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ACCC outlines rural consumer guarantee exceptions

Sheep Central, January 29, 2024

AUSTRALIA’S competition regulator is encouraging uptake of consumer guarantee rights when dealing with businesses over defective products or poorly performed services, but notes there are important exceptions for farmers and regional consumers.

The Australian Competition and Consumer Commission said it had more than 28,000 reports and enquiries about consumer guarantees or warranties under the Australian Consumer Law last year.

Motor vehicles, electronics and whitegoods, and homewares were the most reported categories of consumer products about which consumer guarantee or warranty issues were raised with the ACCC.

Almost three-quarters (73 percent) of all contacts from consumers to the ACCC about automotive issues and more than two thirds (68pc) of all electronics and whitegoods contacts last year related to consumer guarantees.

“When you buy a product or service from a business, you have automatic rights called ‘consumer guarantees’ under the Australian Consumer Law and they exist regardless of any warranty offered by the business,” ACCC deputy chair Catriona Lowe said.

“Even if a voluntary warranty, manufacturer’s warranty, or extended warranty has expired, you may still be able to use your consumer guarantee rights under the Australian Consumer Law, which don’t have a specific expiry date.”

Business use consumer guarantees are limited

However, and ACCC spokesperson said for farmers and other regional businesses, a product or service bought for business use will not be covered by consumer guarantees unless it meets at least one of the following conditions:

    • it costs less than $100,000 including GST
    • it is a product or service commonly bought for personal, domestic or household use
    • the good is a vehicle or trailer that is used mainly to transport goods on public roads.

The spokesperson said even when meeting one of these conditions, a product is not covered by the consumer guarantees when it’s purchased for resupply; for use or transformation in production or manufacturing, or; to repair or treat other goods.

The ACCC has a pre-purchase checklist for buyers of agricultural machinery, which provides relevant information including the application of the Australian Consumer Law and more information is available on the ACCC website.

Ms Lowe said consumer guarantees apply for a period of time that is considered reasonable having regard to the nature of the products or services, including the price paid.

“This might be longer than the period of any warranty provided by a retailer or manufacturer.

“Broadly speaking, you are guaranteed that the product you have purchased will be of acceptable quality, match its description and do what a business tells you it can do. If it doesn’t, you are entitled to a free repair for a minor problem, or a replacement or refund for anything major.”

“For example, the car radio not working might be a minor problem, while the brakes not working due to a manufacturing fault would be a major problem,” Ms Lowe said.

The acceptable quality guarantee includes that products will be as durable as a reasonable consumer would regard as acceptable for that product. What is reasonable for the durability of a product will depend on things like the type of product, the price, and how it is likely to be used.

The ACCC has taken enforcement action against several companies in recent years for misleading consumers about their consumer guarantee rights, and more investigations are currently underway to address misleading practices and deter businesses from doing the wrong thing.

“Businesses are reminded that it is unlawful to give customers false or misleading information about their consumer guarantee rights. Where consumer guarantee rights apply, consumers are entitled to the remedies provided by the Australian Consumer Law,” Ms Lowe said.

She said if a product develops a major problem, consumers should let the business know that they think there is a major problem with it under the consumer guarantees in the Australian Consumer Law.

“They can tell the business they are rejecting the product, state what remedy they would like, and explain why they think there is a major problem.

“We know that many people don’t feel sufficiently knowledgeable or confident to challenge a business when they believe something they have purchased isn’t of acceptable quality,” Ms Lowe said.

“Information about people’s consumer rights is available online. This includes information about contacting a business to fix a problem and a complaint letter tool to help consumers prepare a written complaint. If you can’t resolve the issue after contacting the business there are organisations that may be able to help individuals to resolve a complaint.”

“The ACCC and state and territory consumer protection agencies will also continue to take action against businesses that misrepresent consumers’ rights under the law,” Ms Lowe said.

Currently, the consumer guarantees provide a private right enforceable by consumers. The ACCC and state and territory consumer protection agencies can take action if a business misleads a consumer about their entitlement to a remedy, but this action does not directly deal with the core issue of businesses not providing the remedies consumers are entitled to under the consumer guarantees.

Common statements that may be misleading

Here are some statements to watch out for, and an explanation of what consumers’ rights are.

  • Your product is out of warranty, so we can only repair it for a fee.

This isn’t right. Consumer guarantees are automatic and are separate from any voluntary warranty, manufacturer’s warranty, or extended warranty. Consumer rights can last longer than warranty rights, and you can ask for a repair, refund or replacement after the warranty has expired.

  • No refunds under any circumstances.

This isn’t right. If your product has a major problem, under the consumer guarantees you have a right to choose a refund.

  • To be eligible for a refund, you must return the product within 10 days. Refunds are not available under any circumstances after this time.

This isn’t right. Businesses can’t apply a time limit on your rights to notify them or return a faulty product.

  • You will need to contact the manufacturer to have this issue resolved.

This isn’t right. As a first step you should contact the business that sold you the product to explain the problem. The business can’t refuse to help you by telling you to contact the manufacturer.

  • If you don’t buy the extended warranty, you’ll have no protection once the 12-month warranty expires.

This isn’t right. Consumer guarantees are separate from any warranties, and they may still apply after a warranty has expired.

  • We understand your concern that if you were made aware about this fault beforehand, you would not have purchased the product. We can offer you 50 per cent of the original purchase price as a goodwill gesture.

This isn’t right. If your product has a major problem, a refund should be the full amount you paid.

  • The damaged item must be returned in its original packaging to receive a refund.

This isn’t right. If your product is faulty, you don’t have to return the product in its original packaging to seek a refund.

  • We identified the screen is cracked on your product. The warranty doesn’t cover damaged screens, so we can’t help you today.

This isn’t right. Even if your voluntary warranty, manufacturer’s warranty, or extended warranty doesn’t cover the specific problem, it may still be covered under the consumer guarantees.

What to do if a business doesn’t meet a consumer guarantee

As a first step, consumers should contact the business directly, and it can be useful to set out the complaint in writing.

Businesses are allowed to ask for a receipt or another form of proof of purchase.

If contacting the business does not resolve the issue, as a second step, consumers can contact their local state or territory consumer protection agency about their rights and options. These agencies may be able to help negotiate a resolution with the business.

If consumers see a false or misleading statement about the consumer guarantees, they can report it to their local state or territory consumer protection agency and the ACCC. Reports from the public inform the ACCC’s compliance and enforcement work.

Further information on consumer rights is available at consumer rights and guarantees. The ACCC also has further information about contacting a business to fix a problem, and where to go for consumer help.

The nine consumer guarantees that apply

The ACCC said there are nine consumer guarantees that apply to products. They include guarantees that a product sold to a consumer must be of acceptable quality, fit for any stated purpose, and match its description.

The three consumer guarantees that apply to services are that businesses must undertake them using an acceptable level of care and skill, they must be fit for any stated purpose, and they must be supplied within a reasonable time.

Businesses may offer or sell other warranties, but these are extra promises that a business can choose to make in addition to the consumer guarantees. A warranty cannot replace, change or take away a consumer’s basic legal rights.

Depending on the nature of the problem, remedies can include a refund, a repair or replacement, providing the service again free of charge in a way that meets the consumer guarantees, and/or compensation for reasonably foreseeable loss or damage caused by the failure to meet the consumer guarantee.

Consumer guarantees do not apply if the consumer simply changed their mind, found the product cheaper somewhere else, or decided they no longer liked it or had no use for it. Consumer guarantees also do not apply if a consumer misused the product in a way that caused the problem, or knew of, or was made aware of, the fault before buying the product.

The ACCC continues to advocate for law reform to the consumer guarantees provisions that would make it illegal for:

  • businesses to fail to provide a remedy for consumer guarantees failures, when they are legally required to do so under the consumer guarantees, and
  • manufacturers to fail to reimburse suppliers for consumer guarantees failures that the manufacturers are responsible for.

These amendments would significantly change business incentives to comply with their consumer guarantee obligations under the Australian Consumer Law, as well as more effectively supporting consumers in securing their statutory consumer guarantee rights.

Consumers who wish to contact the ACCC about an issue they are experiencing can report a consumer issue online. The ACCC does not resolve individual disputes about a consumer’s rights to a repair, replacement or refund. Consumers seeking assistance with a dispute should contact their local state or territory consumer protection agency.

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