Consumer NZ member Jenny Hare has got a refund and apology from appliance store Noel Leeming after she was sold an extended warranty she didn’t want or need.
Jenny went to Noel Leeming to buy a Freeview box for her TV. The sales rep told her the one she picked cost $110 and came with a three-year warranty. It wasn’t until she looked at the receipt a couple of days later that she discovered the box cost $95 and she’d been charged an extra $15 for an extended warranty.
The $15 price tag didn’t rankle as much as the feeling she’d been duped into purchasing the warranty by the sales rep. “I would never have knowingly bought the warranty because I know I am covered under the Consumer Guarantees Act,” Jenny said.
Our research has found extended warranties have been heavily promoted, often by staff with sales targets to meet. Retailers promote these warranties as providing after-sales protection in the event a product is faulty. But the Consumer Guarantees Act (CGA) already delivers this protection.
Tougher rules clamping down on warranty sales were introduced in 2014. The rules require stores to provide a written warranty agreement that contains a summary of your legal rights to a remedy when a product isn’t of acceptable quality. Jenny wasn’t given this information.
I would never have knowingly bought the warranty because I know I am covered under the Consumer Guarantees Act.
Nor was she told about her right to cancel the warranty and get a refund, information the sales rep was required to disclose under the Fair Trading Act.
Noel Leeming refunded the $15 when Jenny went back to complain but she says the sales rep didn’t accept the store had done anything wrong. It was only after our adviser Maggie Edwards contacted the company’s head office that Jenny got a written apology for the “misinformation”.
Noel Leeming told Jenny: “we sincerely apologise for what occurred in store, both at the time of sale and when you returned … We take pride in providing our team with adequate training to ensure they can provide the level of service expected of them. It is disappointing to hear that this has not occurred.”
The store acknowledged the warranty should have been discussed prior to purchase and Jenny should have been told about her right to cancel. It said the matter had been raised with the store manager and a training session has since taken place. The matter has also been brought to the attention of its national customer service manager.
If a retailer sells an extended warranty, it must give you information about your legal rights under the Consumer Guarantees Act. If you buy the warranty and then change your mind, you have a “cooling-off” period of five working days to cancel and get a refund.
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 warrantor’s name, street address, phone number, and email.
Traders risk prosecution by the Commerce Commission if they fail to comply with these requirements. Penalties for breaches are $10,000 for an individual and $30,000 for a company. If you believe you’ve been misled about an extended warranty or your consumer rights, lodge a complaint with the commission. Let us know too.