The ACCC has issued the following statement reminding those giving express warranties against defects in goods sold for less than A$40k or ordinarily acquired for personal, domestic or household use or consumption, that those warranties must comply with the Australian Consumer Law (ACL) by the end of September.

The ACL requires that certain mandatory information (including mandatory text) regarding an express warranty be given clearly in a document. The information is to include, in general terms, all information needed by a consumer to make a claim such as full contact details and the procedure to be followed.

The Commission's statement reads as follows:

Fix your warranty documentation before 30 September 2012!

Do you provide voluntary warranties with your products or services? If so, it is important that you are aware of the requirements for warranties against defects under the Australian Consumer Law (ACL).

What are Warranties against Defects?

Under the ACL, promises you (as a supplier or manufacturer) make to consumers about what you will do if something goes wrong with a good or service, are called ‘warranties against defects’ (WAD).

The law requires that where you opt to give a consumer a written WAD it must comply with specific requirements relating to the way such a warranty is presented and the information it contains, including mandatory text alerting consumers to their automatic rights under the ACL consumer guarantees regime.

It is important to note that WAD’s are provided in addition to consumer guarantees, and do not displace them. Under the consumer guarantees provisions, you also have an obligation to address product failures. You cannot avoid or ignore your obligations by referring consumers back to the manufacturer.

Since January 2012 suppliers and manufacturers have been required to update their warranty documents under these new WAD requirements.

The ACL Regulators recognised that transitional practical difficulties may arise in the application of the new provisions. Accordingly, until 30 September 2012, for products in the supply chain manufactured and packaged prior to 1 November 2011, ACL Regulators are unlikely to take enforcement action in circumstances where:

traders encounter serious practical difficulties in updating warranty documents; and

reasonable steps have been taken to otherwise convey the information required.

As this transitional period is coming to an end on 30 September 2012, you will need to make sure your WAD documentation is up to date and complies with the new requirements.

ACL Regulator’s enforcement and compliance approach to non-compliance

In the event that the ACCC and other ACL Regulators identify non-compliant stock they will consider this on a case-by-case basis, and any action taken will be proportionate to any consumer detriment that is associated with the non-compliance, consistent with the ACL Compliance and Enforcement Policy. For more information regarding this policy, please see the ACCC's information material on Compliance and Enforcement.

What you should do next?

With 30 September 2012 nearly upon us, now is the time to double check that the WAD provided to your customers comply with all the necessary requirements. For more information about these requirements, see the ACCC’s information material on warranties against defects.