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5 July 2018

Extended warranties land PB Tech in court

The electronics retailer has pleaded guilty to 14 charges related to sales of its extended warranties.

Electronics retailer PB Technologies (PB Tech) has pleaded guilty to 14 charges related to sales of its extended warranties.

The charges, brought by the Commerce Commission, alleged PB Tech didn’t give customers information about their Consumer Guarantees Act (CGA) rights and how they compared with those offered by the extended warranty.

The company also failed to give customers a copy of the warranty agreement or inform of their cancellation rights.

The charges relate to warranties sold between May and November 2017. PB Tech will be sentenced in Auckland High Court in September.

The commission also warned PB Tech about “bait” advertising. Last year, it promoted Apple watches at sale prices in an email to about 100,000 people, despite only having 14 available at those prices. While a “strictly limited stock” statement was included, it wasn’t near the Apple watch advertising.

The commission viewed this as a potential breach of the Fair Trading Act.

“PB Tech admitted that it knew the watches would sell out and two complainants told us that they sold out in the first few minutes of the sale. Businesses must remember they should have reasonable grounds for believing they can supply the goods in reasonable quantities when they advertise them for sale,” commissioner Anna Rawlings said.

Your rights

When a retailer offers you an extended warranty, they must give you information about your existing legal rights under the CGA. If you decide to buy a warranty, you’ll have a “cooling-off” period of 5 working days to cancel and get a refund if you change your mind.

The front page of the warranty agreement must include:

  • A summary of your rights and remedies under the CGA.
  • A comparison of these rights with the extra protections offered by the warranty.
  • A summary of your right to cancel the agreement.
  • The warrantor’s name, street address, phone number, and email.

All the terms and conditions of the warranty must be included in the agreement, including the duration of the warranty, and whether it expires when a claim is made.

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