The Australian Automotive Aftermarket Association (AAAA) is pushing for further awareness of consumer warranty rights following the recent filing of a class action in Victoria’s Supreme Court against JB Hi Fi. Maurice Blackburn Lawyers, which lodged the class action, described extended warranties sold by the electrical retailer as “junk”, claiming they were “of little to no value”, as consumers already had the same rights for free under Australian Consumer Law.
According to the AAAA, many consumers are unaware of their rights relating to product purchases, including new car warranties.
“We are constantly receiving complaints from consumers about new car warranties, stressed about their rights,” said Stuart Charity, CEO of the AAAA. “Car owners are confused about what happens when the manufacturer’s warranty period expires as most people believe that’s when their right to repair or replacement ends. It doesn’t. The warranty may end, but that’s not the end of the manufacturer’s obligations to the purchaser of that vehicle.
“Why are consumers afraid that their statutory rights will not be honoured? That’s the real question here. The power imbalance is immense. It is daunting for a car owner to negotiate a warranty claim and that’s often why consumers purchase extended warranties – it takes out the fear of warranty rejection.
“This class action, if successful, will be a great start to encourage large multi-national companies to honour their consumer right obligations. However, we need a comprehensive consumer campaign to inform everyone that extended warranties often don’t offer additional protection. More importantly, consumers need to know what rights are already covered under the Australian Consumer Law.”
The AAAA said much of the confusion comes from the language used. While most people know the word ‘warranty’, there is less understanding of ‘consumer guarantee’, with most people unaware that consumer guarantees may last longer than the manufacturer’s warranty.
“It’s so confusing because some car manufacturers offer and even encourage an extended warranty and whilst these generally don’t offer any additional consumer benefit, they can be conditional – often tying the consumer to the dealer and car company branded parts,” said Charity.
According to the AAAA, consumer confusion relating to automotive warranties is widespread. Up to 40 per cent of new car owners are under the misunderstanding that they must take their vehicles to an authorised dealer to maintain the manufacturer’s warranty.
“We need to have a complaints system that offers consumers time-critical support and easy-to-understand information,” he said.
Charity called on governments to do more to help consumers rather than having them embark on class action law suits. “Consumers will continue to feel that they need to pay extra to have their consumer rights honoured until there is a serious education campaign, greater enforcement and a quicker response to complaints,” added Charity.