Deal sites can’t escape consumer law

A GrabOne customer who ended up with a faulty iPhone from the site is the latest unhappy shopper to contact our advisory service.

GrabOne told the customer it was only an “advertising agent” that promoted goods and services on behalf of independent traders. It would liaise with the company which had listed the faulty phone but said responsibilities for a remedy rested with this trader, not GrabOne.

However, Consumer adviser Maggie Edwards believes GrabOne’s advice risked misleading the customer about her rights under the Consumer Guarantees Act (CGA).

“When you buy goods from a daily deal site, you’ve got the same rights you have when you buy from any other trader. The sites aren’t just advertising products. They’re acting as agents for the company supplying the good. The CGA applies to agents as well as suppliers,” Maggie says.

In practice, this means if a product isn’t of acceptable quality you can ask either the deal site or the supplier to put things right, she says.

“The same applies if you buy a voucher for services from a deal site. If the voucher isn’t honoured, you’re entitled to ask the site to provide a refund,” Maggie says. If the daily deal site claims it has no responsibility, it risks breaching the Fair Trading Act (FTA) by misleading consumers about their rights.

In response to our inquiries, GrabOne said it took its CGA obligations as an agent seriously and acknowledged the email sent to the customer had caused “some confusion”. It said it would be “reviewing our communications sent by our after-sales support team to make sure our message is clearer”.

The company said it was “confident any customer that reports a valid issue or fault receives a satisfactory resolution, whether from the seller or from GrabOne as the agent”.

Daily deal sites continue to attract complaints to the Commerce Commission. In its latest Consumer Issues report, the commission lists several deal sites among the most complained about online traders. In 2015, it received 26 complaints about GrabOne. Other deal sites on its list were Dr Grab NZ (36 complaints), ChocoPrice (30 complaints) and Groupon (15).

Legal points

• Companies risk breaching the FTA if they mislead consumers about their legal rights.
• Daily deal sites have obligations under the CGA to ensure the goods and services they sell meet the Act’s requirements. This means goods must be of acceptable quality and delivered on time; services must be performed with reasonable care and skill.
• If you buy from a daily deal site and the product falls short of these requirements, you’re entitled to ask the site or the supplier to put things right. Where the failure is substantial, you can request a refund.