Knowing your consumer rights
14 Oct 2020
With John Mezger
While much has been done in recent years to strengthen consumer laws and educate buyers and suppliers, there remains a fair amount of confusion on both sides of the fence on how to deal with complaints around substandard goods and services.
Say you buy a product that appears dodgy – who’s responsible? The supplier, the manufacturer, or both? What’s the best way to approach getting your problems resolved? What options do you have if you don’t get a satisfactory response? You know, as a consumer, you’re entitled to products or services that are “fit for purpose” – but what does that actually mean? And, those “extended warranties” the salesperson hits you up for, are they worth it?
Consumer rights are protected in New Zealand by several pieces of legislation; however, the main players are the Fair Trading Act 1986 and the Consumer Guarantees Act 1993.
The Consumer Guarantees Act deals with goods or services that are normally bought for household, domestic or personal use – business-to-business transactions tend to fall under the Fair Trading Act. For example, if the office printer dies before its time, any claim would likely need to be made under the Fair Trading Act. In cases where the near-new household washing machine springs a leak, you’re looking at a complaint under the Consumer Guarantees Act.
The Consumer Guarantees Act provides what we call “implied mandatory guarantees” – forgive the legal lingo. It simply means, as a consumer, you can take it as a given that the seller has the right to sell the goods, and that the product comes with an automatic quality guarantee, including being safe, durable and reasonably priced, it lives up to any product description, and it’s “fit for purpose”.
The term “fit for purpose” is bandied around a lot, but what does it mean? There’s actually no cut-and-dried, across-the-board answer, unfortunately. What the law calls for, though, is that any product or service be of a standard that the seller claims it to be, or that the consumer has specifically asked for. In other words, if a seller claims a product provides a certain benefit, then that benefit must be provided. Similarly, if a consumer specifically requests a product that achieves a certain end, and it doesn’t, then the buyer likely has a claim.
So, your online purchase is dead, or dying. What to do and where to start?
Stake your claim
Contact the supplier as soon as possible. Note: they cannot refuse to deal with you, and try to shove you off to the manufacturer. If, for example, the supplier’s closed down, and there’s no recourse there, tracking down the manufacturer might be your only option.
Some tips on raising a complaint:
- Do so as soon as you become aware there’s a problem;
- Write down what’s gone wrong – even if you meet or phone the manufacturer or supplier to discuss the issue. A written record will be invaluable should you take it further;
- Also, write down all the communications you have trying to resolve your complaint, if it can’t be sorted on the first try;
- Try to be as up with the play as possible on your rights and responsibilities. Remember, if any problems with your purchase stemmed from misuse or carelessness on your part – including not following the manufacturer’s instructions – you’re likely out of luck;
- Do you have a wider claim? In some cases, you can also seek redress for reasonably foreseeable losses caused by a breach of consumer law.
Where the failure of a product is the responsibility of the supplier and/or manufacturer, you are entitled to have it repaired, if possible and, if not, replaced or fully refunded.
It would be nice to think that all suppliers and manufacturers are aware of their responsibilities in respect of consumer law, but the unfortunate reality is that sometimes that’s not the case. A supplier might even seek to avoid responsibility. The first question you have to ask yourself – is a fight worth it, or is it better just to let it go, and perhaps get redress through not putting further business their way again?
If the value of the product in question – or the principle – warrants the time and effort, one option is the Disputes Tribunal, which settles small claims up to $30,000. While you can seek legal advice around taking a case to the tribunal, the actual hearing is a lawyer-free zone. You represent yourself, and it’s relatively inexpensive, bar a small application fee.
Finally, let’s look at one of the more controversial – and confusing – areas of consumer protection: extended warranties. Are they worth it? Depends. Though, in many cases, you’re likely paying for protection you already have under consumer law and/or your personal insurance policies.
However, there are some situations where an extended warranty is worth shelling out for – but be sure it does, in fact, offer a higher level of protection than what you’re entitled to – for example, a “no-questions-asked replacement” as opposed to having to wait for a repair job, as provided for under the Consumer Guarantees Act.
The FTA and CGA apply to online purchases as well, but the situation is not as straightforward as your rights when purchasing from a brick-and-mortar retailer. When you purchase online from a New Zealand based business you are protected by both the CGA and FTA.
However, when purchasing from overseas online retailers, New Zealand laws do not apply. One way to ensure that you are protected is to search the company’s name in the Companies Register. The registered company is not always easy to find, but will include ‘Limited’ in the name. Some companies trade under one name, but are registered as another.
If you are purchasing from overseas, you will likely be subject to and afforded the rights and protections in the country the company is registered in. This could be Australia or China, or a jurisdiction in North America or Europe. These rights may be vastly different and much more difficult to enforce than through the Disputes Tribunal.
Back to New Zealand
Don’t forget, under new consumer laws brought in in 2015, businesses are required to provide black-and-while, clear cut information that spells out your rights under the Consumer Guarantees Act, your entitlements under an extended warranty, and details on precisely what added protection you’ll receive in paying for the extra cover. Make sure you receive this information and weigh it up carefully – your wallet will thank you for it.
The law is clamping down increasingly on retailers who don’t follow the rules. In December 2018 Noel Leeming was fined $200,000 for misleading consumers on their rights around returning faulty goods.
When it comes to protecting your rights as a consumer, knowledge of the legal fundamentals really is one of the best resources you can have in your toolkit.
Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.