Grant Cornelius in front of his new Fisher & Paykel fridge.

Grant Cornelius in front of his new Fisher & Paykel fridge.

Retailers tout extended warranties as protection if anything goes wrong with your new purchase. In most cases, you're paying for cover you already have.

Grant Cornelius bought a $4300 fridge with a five-year extended warranty from retailer Noel Leeming. When the fridge broke down, the store told Grant to contact Fisher & Paykel and get the problem fixed under the manufacturer's warranty.

Grant's fridge had to be repaired at least five times over a four-year period. For the first two years, Fisher & Paykel did the repairs for free. Grant then had to pay. Fisher & Paykel eventually offered him a new fridge on a pro-rata basis. But it withdrew the offer when it learnt Noel Leeming had sold the appliance with an extended warranty.

So Grant decided to call us. Consumer adviser Maggie Edwards says the fridge obviously had a serious fault. Under the Consumer Guarantees Act (CGA), it's the retailer's responsibility to provide a replacement or refund when a product has a major defect. Maggie advised Grant to contact Noel Leeming's head office and ask for a replacement fridge. She also got in touch with the company.

Within a few days, Noel Leeming had arranged a new fridge and Grant has since been reimbursed for his expenses. Mark Conelly, Noel Leeming's chief financial officer, told us the company would have acted sooner if it had been aware there were ongoing problems with the fridge. It says Fisher & Paykel never told it about the numerous repairs.

What should have happened? Fisher & Paykel was obliged by the conditions of its 24-month manufacturer's warranty to repair the fridge. But when it became obvious the repairs hadn't fixed the problem and the fridge had a major fault, Grant was entitled to make a CGA claim against the retailer for a replacement or refund and for consequential losses.

Both companies could have done a lot more to inform Grant of his rights. As for the extended warranty, it's hard to see it was worth paying for. The CGA already had Grant covered.

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Design Life Posted by: Lindsay Hunter 15 Feb 2011 8:58am

It is almost certain that all manufactured products have a design life, ie a life expectancy that is part of the design parameters so that all the components will last long enough to protect the manufacturer and satisfy the consumer enough to enable ongoing sales. Clearly car manufacturers do it, and will have good data on the actual life. The problem is converting that into time rather than use.

That may mena the a dishwasher will not last 10 years but 365 by 10 cycles, equals say 4000 cycles. And the electronics record the cycles as they do on computer printers ( eg HP) etc. The design life would reduce the debate over what is a reasonable life, and would also enable the manufacturer to make quality claims based on proven longevity?

Rights Posted by: Bobs 03 Feb 2011 6:51pm

I think your comment "Both companies could have done a lot more to inform Grant of his rights." is unfair & misleading. F&P stood by Grant then only stepped aside when it was obvious that Grant was not the loser because he had an extended warranty.(i.e. Noel Leeming or their insurer catches the loss then negotiates with F&P. There is nothing in the article to show Grant ever told Noel Leeming (after the initial problem) that he was still having problems 3 or 4 years later. Surely the onus is on him to advise Noel Leeming after the F&P warranty expires ? Or are you expecting retailers & manufacturers to have psychic powers ? Or have you left out some relevant details ?
I agree extended warranties are worthless (except as a revenue tool for the salesperson & company)

Article title misleading? Posted by: Auckconsumer 03 Feb 2011 2:38pm

I'm a little confused about your article. Grant appears to have an issue with Fisher & Paykel product which initially was fixed under manuf warranty but when F&P discovered there was an extended warranty withdrew their offer of replacement.

In other words Grant didn't even make a claim under the extended warranty. But the title of your article is "Extended warranties are no guarantee".

Shouldn't the article be called "Demand your rights under the CGA"?

CGA. Posted by: Andreas Kubisch 03 Feb 2011 1:31pm

I got very good advice on the subject from the good people here at Consumer.org

Now all it usually takes is to remind retailers of the kind of fines that are in store for "misleading customers as to their rights under the CGA" and they fall into line just like that - worked for me 3 times so far (;o)

Noel Leeming and CGA Posted by: Annette Clennell 03 Feb 2011 10:03am

I would hesitate before making sweeping comments regarding specific retailers and CGA as I think it varies not only between retailers but from store to store within one company as well. I have had the exact opposite from Noel Leeming in Lower Hutt a couple of times over the past 10 years and have found they have always known their obligations under the act and in some cases have provided me with rental appliances free of charge while problems have been remedied. (In one case the washing machine was 6 months out of the 2 year warranty and I ended up with a new one as per my article which appeared in Consumer many years ago as a positive example of a retailer doing the right thing). I have also found that as all retailers will match each others prices and deals etc, I do not shop around as such, but find the best deal then get Noel Leeming to match it. Because I have build up a relationship with them over the years and remained loyal to them I now don't even have to ask and I get quoted better deals than the best deal offered by any other retailer at the time for paying cash and due to my loyalty and the relationship I have built with them, if ever and/or whenever I have a problem with any purchase from them I get immediate and amazing service. It reminds me of the after sale service you used to get from the small mum and dad businesses of yesteryear. I think in today's economic climate people shop around and don't remain loyal (understandably) because of all the competition and good deals to be had and because of that, unfortunately, large retailers seem to focus more on getting the sale and your dollars away from their competitors rather than looking after and keeping existing customers they have. My view is and has so far been proven right that if you remain loyal and/or can build a good relationship with one retailer it is a win/win situation as they know they will get your repeat business if they match any deal and look after you after the sale.

JB HIFI do not honour CGA! Posted by: Daniel McCarthy 03 Feb 2011 9:01am

40 inch LCD TV broke down within waranty period (extended 2 year warranty taken) When we first called JB they said to bring it in, so we brought it in and they told us to call Lumley (the insurance company that underwrite their warranty scheme).

Called Lumley - 2 days after the warranty date expired and was told no claim can be lodged (even though the fault happened weeks prior to the warranty expiring).

Went back to JB. The store manager made it clear that they don't have to do anything (ignoring the CGA and saying the law is "One big grey area") and we would have to pay for the repair report to identify the fault.

Anyway the fault has been confirmed and they have had the TV for 8 weeks. They still have not said if it can be fixed and have not offered anything.

We think that more than 8 weeks to fix (still have not quoted for the repair) a tv is an unreasonable amount of time.

Should we ask for a full refund or replacement? I think we should, but getting it from JB will probably take a trip to Disputes Tribunal.

There is no head office to call.
JB hifi dont care about after sale service - just the SALE.

Noel Leemings Posted by: Darren James 03 Feb 2011 6:24am

I have one bit of advice...DON'T buy from Noel Leemings. I had a sim ilar issue when I had a laptop repeated breaking down withing 2 months of purchase. Despite purchasing a 3 year warranty,they refused to deal with it and told me to take it back to the manufacturer, 5 times in all. When I informed them of my rights under the CGA I was told "we don't worry about that."
I then spoke to someone who told me they were the Store Manager who advised me to "take us to Court if you don't like it", and told me to leave the store.
By from Noel Leemings at your peril.

CGA. Posted by: Bruce 02 Feb 2011 7:52pm

It is surprising the number of people that do not know or understand the CGA. They think that a 12 month warranty is 12 months, end of.

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