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What Are Consumer Guarantees? (2021 Update)

What Are Consumer Guarantees? (2021 Update)

Purchased an expensive product and want to know if you're covered if it stops working? Read about consumer guarantees and what you're entitled to here.

17th May 2021
Reading Time: 4 minutes

So you’ve just bought a new state of the art TV. We’ve all had to buy big ticket items such as TVs, fridges, laptops and other appliances – usually with that worried feeling in the back of your mind that it could break within the first two years of ownership. Surely, the only solution would be to buy the extended warranty that the salesman is so desperately pushing you to buy, right? Wrong. Consumer guarantees exist for this reason.

What are they?

Consumer guarantees relate to the rights of consumers when purchasing goods or services and they exist for consumer protection. They can be found in the Competition and Consumer Act 2010 (Cth). When goods or services are bought by a consumer, the supplier and/or retailer has to assure the working condition of the product. In addition to the working condition, the product must match the description the supplier and/or retailer gave you. In the event that something was problematic or ill-performing, you would generally be entitled to:

  • A repair, replacement or refund;
  • Cancel the service;
  • Compensation for damages and loss.

What do they cover?

Consumer guarantees cover most items. If an item is sold, hired or leased for less than $40,000 by a business then the guarantees exist. However, the threshold is increasing from $40,000 to $100,000 in July 2021. For the higher threshold to apply, the goods or services need to be purchased from the 1st of July 2021 onwards. Otherwise, the lower threshold still applies. 

One of the consumer guarantees is that the product is of acceptable quality. A product is not of acceptable quality if it is faulty or unsafe, does not look acceptable or does not do the things a person would reasonably expect it to. In addition, the product must match the description made by a salesperson and fit the purpose you told the business you were purchasing it for. 

These guarantees still apply, even where another policy regarding warranties and repairs exists.

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What does it not cover?

If you’ve changed your mind

In the event that you decide you no longer need the goods or service and want to return them, you will not be covered by consumer guarantees. However, some businesses will still accept returns for change of mind for goods so do not lose hope.

If you’ve mistreated the product

Goods will not be covered by consumer guarantees if the person who bought them was the one who caused the quality to be unacceptable. If you leave your brand new phone lying around the floor all the time and eventually step on it and break it, it is highly unlikely you will be covered. In addition, goods are not covered if they are damaged from abnormal use.

If you’ve bought the product knowing about the faults

If you thought you would cross your fingers and try your luck with a product that was already damaged but heavily discounted and too cheap to resist – sorry you wouldn’t be covered for that either. Consequently, if the business tells you about the faults of the product before you buy it, you will not be covered. However, any faults that the business did not disclose will still be covered by consumer guarantees.

If you’ve ignored advice/instructions from the seller

Thought you were smarter than the experts? If you have failed to follow the instructions on a product resulting in the fault, then you won’t be compensated. It’s important to always follow instructions and heed the warnings on the product.

You were ambiguous with what you were wanting when buying the product

Consumer guarantees do cover items that do not fit the purpose you told the business you were purchasing it for. However, if you were unclear about exactly what you wanted, you may not be covered by consumer guarantees.

The item is above $40,000 and is used by a business for business purposes

In other words, if you are using the item for business purposes, and the value of the item is below $40,000, you will be covered by the consumer guarantee. You may not be entitled to some of the consumer rights if the purchase price is more than $40,000. However, the threshold is changing to $100,000 from 1st July 2021. Although, the higher threshold only applies to goods or services bought from that date.

You bought the item secondhand from a private seller

You will not have rights to a refund, replacement, repair or compensation if you bought an item as a one-off from a private seller. However, other consumer guarantees will still apply. If you’re buying something valuable from a private seller, you should also check that it’s not registered by someone else on the Personal Property Security Register (PPSR).

How to go about claiming your consumer guarantee?

For products

There are two potential avenues here. You could either approach the retailer that directly sold you the product or the manufacturer. Generally, it’s advisable that the first point of contact be the retailer because they can provide more solutions such as a repair, replacement or refund. In contrast, the manufacturer can only pay out a reduced product value and, in some cases, provide compensation for loss. Furthermore, a retailer cannot turn you away and tell you to contact the manufacturer instead.

For services

Simply approach the supplier of the service. The solutions generally provided are cancellation of the service or possible compensation for damages or loss.

A few final points

  1. It’s illegal for a business to claim/have signs that they have a no refund policy under any circumstances.
  2. Consumer guarantee rights for customers do not expire. They can still apply after the explicit warranties have lapsed (given that the other criteria is met).
  3. Extended warranties are optional. A business cannot place extreme pressure on you to purchase one. In addition, a business cannot mislead you on your rights to convince you to buy an extended warranty.

Don’t be fooled by that confidently smooth manager telling you ‘tough luck’ – know your legal rights as a consumer and if something doesn’t seem right, contact the ACCC.

Don’t know where to start? Contact us on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest lawyer marketplace.

Author
Anthony Fong
Anthony Fong

Anthony is a Paralegal at Lawpath. Pursuing his interest for Insolvency and Commercial Law, he is currently completing his third year of a combined degree in a Bachelor of Laws/Bachelor of Commerce at University of New South Wales.