Extended warranties

Are you being served or served up when offered an extended warranty?
 
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  • Updated:12 Nov 2008
 

03.Statutory rights and wrongs

If you have a problem with a product, check if it is covered under the manufacturer’s warranty. If not, and you feel you are covered under a statutory warranty (see Three types of warranties), the first port of call is to the retailer. If it’s not possible to resolve it there, you’ll need to contact the office of consumer affairs or fair trading in your state. It may then get referred to the small claims tribunal.

Kay Ransom, Chair of the NSW Consumer, Trader & Tenancy Tribunal, says that most general consumer claims only take about four weeks to be heard, and about 80% of cases are resolved to both parties’ satisfaction.

However, Gerard Brody from the Consumer Law Action Centre says there are problems with enforcing statutory law and it can be arduous for consumers who are required to do most of the footwork. “Often that involves a cost and if it’s a small item, it might not be worth all the effort.”

Most experts we spoke to agree it is a confusing area to understand. However, new initiatives are being considered. The National Education and Information Advisory Taskforce is a working party made up of each state’s fair trade regulators, and its task is to improve consumer awareness and the process of using statutory rights.

In the meantime, NSW Fair Trading Minister Virginia Judge says consumers shouldn’t be afraid to invoke their rights as they now stand. “If a product is faulty you are entitled to seek a refund. It’s important for people to know what their rights are and what course of action they can take if they need. It’s your right as a consumer.”

Your statutory rights

Under Australian law, all goods (except goods at auction) are covered by a statutory, or implied, warranty. This means the product you buy should be of “merchantable quality”; that is, it should meet the basic level of quality and performance expected, considering its description, price and other relevant circumstances.

In the case of a major TV purchase you are entitled to a refund if, for example, it develops a serious fault after 15 months when it can be expected that a TV should last at least 10 years. However, a consumer would probably be more than satisfied with a two-year run from a $10 watch, but not if it cost $2000.

If a product fails to live up to these expectations and can’t be rectified within reasonable time limits, you’re entitled to seek to have the contract cancelled, return the goods and get a refund.

Under a statutory warranty, any problem you have with a product is the seller’s responsibility, not the manufacturer’s. If you have a problem refunding or exchanging an item and you have tried but failed to negotiate with the retailer, contact the fair trading office in your state for help and advice.

 

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