PB Tech fined over extended warranties

In July, the electronics retailer pleaded guilty to 14 charges brought against it by the Commerce Commission for selling more than 4000 non-compliant “PB Care” extended warranties between May and November last year.

Under the Fair Trading Act, a consumer buying an extended warranty must receive:

• a summary of their rights and remedies under the Consumer Guarantees Act (CGA)
• a comparison of their CGA rights and remedies with those provided by the extended warranty
• written and verbal information about their rights to cancel the extended warranty and obtain a refund if they change their mind within five working days
• A written copy of the extended warranty at the time of purchase.

PB Tech didn’t provide this information.

The retailer also sold AppleCare warranties for Apple products. When selling AppleCare, it didn’t provide consumers with a copy of the extended warranty agreement at the time of purchase and didn’t inform consumers about their cancellation rights.

Commissioner Anna Rawlings said this information reminds customers of their rights under the CGA and helps them to decide whether an extended warranty offers useful extra protections and is worth the additional cost.

“It also ensures that customers who make a decision on the spot know that they can reconsider within five working days, cancel the extended warranty and get their money back. All retailers selling extended warranties should take appropriate steps to make sure that their documentation is compliant and that their sales staff know what they need to do to comply with the law in store,” she said.

Consumer NZ consumer advocate Aneleise Gawn hoped the move would remind retailers about the importance of being upfront about the protection their extended warranties really provide.

“Shoppers need this comparative information to see whether they really should fork out for an extended warranty. While a consumer might think they’re signing up for extra protection, most of the time they’d already be covered by the CGA,” she said.

Tempted by an extended warranty? Don’t be. In most cases, the retailer is trying to get you to pay for protection you already have. Read our article on extended warranties to learn more about the potential pitfalls, your existing protections and how to use the Consumer Guarantees Act.