasonably be able to claim under statutory warranty, and with extended warranties you pay a significant additional cost for this ‘privilege’

CHOICE recommends you think twice about whether you need to buy an extended warranty. You should feel confident that the statutory warranty is likely to protect you in the event that the product you purchase breaks down or doesn’t work in a way that you’d reasonably expect. If you’re unsure, ask the retailer, or call up your state or territory fair trading office for more details.

Important: You should always keep hold of receipts, and store them somewhere easy to retrieve. Photocopying or scanning receipts may be a good way to ensure that if they fade you still have a receipt you can provide to the retailer.

Use the player below to listen to the CHOICE Radio podcast on your warranty rights.

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03.Insist on your rights - what you need to know when things go wrong

 

Despite your best efforts to choose reliable products based on your research, goods sometimes break down or don’t work the way you’d reasonably expect them to. At this point, many people are unsure about where to go to get things fixed.

Virtually all goods and services are automatically protected by comprehensive statutory warranties above and beyond any manufacturers' warranty. For goods this means that they:

  • Are of merchantable or acceptable quality
  • Are fit for purpose
  • Are free from defects
  • Match any sample presented to you

For services, this means that the service must be carried out with due care and skill.

For more information on the protections offered by the statutory warranty, check out Warranties explained - What you need to know before you buy

To exercise your warranty rights, you need to contact the retailer.

Explain the problem

You should contact the store where you purchased the goods or service. You should explain, either in person or in writing, what the problem is and why you are dissatisfied with the goods or service. 

Suggest a solution

You should then suggest the solution that you would prefer – repair, replace, refund or for services, have it redone. Ideally, you should be able to come to a mutual agreement with the retailer about the solution, based on your preference. You are entitled to a solution which puts you in the same situation as if the problem had never happened. For goods this may mean repair, refund or replacement, For services, you can ask for the job to be redone or to be paid for the costs of having it redone.

If the retailer is unable to meet your wishes it is reasonable to try and negotiate a solution acceptable to you.

The retailer should provide a temporary product

When you choose to have a product repaired, or replaced, the retailer should offer the customer a temporary replacement till the product is fixed, or the replacement has been provided, to cover any inconvenience.

The retailer should meet cost of transport/freight

If the retailer requires you to send the product to be repaired, replaced or refunded, the retailer should cover this cost.



If you are dissatisfied with the retailer’s response, you can take your complaint to the next level. Ask whether more senior staff at the retailer can review your situation or contact the state/territory consumer protection bodies agency.

State and Territory Offices of Fair Trading and Consumer Affairs

You can make a complaint to their State or Territory Office of Fair Trading, or Consumer Affairs agency. These agencies consider customer complaints and try to resolve them through conciliation with the trader. If they are unable to help, you may need to take your problem to the small claims court - the agency will explain how.

AUSTRALIAN CAPITAL TERRITORY

The Office of Fair Trading

Phone: (02) 6207 0400

Email: fair.trading@act.gov.au

Web: http://www.ors.act.gov.au/fairtrading






SOUTH AUSTRALIA

Office of Consumer and Business Affairs Phone: (08) 8204 9777

Email: metro.cab@agd.sa.gov.au

Web: http://www.ocba.sa.gov.au





NEW SOUTH WALES

Office of Fair Trading

Phone: 13 32 20

TTY: 1300 723 404

Email: enquiry@fairtrading.nsw.gov.au

Web: http://www.fairtrading.nsw.gov.au  





TASMANIA

Consumer Affairs and Fair Trading

Phone: 1300 654 499

Email: consumer.affairs@justice.tas.gov.au

Web: http://www.consumer.tas.gov.au





NORTHERN TERRITORY

Northern Territory Consumer Affairs

Phone: (08) 8999 1999 or 1800 019 319

Fax: (08) 8935 7727

Email: consumer@nt.gov.au

Web: www.consumeraffairs.nt.gov.au





VICTORIA

Consumer and Business Affairs Victoria

Melbourne VIC 3001

Consumer Affairs Helpline: 1300 558 181

E-mail: consumer@justice.vic.gov.au

Web: http://www.consumer.vic.gov.au





QUEENSLAND

Office of Fair Trading

Phone: 131 304

Web: http://www.fairtrading.qld.gov.au





WESTERN AUSTRALIA

Consumer Protection

Phone: 1300 304 054 (local call cost only)

Email: consumer@docep.wa.gov.au

Website: www.docep.wa.gov.au





 



We're calling on retailers to sign our Fair Warranty Charter

Help us build pressure for action by sending a letter to your preferred retailer - links below.

One of the key obstacles consumers face in exercising their warranty rights is retailers’ lack of awareness of their warranty obligations. That’s why we have created the Fair Warranty Charter, which sets out the warranty rights that Australian consumers expect when purchasing goods and services. Most of these rights are contained in current law. The Charter also suggests retailers should go beyond their legal obligations, including better staff training and providing customers with a temporary product replacement. 

To pressure retailers to support consumer warranty rights, send a letter to your preferred retailer asking them to sign the Fair Warranty Charter

For retailers: all retailers are welcome and encouraged to adopt the Charter. The Retailer guide to the Fair Warranty Charter explains in more detail retailer responsibilities.

Tell us your story

Share your warranty experience or any comments on how to get the most out of your warranty rights or our Fair Warranty Campaign.

Miriam's story 

When her phone handset broke down, Miriam wrote to us about her dispute with Virgin Mobile. It concerned the replacement of a defective mobile phone provided as part of a contracted plan. Virgin Mobile attempted to repair it three times, but was unsuccessful. Their other responses included asking Miriam to pay to get an upgraded handset, directing her to the manufacturer and telling her she should return the handset for repair — for the fourth time.

Miriam didn’t think any of these options were adequate, as the phone did not seem to her to be of acceptable quality. She didn’t think it was appropriate to be directed to the manufacturer, as her contract was with Virgin Mobile. Nor was a fourth repair attempt acceptable. We agree with Miriam that the appropriate response in this circumstance is to replace the defective phone immediately.

Felipe’s story

Felipe wrote to us about a LG DVD Recorder and Player which he purchased two years ago from the Good Guys for $479. At the time, he was offered an extended warranty of five years which he did not take up. As a pensioner, he could only just afford the unit, but certainly not an extended warranty as well. He expected this equipment to last, on a fully operational basis, for more than two years. One of the features that Filipe liked was the ability to delete ads from programs. This particular feature no longer works as it is supposed to.

He approached The Good Guys in the hope they would be prepared to service the player. They refused to do so, saying that the normal 12 month manufacturer’s warranty had lapsed. Felipe made contact with Consumer Protection in Western Australia. Although they took up the matter with the retailer, they were unable to persuade the Goods Guys to change their position.

We agree with Felipe that the retailer, the Good Guys, has a responsibility to repair or replace the machine, or provide him with a refund, as the machine no longer performs as is reasonably expected. We think that an important feature of a high value product should last for longer than two years. We have sent the Good Guys the Fair Warranty Charter, which summarises retailers' warranty responsibilities to customers. So far, they haven’t signed up. Join us in calling on them, and other major retailers, to sign the Fair Warranty Charter.

Current laws give consumers rights when they purchase goods and services that are faulty.

But there is some confusion about the law. One of the key protections provides that goods should be of ‘merchantable quality’. Essentially this means they should work as a reasonable consumer would expect given the type of goods and the price paid.

This can be quite confusing in practice. The phrase ‘merchantable quality’ is very unclear to consumers. Moreover it is not at all clear how long a consumer can expect their warranty to last. It seems reasonable for a consumer to expect a fridge to work without problems for five years or even 10. On the other hand no one expects a pair of cheap shoes to last that long. We’re also concerned that retailers give consumers the warranty run-around.

There is a clear need for reform of the law to make it easier for both consumers and retailers. CHOICE has welcomed the review of warranties law undertaken by the Commonwealth Consumer Affairs Advisory Committee (which provides advice to the Commonwealth Minister for Consumer Affairs). We also see a need for stronger enforcement action by consumer protection regulators where retailers deny consumer’s rights. CHOICE believes that following reforms are key:

A) Consumers do not adequately understand their statutory warranty rights. To address this information failure:

  • Consumers should receive clear information about their statutory warranty rights at the point of sale, including a clear explanation of how these rights relate to the manufacturer’s warranty and any extended warranties. This could be provided through in-store signage and included with any material promoting extended warranties

B) Consumers often feel pressured to buy extended warranties in store, at the time they purchase the main product.  CHOICE believes Australian consumers should be provided with legislative protection, such as the UK’s  The Supply of Extended Warranties on Domestic Electrical Goods Order 2005. It requires retailers:

  • To provide consumers with a written quote for an extended warranty valid for 30 days.
  • When providing a quote, to give a written explanation of the relationship between the extended warranty and the manufacturer and statutory warranty rights.

C) Consumer warranty complaints are often not resolved due to retailers failing to accept their responsibilities. To address retailers’ and traders’ poor understanding of how warranty laws operate, retailers and traders should:

  • Be provided with information from regulators, clearly explaining their warranty responsibility and rights.
  • Be subject to vigorous enforcement action by regulators in the case of abuse of consumer warranty rights or misleading conduct about rights.

Further, the ACCC and other agencies need to the power to take up a legal matter directly on behalf of a consumer. At present only the consumer can take action to enforce their warranty rights.

D) Inconsistent laws between jurisdictions means Australians have varying warranty rights.

A report prepared for the Productivity Commission Comparison of Generic Consumer Protection Legislation identified the different standards of consumer protection around Australia. CHOICE looks forward to national consistency under the new Australian Consumer Law. We support the Productivity Commission’s view that if standardisation does not occur through the implementation of the national generic consumer law, then at the very least the ability to exclude statutory conditions should be repealed in those jurisdictions that currently allow this. 

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