Take longer to think over extended warranties

Information status

All announcements issued prior to 1 July 2017 were issued by the former Department of Commerce. Announcements listed here are the latest versions available, but may be subject to review. For more information on this announcement, please contact online@dmirs.wa.gov.au.

The extended warranty practices of Australian retailers have been examined by consumer protection agencies, including Consumer Protection.

Commissioner Anne Driscoll said the joint operation undertaken during 2013 involved 141 retailers nationally, including 15 in WA.

The work built on a previous national project which saw consumer protection agencies closely look at practices of traders in relation to whether they honour the ‘Consumer Guarantee’ component of the Australian Consumer Law.

“Manufacturer’s warranties often only last a year, and many retailers sell extended warranties to cover subsequent years,” Ms Driscoll said.

“However, a consumer’s rights under the Australian Consumer Law means a product must last a reasonable amount of time and perform at a reasonable standard, given factors including its nature and cost.

“The national operation focused on retailers who commonly sell extended warranties with their products, such as whitegoods, electronics and new cars.

“While all 15 retailers checked in WA were found doing the right thing, some national retailers need to lift their game with investigations continuing into nine traders in other states and territories and enforcement action taken against one.”

The Australian Competition and Consumer Commission recently initiated action against some major retailers and manufacturers for allegedly misleading consumers about their refund rights.

“Consumers need to be aware that their legal rights often outstrip what retailers are trying to sell in an extended warranty,” Ms Driscoll said.

“Just because the manufacturer’s warranty on a $3,000 television expires after one year doesn’t mean you have to buy an extended warranty.

“The law protects your purchase because it’s reasonable to expect an expensive television to last longer than a year, even if you don’t buy an extended warranty.

“Make sure you are not buying a warranty for something the law already protects you from.”

Consumer Protection welcomes recent independent scrutiny of the extended warranty practices of a number of large Australian retailers by consumer group CHOICE and looks forward to examining the outcome of CHOICE’s investigations.

State and territory consumer protection agencies will continue to work with retailers to address any systemic problems, including consideration of a standard point of sale sign to provide accurate information to consumers about extended warranties.

Ms Driscoll said in Western Australia there was a new area being focussed on. “Here in WA we are now looking at the issue of aftermarket or extended warranties in the used car market – policies that provide limited benefits and are oversold in dollar terms,” she said.

“We believe consumers are paying way too much for products that often only offer minimal extra protections compared to the protections that we all benefit from for free through consumer law.”

More information on consumer guarantees and extended warranties is available from www.commerce.wa.gov.au/consumerprotection

A previous media statement on this issue can be found at: www.commerce.wa.gov.au/announcements/extended-warranties-may-not-be-warranted

END OF RELEASE

(Consumer Protection is a division of the Department of Commerce)

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Media Contact:
Alina Cavanagh  9282 0679 or 0423-846397  alina.cavanagh@commerce.wa.gov.au

 

 

 

Consumer Protection
Media release
11 Dec 2013

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