Tougher laws now regulate warranties against defects
Businesses need to come to grips with new consumer laws to provide warranties against defects with their products.
From 1 January 2012, new consumer regulations require all manufacturers, importers and retailers to provide warranties against defects to consumers. Penalties can reach a maximum $1.1 million for corporations and $220,000 for individuals.
The new laws require a warranty document to:
- be transparent – it must be expressed in reasonably plain language and clearly presented;
- concisely state what the person who gives the warranty must do so the warranty will be honoured and what the consumer must do to claim;
- prominently state the name, business address, phone number and email address of the business providing the warranty;
- provide a period within which a defect must appear if the consumer is to be entitled to claim the warranty;
- provide a procedure for claiming;
- state who will bear the expense of claiming;
- state that the benefits to the consumer given by the warranty are in addition to other rights and remedies under the law in relation to goods and services; and
- include the following text: “Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for major failure and for compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure”.
Manufacturers, importers and retailers must:
- check every warranty against defects documents being provided to customers with any of the goods they are selling to make sure it complies with the new regulations;
- direct salespeople not to make any representations to customers about the warranties against defects provided with any of the goods being sold;
- check the warranty documents for goods where they believe consumers are more likely to ask warranty questions; and
- provide retail staff with training about what to say to consumers about warranties against defects.