Recent proceedings brought against appliance giant Fisher &
Paykel by the Australian Competition and Consumer Commission (ACCC)
offer businesses a timely reminder to consider whether their
communications around extended warranties are in compliance with
the policies enshrined in the Australian Consumer Law (ACL).
On 12 November 2013, the ACCC announced that it had filed
proceedings in the Federal Court against Fisher & Paykel
Customer Services Pty Ltd (Fisher & Paykel) and Domestic &
General Services Pty Ltd (Domestic & General) for allegedly
making false or misleading representations concerning
consumers' rights under the statutory guarantee regime in the
course of offering an extended warranty.
The ACCC alleges that Fisher & Paykel or Domestic &
General, either on its own behalf or acting as an agent of Fisher
& Paykel (or both), sent letters to consumers who had recently
purchased a Fisher & Paykel appliance, inviting them to also
purchase an extended warranty.
Extended warranties typically offer additional protection over
and above the statutory warranties contained in the ACL and are an
additional charge to the item's retail price. However, extended
warranties do not replace the guarantees contained in the ACL.
There are a number of guarantees contained in the ACL, including
that products and services:
must be of acceptable quality
match descriptions made by the salesperson and in promotions or
match any demonstration model or sample you asked for
be fit for the purpose the business told you it would be fit
for and for any purpose that you made known to the business before
not carry any hidden debts or extra charges
meet any extra promises made about performance, condition and
quality, such as lifetime guarantees and money back offers.
The ACCC alleged that the letters sent by Fisher & Paykel,
or Domestic & General, contained a number of false or
misleading representations about consumers' statutory rights,
including, for example, that the consumer would not be protected
for repair costs to the appliance after the expiry of the
manufacturer's warranty unless the consumer purchased an
The proceedings against Fisher & Paykel also involve
alternative allegations by the ACCC that under the consumer
protection provisions of the ASIC Act, the extended
warranty plan offered may have constituted a financial product and
that, by offering the plan, Fisher & Paykel or Domestic &
General were offering to provide financial services in breach of
the ASIC Act.
The ACCC is seeking pecuniary penalties, declarations,
injunctions, orders for compliance programs, and costs.
This action follows the announcement by the ACCC of its national
consumer awareness-raising campaign called 'If it's not
right, use your rights. Repair, replace, refund', and
highlights the ACCC's continuing focus on the protection of
This serves as a timely reminder that businesses should be
cautious when offering extended warranties to consumers. Businesses
should avoid misrepresenting or understating consumers'
statutory rights under the ACL, or overstating the value of
additional rights (if any) provided by the extended warranties.
Businesses providing goods or services to consumers should
consider whether their terms and conditions are in compliance with
the ACL, and, if they offer extended warranties to consumers, that
communications about these also comply with the ACL.
Winner – EOWA Employer of Choice for Women Citation 2009,
2010, 2011 and 2012
Winner – ALB Gold Employer of Choice 2011 and 2012
Finalist – ALB Australasian Law Awards 2008, 2010, 2011 and
2012 (Best Brisbane Firm)
Winner – BRW Client Choice Awards 2009 and 2010 - Best
Australian Law Firm (revenue less than $50m)
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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