The Australian Competition and Consumer Commission has filed legal proceedings in the Federal Court against Fisher & Paykel Customer Services Pty Ltd (Fisher & Paykel) and Domestic & General Services Pty Ltd (Domestic & General) for making allegedly false or misleading representations concerning consumers’ rights under the statutory guarantee regime in the course of offering an extended warranty.
“This is an important case for the ACCC as the allegations involve false or misleading representations by businesses about consumers’ statutory rights in the context of offering extended warranties,” ACCC Chairman Rod Sims said.
“Shoppers should realise that under the Australian Consumer Law (ACL) they may have a right to a repair, replacement or refund beyond the time period covered by the manufacturer’s warranty. While some extended warranties may offer protection over and above that provided by the ACL, they do not replace the underlying consumer guarantees.”
The ACCC alleges that Fisher & Paykel and/or Domestic & General, either on its own behalf or acting as an agent of Fisher & Paykel, sent letters to consumers who had purchased a Fisher & Paykel appliance, inviting them to purchase an extended warranty.
It is alleged that the letters contained a number of false or misleading representations about consumers’ statutory rights, including, for example, that the consumer would not be protected against repair costs for the appliance after the expiry of the manufacturer’s warranty unless the consumer purchased an extended warranty.
“Businesses should exercise caution when offering extended warranties to consumers, and must avoid misrepresenting or understating consumers’ statutory rights under the ACL consumer guarantees, as well as overstating the value or additional rights (if any) provided to consumers by the extended warranties being offered,” Mr Sims said.
The ACCC alleges that the conduct of Fisher & Paykel and Domestic & General breached sections 18 and 29 of the ACL and is seeking pecuniary penalties, declarations, injunctions, orders for compliance programs, and costs. The proceedings also involve alternative allegations under the consumer protection provisions of the ASIC Act, on the basis that the extended warranty plan offered may constitute a financial product and that, by offering the plan, Fisher & Paykel and/or Domestic & General were offering to provide financial services.
Background
The ACL gives consumers a set of rights called consumer guarantees for all goods purchased on or after 1 January 2011. These include a guarantee that goods will be of acceptable quality.
Where goods fail to comply with the consumer guarantees, consumers may be entitled to a refund, repair or replacement. These rights cannot be excluded, restricted or modified.
In 2012, the ACCC embarked on a national consumer guarantees awareness raising campaign called ‘If it’s not right, use your rights. Repair, replace, refund’
The ACCC continues to work with state and territory consumer protection agencies to address areas of concern in relation to extended warranties. A national project on extended warranties, began in late 2012. The aims of the project are to:
- investigate extended warranties to see whether they offer any benefits above those provided by the ACL; and
- educate consumers to ensure that they are aware of their rights and can make an informed decision about whether to purchase an extended warranty.