PB Tech pleads guilty to failings in extended warranty agreements, 'bait' advertising

Sentencing on the charges will take place in September. Photo / 123RF

Computing and IT retailer PB Technologies has pleaded guilty to 14 charges under the Fair Trading Act for failings in its extended warranty agreements.

The Commerce Commission took the action relating to warranty agreements sold as an add-on to consumers.

Charges alleged it had not given customers a summary comparing their existing Consumer Guarantees Act rights with those provided by extended warranty, customers were not given a copy of the extended warranty agreement after paying for it and not told about their cancellation rights before signing up.

The consumer law breaches occurred between May and November 2017.

Under the Consumers Guarantees Act, retailers must provide customers with information about the benefits provided by extended warranty in addition to benefits already provided by the Consumer Guarantees Act.

PB Tech, which has 11 stores and service centres throughout New Zealand, told the Herald it had changed it procedures to be compliant with consumer law.

"The information we had previously provided to consumers around the benefits of our popular PB Care Programme was not as detailed as it should have been but we have since fixed the issues identified and are now 100 per cent compliant with all New Zealand consumer laws," PB Tech group general manager Darren Smith said.

Smith said PB Tech had also implemented "better systems" for checking stock availability, following a commission warning on "bait" advertising.

Sentencing for the charges heard in the Auckland District Court will take place in September.

The commission earlier warned PB Tech about "bait advertising" after it promoted Apple watches at special sale prices in an email to 100,000 people when it only had 14 available at those prices.

Commissioner Anna Rawlings said the regulator's view was that the retailer likely breached the Fair Trading Act as it did not appear to have reasonable grounds to believe it could supply reasonable quantities of Apple watches at the sale price.

"PB Tech admitted that it knew the watches would sell out and two complainants told us that they sold out in the first few minutes of the sale," Rawlings said.

"Businesses must remember they should have reasonable grounds for believing they can supply the goods in reasonable quantities when they advertise them for sale."