The Commerce Commission recently announced that, after its investigation of jeweller Michael Hill Limited, the company was fined $169K for breaching its obligations in relation to the extended warranties it offered to customers.
Michael Hill Limited admitted 12 charges that its Professional Care Plan (PCP) failed to comply with the extended warranty disclosure requirements of the Fair Trading Act between May 2017 and May 2018. The PCP documentation that Michael Hill supplied to customers failed to include all of the required information on the front page, including:
- Comparing the protections consumers automatically have under the Consumer Guarantees Act (CGA) with the protections offered by the PCP;
- An adequate summary of consumer rights and remedies under the CGA; and
- A summary of the consumer’s right to cancel the PCP.
Commissioner Anna Rawlings said New Zealand law clearly sets out the information which must be provided to consumers when selling an extended warranty: “That information helps consumers to decide whether an extended warranty offers them value over and above the rights they already have under the CGA. They can then decide whether it is worth the extra cost. The cost of the extended warranty should be made clear. Where the required information is not provided, consumers who purchase these products may be able to cancel their agreements and obtain a refund of the cost of the warranty.“
If you would like us to review your terms and conditions of trade to ensure that you are complying with your legal obligations, please get in touch.