Consumer gteeYou’re at the store buying a new TV and just as you hand over a fistful of your hard-earned cash, the store clerk asks you –

“Would you like an extended warranty with that?”

Extended warranties, a store will tell you, are peace of mind. They are the comfort that if anything goes wrong in the next 12, 24 or 48 months (except damage caused by you of course), you will be able to seek repair or replacement of your malfunctioning hardware at no extra cost.

Image source: Public domain

But wait! Are you paying for something you already have?

Stores that sell ‘extended warranties’ are, more often than not, selling you something that you’re already entitled to under Consumer Law. You already have the right to “a repair, replacement or refund” as well as compensation for damages and loss (e.g. a broken fridge resulting in loss of perishable food) and the right to cancel a faulty service (e.g. a phone contract that doesn’t work as promised in the fine print), if the fault or defect manifests within the item’s reasonable lifespan.

Sample scenario -Jane Bloggs bought a Notbad computer from her local electronics store. The computer came with a 12-month warranty and the store offered a 3-year extended warranty for $50. Jane didn’t have enough money for the extended warranty so she didn’t purchase it. 14 months later, her Notbad computer refused to start up and Jane was in tears because it was out of warranty and she couldn’t afford a replacement.

A friend of Jane’s told her she should ask for a free repair anyway. She did and was very surprised and happy that the store agreed! She walked away feeling like the store had done her a huge favour – but had they? Or were they just fulfilling the consumer guarantee that Jane didn’t even know she had?

Do Consumer Guarantees apply to everything?

Yes, if the goods or services purchased cost less than $40,000 or cost more than $40,000 but ordinarily used for domestic, household or personal use or consumption or are a vehicle or trailer primarily used to transport goods on public roads.

So how long do Consumer Guarantees cover me?

That’s where it gets tricky. The short answer is: It depends. The long answer is: “for a reasonable time depending on the nature of the goods or services”.

For example, if you buy a cheap clock from a $2 shop, it is very unlikely that a consumer guarantee will apply if you try to get it repaired or replaced two months later. The extremely cheap price indicates both low quality materials/craftsmanship and a very limited expected lifespan – a ‘reasonable person’ would not ‘reasonably expect’ the clock to last for long and so any consumer guarantee protection is likely to be extremely minimal. By contrast, a $200 clock from a large department store would be ‘reasonably expected’ to work for a much longer period of time. How long? Well, it depends. There’s no set rule for any item because there are so many different variables depending on brand, materials, intended use and date of purchase.

Generally speaking, the more expensive an item is, the more time you can reasonably expect it to work without issue. Also generally speaking, consumer guarantees will only ever cover you for item defects or faults that were not caused by you – so if you dropped your $200 clock and it hasn’t worked since, that’s just too bad.

Has something stopped working and it wasn’t your fault? The first step now is to ask for a repair or replacement of the broken item at the place you purchased it. If your request is refused, the next step is to lodge a complaint.

Do your research before paying extra for an extended warranty

Before buying an extended warranty, always ask the supplier to list what it gives you over and above your automatic consumer guarantees.

“But the place I bought it from says No Refunds!”  – This is against the law, even for gifts or during sales.

“But I don’t have a receipt!” – This is a little trickier. Some stores may accept your item without a receipt, others may have the purchase in their computer system and can look it up for you upon request. You may need to know the date and approximate time that you bought it. If you don’t have the receipt and cannot get it, you may not be able to claim a repair or refund.

Worried about receipts fading or getting lost? Maybe download the Australian Competition & Consumer Commission (ACCC)’s Shopper App ACCC logowhich can store your receipts as photos on your phone, set reminders for your lay-bys, warranties and gift voucher expiry as well as help you write a letter of complaint if needed. It is a free app, created by the Australian government, found on iTunes or GooglePlay.

Image source: ACCC Shopper app https://www.accc.gov.au/about-us/tools-resources/accc-shopper-app

Have you experienced an out-of-warranty breakdown? Has a shop or phone company turned you away when you’ve asked for a repair or replacement? If so, contact the Financial Counsellors at Midlas – 08 9250 2123! They will assess the issue, outline how the consumer guarantees may impact your situation and either assist in resolving your dispute or give you the information and tools to do it yourself!

Alternatively or for more severe issues, you can call the not-for-profit Consumer Credit Legal Services WA on 08 9227 7066 or find them online at http://cclswa.org.au/ 

Midlas Mission: We partner with individuals and organisations to promote independence, strength and wellbeing in our community through support, advocacy and education.