Saturday, October 13, 2012

Time to review "The Consumers Guarantees Act"?

Remember back in 1993, the Consumers Guarantees Act was celebrated as going a long way to help consumers get a fair go (coincidently, that's probably around the same time that the television show "Fair Go"'s viewing figures dropped significantly)?

I've had reason to have a look at it recently. It turns out that the Consumer Guarantees Act also has an effect on warranties. Who knew? The prevailing advice on the Internet is not to purchase extended warranties because, under law, the consumer guarantees act goes a long way to protecting you.

Firstly, if a device is replaced due to fault, then that device's warranty term applies for the duration of the life of that device. i.e. you buy a washing machine with a 12 month warranty. 6 months in, it's replaced. Rather than 6 months warranty left, you get a further 12 months. Very fair I thought.

But, more importantly, going by the New Zealand government run Consumer Affairs website:
How long can I expect my goods to last?
If you have a computer and the warranty is for one year, that doesn’t mean that you expect a new computer to only last one year. It is reasonable to expect that a new computer would last at least five years.
Under the Consumer Guarantees Act you can get a remedy if the goods don't last for a reasonable time.
And there in lies the rub. The word "reasonable". When the anti-smacking issue came up, a lot of the reasons for reviewing the situation was due to the term "reasonable". i.e. previously, you could discipline a child with "reasonable force'.

Who decides what is reasonable? I personally wouldn't consider 5 years "reasonable" on a computer. 3 years, yes. Anything after that I would consider fair game. However, I have much higher expectations on say... a fridge. Roughly comparable in price, but I have the expectation that my fridge would last 5-10 years without fault.

Actually, talking about this makes me wonder about software - should you expect software to operate without fault for a reasonable time? Those of you who brought computers when MS Vista (ditto for MS ME) was pre-installed could "reasonably" expect a suitable replacement to the software to my mind regardless of whatever EULA you agreed to.

So there are a few questions around extended warranties:

  1. Do they actually offer anything over and above the rights granted under law? In which case, what is it that you're actually paying for?
  2. Is the application of the law consistent?
The answer to both questions seems to be the same. You essentially pay the extra amount on extended warranties to avoid the hassle of trying to have the application of that particular law honoured.

So what really needs to happen?
  • People need to stop buying extended warranties and challenging retailers/manufacturers using the Consumer Guarantees Act.
  • The ambiguous nature of the word "reasonable" used in the context of that Act needs to be cleared up.
  • Manufacturers/retailers, if offering an extended warranty, should be made to make it clear what it is that they're offering above and beyond those rights already granted under New Zealand law. 
  • And while we're about it, warranty really shouldn't require a receipt. If your device is in "reasonable condition" i.e. not obviously abused, then a warranty should be honoured regardless over a product's lifetime (i.e. item starts selling in 2009, and is sold up till 2011, and it's reasonable to expect a lifetime of at least 3 years on that item, then a warranty, regardless of when it was brought over that period, really should be honoured until 2014 without qualm or receipt).

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