Dispute resolution scheme tells Vodafone to fix faulty phone.
A dispute over a faulty $1000 iPhone has ended with Vodafone being ordered to pay the cost of repair. The company had originally refused any liability. But the Telecommunications Dispute Resolution (TDR) scheme found the phone wasn't of acceptable quality and told the company to pay up.
John, the consumer who took the case to the TDR, bought the iPhone 4 from Vodafone in September 2010 on a 24-month contract. Six months after the contract ended, the phone started dropping calls and the home button died. He had expected the iPhone to last longer than two and a half years. Our reliability surveys show most do: our latest survey found 91 percent of mobile phones bought in the last three years had never needed repair.
But Vodafone told John his phone was outside the 24-month warranty and he'd have to pay a $99 assessment fee to diagnose the problem as well as the cost of fixing it.
In evidence to the TDR, the company acknowledged the Consumer Guarantees Act (CGA) requires goods to be durable but argued there was no set time for how long a phone should last. As a gesture of goodwill, it had offered to waive the assessment fee but not the estimated $400 repair cost. It subsequently offered John a discount on a new phone if he wanted to upgrade but recommended he purchase "phone insurance" for $9.95 a month "to protect him in situations like these".
The TDR adjudicator rejected Vodafone's argument that it had no liability for the phone under the CGA. The adjudicator considered it was reasonable for John to expect the phone to be fault-free after 30 months given its high value, usage, and the nature of the fault. As a result, the phone was found to be insufficiently durable and Vodafone was held responsible for repairs.
The CGA requires goods to be of acceptable quality. You don't need "phone insurance" to protect you if a product is faulty.
The Act's "acceptable quality" test is based on what a reasonable consumer would expect from a product. If your phone fails, and you haven't caused the fault, we recommend you take it back to the retailer.
- The fault is minor and can be fixed? Then the retailer can repair it, replace it, or give you a refund.
- The fault is substantial or can't be fixed? Then you have the right to reject the phone and either choose a replacement of the same type and similar value or a full refund of the purchase price. You can also keep the phone and claim compensation for any drop in the value.
If you can't resolve the problem with the retailer and it's a member of the TDR scheme, you can make a complaint to the TDR. All the major phone companies are scheme members (www.tdr.org.nz; 0508 98 98 98). You can also take your case to the Disputes Tribunal.