Unwarranted warranties
We need to recognise and penalise grasping deception among retailers when it happens. It’s bad enough when we strike rule-breaking missteps from outfits that plainly should have known better. This deserves measured penalty. But worse are the cases where the business is wilfully disregarding rules because it works out financially rewarding to do so, factoring in the need to back down when confronted, or even suck up the very occasional punitive consequence.
A case in point; extended warranties. Often these are a rotten idea because you’re paying for protections you already have under the Consumer Guarantees Act.
To confront this the law changed in
2014 to required anyone selling these warranties to make clear to the customer the difference between what they’re paying for, and the rights they already have. (And, for that matter, a cooling off period to reconsider whether it’s what they really want).
The IT retailer PB TEch has been fined $77,000 for failing to provide such information. Hefty fine? Before you answer, consider this. It had sold 4000 of these extended warranties.
PB Tech said it was unaware the law had changed. Quite a feat of inattention, then.
The kindest interpretation that can be put on this is that the company was shockingly inept rather than actually malicious. Some may feel nudged towards that charitable view by the apparently serious declaration that it has now ‘‘established a relationship with a law firm’’.
In any event, Consumer NZ is adamant we have retailers who are truly calculating offenders. In such cases, a couple of things need to happen. The sting of the penalties should be reconsidered. But let’s also start to get much better at standing up for ourselves. Outfits that are – however inadvertently – making out like bandits offering crappy deals to inadequately informed buyers needs to be confronted by stony and widespread consumer reproach as well as official sanction.
Sentencing PB Tech, Judge E M Thomas noted that extended warranties and policies were ‘‘renowned for their exclusions and limitations’’.
True that. In which case, surely, such deals have an element of misdirection for the uneducated customer who might assume them’s the rules.
But whatever deal has been struck with the retailer, and whatever the warranty from the manufacturer may be, the law may require better on the basis the buyer has a right to expect the purchase would last for a reasonable amount of time without misuse. You can be outside a declared warranty period and still within an acceptable lifespan.
In some cases, extended warranties may actually be worth the money. Like if you place great value on not being without whatever you’ve bought (often electronic) even for the time needed to repair it.
What’s more, most of us don’t enjoy having to reproachfully invoke our rights, even when we’re palpably in a position to do so.
But we should all play our part in ensuring that law is enforced. If you’re not given clear information on the difference between the warranty offer and the rights you have anyway, do everyone a favour: blow the whistle.
The sting of the penalties should be reconsidered. But let’s also start to get much better at standing up for ourselves.