Extended warranties can be a waste of money

This announcement is for: 
Consumer

Consumer Protection has seen an increase in enquiries and complaints about extended warranties, prompting a seasonal warning for Western Australians.

Between January and November 2014 there were 695 enquiries and 69 formal complaints – up from 576 enquiries and 48 complaints between January and November 2013. It is a trend that is likely to continue.

Post-Christmas sales or deals mean that many WA consumers will be considering purchases including white goods, electronics and new cars.

Acting Commissioner for Consumer Protection Gary Newcombe is urging shoppers to take a long look at any extended warranty offer before saying yes.

“The fact is that products are automatically guaranteed, in a number of ways, under the Australian Consumer Law (ACL) and an extended warranty can result in you paying for repair or replacement rights that you are legally entitled to for free.

“Any product or service purchased from a business must:

  • not be faulty;
  • be fit for the intended purpose;
  • match any description or sample; and
  • last a reasonable amount of time depending on what it is and how much was paid for it.

“If a $3,000 television comes with a one year manufacturer’s warranty and something goes wrong after 18 months, you will still be able to seek a remedy from the retailer by exercising your Australian Consumer Law rights because it is reasonable to expect an expensive TV to last longer than 12 months.”

Mr Newcombe reminds consumers they also have the right to ask questions and that the sale of an extended warranty on the basis that it will take the hassle out of getting a replacement product is simply not good enough.

“Sometimes a retailer or salesperson may try to convince you that you need to purchase an extended warranty to get a solution if a fault occurs after the ‘manufacturer’s warranty’ expires. You need to make sure that you are not buying an insurance policy for a scenario that consumer law already covers, without you having to pay extra money.

“You should press for a clear explanation of the benefits an extended warranty offers that are over and above what you are entitled to under the ACL. Experience tells us these ‘additional benefits’ are often minimal or even non-existent, and shop staff may not understand the store’s legal obligations. For example, we frequently hear of retailers trying to make customers deal with the manufacturer directly when in fact the retailer should do this on the consumer’s behalf.

“Consumer Protection’s free app iShopWA is available for iOS and Android devices and is a great resource for consumers and businesses alike. I would thoroughly recommend downloading it to have consumer law information at your fingertips, especially to prove a point if there is a dispute at the till.”

Further information about consumer guarantees, extended warranties and iShopWA is available on the Consumer Protection website: www.commerce.wa.gov.au/consumerprotection

Enquiries can be made by calling 1300 30 40 54 or emailing consumer@commerce.wa.gov.au

 

Media Contact (Consumer Protection)

Consumer Protection
Media release
30 Dec 2014

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