The case of the rusty heat pump.
Sue Cutmore paid nearly $3000 for her heat pump. It was sold with a five-year warranty – but six years after it was installed, the external unit was so rusty it was in danger of falling off the wall of Sue’s house.
The Auckland supplier who sold the appliance told Sue it wasn’t obliged to do anything about the problem.
Sue took the company to the Disputes Tribunal. She claimed it had breached the Consumer Guarantees Act (CGA) by supplying a heat pump that was insufficiently durable. We estimate the life span of a heat pump to be 10 to 15 years. Sue used this estimate to argue the six years she’d got out of her appliance wasn’t reasonable.
The tribunal agreed. The referee accepted that a heat pump should last at least 10 years and found that the supplier – which didn’t appear at the hearing – had breached the “acceptable quality” guarantee of the CGA.
The referee also held that if the company believed rust was a risk, it should have told Sue this before installing the heat pump. It serviced the unit twice after it was installed but the referee accepted Sue’s evidence that it failed to check the external unit or apply rust inhibitor on either visit.
The tribunal ordered the company to pay Sue $1200, 40 percent of the original purchase price. The referee reasoned Sue had got six years’ use out of the heat pump and, on that basis, it would be “unreasonable” to award her the full replacement cost.
But we think Sue was entitled to a full refund. That’s because the CGA doesn’t give a supplier or retailer the right to “off-set” the consumer’s use of a good. The Act is clear: if a good has a major fault, the consumer can opt for a refund.
The hitch is that the Disputes Tribunal isn’t bound by the letter of the law. Tribunal referees are required to make decisions according to the substantial merits and justice of the case: they must have regard to the law but aren’t “bound to give effect to strict legal rights or obligations”.
Sue says she’s pleased she won the case – and even more pleased the company has paid up. She’s hoping her next heat pump won’t give her so much grief.
More from consumer.org.nz
- Consumer Guarantees Act - our guide to your rights
- Disputes Tribunals - how they work
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I have two Panasonic heat pumps that are 4 years old. The lid of the outdoor case rusted from the insude out due to a poor paint job. Panasonic through their local retailer have replaced on both units and rust inhibited generally inside as well as replaced plated steel screws with Stainless steel. While not happy with their quality control at the manufacturing point, they have promptly taken remedial action at no cost.
I also agree with all the other comments, if you tell us this, Consumer, you need to tell us the supplier and brand, model number. Most of us would avoid this supplier as they don't stand by their products. Whose side are you on? I know one thing, it's not a Fujitsu brand, as they guarentee their products for 6 yrs, not the normal 5 for other brands. Not a complete story, Consumer, we have come to expect more from you.
Why does your report protect the identity of the supplier and/or product? As a member of Consumer, I expect to be not only informed of such problems with a product, but also what that product is and the suppliers identity.If a company has such little regard for their customers, that they are forced to respond only when taken to the disputes Tribunal, then I want to avoid any possible dealings I might have with that company, but so long as they remain anonymous-how can I?
There's not much point in telling everyone about this problem if you don't tell us what brand she bought. By not telling us you are protecting a shoddy manufactured item and the only way to stop people selling substandard items is to let us know who manufactures them.
We have a right to know.
Why was info about the brand, make and model withheld?
How do you know a heat pump will only last 6 years until 6 years have gone by? If she had known at the start, she would have bought another heat pump. Why should the heat pump seller get to rip people off with crappy heat pumps provided they fail slowly?
You may be right that the CGA does not give the right for a seller to "offset" the consumers' use of a good. But we are talking about fairness here! Should the consumer expect 6 years' free use of the good? This is what you are effectively advocating. Based on your estimated life of up to 15 years, and on your "nil offset" view, the consumer could get 14 years use entirely free. Get real!