Dec 23, 2009

Warranty warpath

The law says customers can demand faulty goods be replaced or repaired well beyond the 12-month warranty.

It's worrying that many Christmas shoppers don't know their rights when it comes to warranties and refunds but, even worse, 57 per cent of retailers apparently have no idea, either.

Instead, consumers are being fobbed off when products break and urged to buy "extended warranties" that provide protection they're entitled to anyway.

According to the recent National Baseline Study on Warranties and Refunds, one in two shoppers aren't aware they have any rights beyond what's promised on a product's warranty card.

Also, the study - commissioned by consumer protection agencies across the country - found 57 per cent of retailers and 47 per cent of manufacturers have no idea that consumers have any rights beyond the common 12-month manufacturer's warranty.

The reality is that, regardless of the length of warranty offered by the manufacturer, Australian consumers have the protection of a "statutory" or "implied" warranty under the federal Trade Practices Act.

In essence, the law says consumers have the right to a refund, replacement or repair if the product doesn't last as long as one would reasonably expect, bearing in mind its cost. The law also says a product must be of "merchantable" quality and fit for its purpose.

The trick is, the act doesn't set any time periods. What constitutes a "reasonable" time depends on the nature of the product, its age and quality and how much was paid.

"This reflects the reality," says the deputy chairman of the Australian Competition and Consumer Commission, Peter Kell. "You'd have different expectations of an inexpensive toaster compared with an expensive TV set. It would be difficult to imagine the same warranty period applying to both."

Similarly, the statutory warranty on a second-hand vacuum cleaner wouldn't be the same as the implied warranty on a new one.

Kell says that what's reasonable may at times be a source of disagreement between the consumer and the retailer but the ACCC's experience is that problems tend to emerge "fairly early on, well within any 'reasonable' period".

However, a spokeswoman for the consumer group, Choice, Elise Davidson, says it's a problem that the statutory warranty involves a subjective judgement about what's reasonable.

"People need clear answers but unfortunately ... there's no formula," she says, giving the example of a West Australian man who recently contacted Choice about a $500 DVD recorder that stopped recording programs after 18 months

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