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Extended Warranty Vs Statutory Warranty


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#1 Typhoon

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Posted 15 December 2009 - 09:41 AM

Hey all,

Recently on Sunrise there was a guest who was talking about the Statutory Warranty that applies to all goods.

There are generally two types of warranties:

1. Voluntary (or express or manufacturer's) warranties; and
2. Statutory (or implied) warranties.

He said that the Statutory Warranty has been around for many years but that most consumers, and even a lot of retailers are unaware of it.

He said it covers goods to ensure that they match the description by the retailer, and fit for purpose.

He gave an example that if you buy a $50 watch, and it fails after a year, then it was fit for purpose and you would either throw it out, or pay for repairs yourself. However if you buy a $5,000 watch with only a 1 year warranty, you would reasonably expect it to last 7 years say. And if it is only covered for 1 year, then you have rights to have it repaired, replaced or refunded under your Statutory Warranty for the extra 6 years.

He said this logic also applies to expensive TV's. You would expect them to last longer than a year, and they are also covered by Statutory Warranty. So when retailers sell you extended warranties, you are paying for something that you are covered for by law anyway. However he said that obviously retailers make money from these warranties and it is in their interest to sell them.

To claim against your Statutory Warranty, you take the faulty goods back to the retailer. Not the manufacturer. You can ask for either repair, replacement or a refund.

If the retailer does not assist, or claims no knowledge of this, then you can take your complaint to the ACCC. Each claim would have to be reviewed on a case by case basis.

Statutory Warranty in NSW

Not trying to sway people away from Extended Warranties, as I have never claimed under a Statutory Warranty so can't comment on how well the system works. But I was totally unaware of it until I saw this segment.

I had a digital photo frame I bought from Myer fail on the 13th month (of course it was only covered for 12). Was told to go away basically. Might have to try again and see if they will do something based on the above.


Cheers,

Typhoon.

#2 pgdownload

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Posted 15 December 2009 - 10:41 AM

Hi Typhoon,

Thanks for taking the time to share the info. What you've posted is essentially correct.

Its understandable most consumers don't know about these rights, but a recent indepth survey (by the ACCC I believe) also revealed a huge lack of understanding of them in retailers (lesson - don't take what a store manager says about a return at face value, no matter how emphatic they are.)

However for a number of reasons, statutory rights can't really replace waranties (or extended warranties)

1) It usually takes quite some time (months) and effort to get your statutory rights enforced (Good luck with that photo frame :))

2) Statutory rights are usually pro-rated (That is if you take your busted $5000 watch for a refund after 4 years you're only entitled to say $2000 refund)

3) Statutory rights are written very vaguely (There's no hard and fast rule as to just what is a "reasonable" life expectancy etc.) It can be a very grey area for all parties involved.

4) It usually requires a total product failure, as its generally not "unreasonable" for any item to break down at any stage no matter how expensive (i.e. your $5000 watch must become completely useless - Needing a $800 repair for some reason wouldn't be covered by statutory rights)

5) Statutory rights don't apply for anything bought at auction (including eBay)

Statutory rights are more targetted at stopping deception rather than covering breakdowns (although they do cover both). They essentially are at their most powerful when you get an item home and find out it doesn't work as you were lead to believe.

Note I've made some generalisations here and individual cases can always vary.

Regards

Peter Gillespie

#3 kulfi

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Posted 15 December 2009 - 10:48 AM

The issue of statutory warranties or "how long is a product expected to last" is going to be a hot potato with the ACCC.

The market is flooded with products made by subcontractors in China on behalf of some major corporations. While the design of the products is sound, the quality control may not be that good. Several products are failing at a faster rate than before and we're entering a throw-away consumer culture. In this situation, the "expected" life of a product itself becomes questionable and I believe the ACCC will be flooded with complaints very soon.

The person on "Sunrise" may not have covered what is known as the "lemon policy" which applies when a product fails several times under warranty and needs frequent repairs. In such a situation, a consumer is entitled to a replacement or refund because the product is unlikely to survive beyond the warranty period anyway.

Some links about consumer rights can be found in the signature of "Mr Bitey".

#4 pgdownload

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Posted 15 December 2009 - 11:07 AM

The market is flooded with products made by subcontractors in China on behalf of some major corporations. While the design of the products is sound, the quality control may not be that good. Several products are failing at a faster rate than before and we're entering a throw-away consumer culture. In this situation, the "expected" life of a product itself becomes questionable and I believe the ACCC will be flooded with complaints very soon.

To true. I'm actually about to have a statutory go on a digital camera I bought in 2008. We dropped it and it busted. Not covered by waranty unfortunately, however the report that came back said unit cannot be repaired regardless as the components are no longer available. Having a suitable supply of replacement components is also statutory requirement and IMO <2 years is not acceptable. However as mentioned just how long is reasonable is a very grey area.

Regards

Peter Gillespie

#5 kulfi

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Posted 15 December 2009 - 12:54 PM

We dropped it and it busted.

This statement alone will provide a nice-and-easy escape route for the camera manufacturers to wash their hands off the statutory claim.

#6 pgdownload

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Posted 15 December 2009 - 01:16 PM

This statement alone will provide a nice-and-easy escape route for the camera manufacturers to wash their hands off the statutory claim.

Its not relevant to the claim. We're happy to pay for the repair, they just can't do one. As an example Ford recently recommissioned a new batch of head lights for a 20 year old model car at great expense. They'd run out of spare ones but as a head light is a road worth item they couldn't say sorry but you'll have to throw your car away now your head light is busted.

Importers and manufacturers must keep a "reasonable" amount of replacement stock for what they sell. Not really sure how it will fly but guess I'll find out.

Regards

Peter Gillespie

#7 diesel

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Posted 15 December 2009 - 01:28 PM

IIRC, I was under the impression that parts had to be kept for 5 years after a model ceased production/sale. I gleaned this from when Philips or Hitachi pulled out of the TV market in Oz a couple of years ago, and they released a statement to appease people who may have just bought new some of their brand gear.

#8 pgdownload

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Posted 15 December 2009 - 02:13 PM

IIRC, I was under the impression that parts had to be kept for 5 years after a model ceased production/sale. I gleaned this from when Philips or Hitachi pulled out of the TV market in Oz a couple of years ago, and they released a statement to appease people who may have just bought new some of their brand gear.

A good rule of thumb but there's really no defined period. The car industry being the exception have ten years being the amount everyone agreed to.

Regards

Peter Gillespie

#9 KernelPanic

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Posted 15 December 2009 - 03:38 PM

Its not relevant to the claim. We're happy to pay for the repair, they just can't do one. As an example Ford recently recommissioned a new batch of head lights for a 20 year old model car at great expense. They'd run out of spare ones but as a head light is a road worth item they couldn't say sorry but you'll have to throw your car away now your head light is busted.

Importers and manufacturers must keep a "reasonable" amount of replacement stock for what they sell. Not really sure how it will fly but guess I'll find out.

Regards

Peter Gillespie


Vehicles come under a different set of laws. Part of their original compliancing involves the guarantee of spare parts - so its not really a fair example.


Mobile phones are the prime example of this topic however. The law maintains that a product must be fit for its purpose for a reasonable lifetime of the product. The ACCC interprets a mobile phone contract length to be 'the reasonable lifetime'. Therefore is a mobile phone is on a 2 year contract - they expect it to be warrantied for that - not the 12 months that is typical.

#10 Chicken Man

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Posted 15 December 2009 - 04:49 PM

Of course then there comes that old time gripe on the limited warranty of 90 days on projection lamps.

It seems to me having paid over $400 for a lamp and then have it fail with limited hours of use in a little over 3 months is plainly absurd and then not to have it recognized as defective.

How many owners of foregone Panasonic projectors have faced this bizarre outcome ?


C.M


edited

Edited by Chicken Man, 15 December 2009 - 04:53 PM.


#11 IanD

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Posted 15 December 2009 - 06:43 PM

Just like ink cartridges, I think projection lamps are classified as "consumables" and are exempt from the usual warranty provisions.

The masks for sleep apnea patients are only warranted for 3 months, yet with their simple construction one would expect them to last much longer but still they get away with it.

#12 pistolpoida

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Posted 15 December 2009 - 09:39 PM

The person on "Sunrise" may not have covered what is known as the "lemon policy" which applies when a product fails several times under warranty and needs frequent repairs. In such a situation, a consumer is entitled to a replacement or refund because the product is unlikely to survive beyond the warranty period anyway.

Some links about consumer rights can be found in the signature of "Mr Bitey".

i exercised the lemon policy with the manufacture. My first tv ever :o was a bravia 32d3100, and it broke down 3 times in 12 months with the same fault. After been a bit stuborn and clearly stating i will not accept a repair, Sony agreed to replace it and i asked them politely weather they would be willing to let me pay the difference for a bigger set and they let me. and the price was the same as i would of gotten the set for at my work (i work for a major retailer).

getting on to the saturoty rights it is written very vague for a reason because it is case by case situation. i have done bits of a small business management course. it is not easy and it does take time and patinences. it is there to be used

the extended warranties is not for every one either.

#13 generalcuster

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Posted 17 December 2009 - 07:26 AM

as this topic is about hd displays lets here from anyone who has actually claimed their big screen tv "recently" using their stat rights. there was a case i saw in Qld 2006 but this was too long ago and they ( the lovely gov. workers) decided the guy paid too much at the time for the tv so reduced the value of the purchase price..then took off enjoyment value.. then wear and tear etc etc.

not saying u dont have rights but please if u think these vague set of rules will help u make some sort of profit out of your situation then i doubt it.. sorry dont really care about $10 toasters or $50 cameras.. lets see some $3000 tv owner get satisfaction.. thats really what this thread is aimed at isnt it?

#14 Mercutio

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Posted 17 December 2009 - 03:13 PM

lets see some $3000 tv owner get satisfaction.. thats really what this thread is aimed at isnt it?


I'd be interested to see if anyone makes a case for burn in and the like making the TV not fit for purchase...

a FTA logo burnt in would be a pretty strong that it was being used as could be expected

#15 Chicken Man

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Posted 17 December 2009 - 05:31 PM

I'd be interested to see if anyone makes a case for burn in and the like making the TV not fit for purchase...

a FTA logo burnt in would be a pretty strong that it was being used as could be expected


Very doubtful that FTA logo burn-in would occur with normal use as the ads every 10 minutes act as screensavers anyway, besides channel-surfing while the ads are on would likely negate ill effects as well.

CM