Shoppers misled on warranty rights

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Extended warranties are being sold with misleading advice and shoppers are not told they already have similar protection under the law, a survey has found.

The warranties can cost hundreds of dollars and are sold as a "peace of mind" way to extend the 12-month manufacturer's warranties that come with a wide range of electronic goods.

But Consumer NZ say such deals are not generally needed because if a product breaks down after the manufacturer's warranty then consumers are still protected by the Consumer Guarantees Act (CGA).

Consumer NZ chief executive Sue Chetwin told the Herald that information given to shoppers about the need for extended warranties was so wrong it was deliberately misleading.

"There really is no excuse for the staff on the floor not understanding the Consumer Guarantees Act. So you would have to argue that this really comes from the top."

Consumer NZ organised mystery shoppers to visit Bond & Bond, Harvey Norman and Noel Leeming stores in Wellington where store attendants were asked what would happen if the product failed after the manufacturer's warranty expired.

Only one store of six, Bond & Bond in Lower Hutt, mentioned the CGA, and it downplayed the protection offered.

Yesterday a survey by the Herald found similar information provided by stores on Auckland's Queen St.

A sales attendant at Dick Smith Electronics said that if a computer broke down one day after its manufacturer's 12-month warranty expired it would not be fixed or replaced.

After repeated questioning she provided a booklet containing information on the CGA but still maintained there was no cover beyond 12 months.

Staff at Bond & Bond and JB Hi-Fi mentioned the CGA only when pressed on what would happen without an extended warranty, and then outlined the time and difficulty in relying on it.

Ms Chetwin said doing so was misleading because New Zealand consumers were protected by powerful after-sales rights.

Bond & Bond told Consumer NZ it was disappointed to hear of their shopper's experience and said it continued to educate staff about the CGA. Noel Leeming and Bond & Bond said they may have "oversimplified" information and would review it.

THE LAW
* Retailers must guarantee products are of acceptable quality - they must put things right if they fail and the buyer didn't cause the fault.
* Warranties are generally for a year but goods must last for what you would expect given the circumstances of use.
* Advertised benefits of extended warranties such as "wear and tear" and international coverage are already covered by the act.