All retailers and manufacturers must act now to ensure that all product warranty information given to consumers complies with new regulations which come into effect on 1 January 2012.
All documents that give a warranty against defects - including manufacturer warranty cards, terms and conditions of sale, warranties given on product packaging - must comply with Regulation 90 of the Competition and Consumer Regulations 2010. Non-compliance will be an offence under Schedule 2 to the Competition and Consumer Act 2010 (The Australian Consumer Law).
Regulation 90 prescribes that, from 1 January 2012, all warranties against defects must include the following statement:
"Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and for compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure."
Any warranty against defects must also:
- be in a document that is transparent (that is, a document that is expressed in reasonably plain language, legible and presented clearly);
- clearly state the warranty period, procedure for claiming including the address to which a claim may be sent, who bears the cost of claiming the warranty, and if such cost is to be borne by the person giving the warranty, how the consumer can claim expenses incurred in making the claim; and
- prominently state the name, business address, telephone number and email address (if any) of the person who gives the warranty.
The above is only a summary of the requirements of Regulation 90, and full reference to Regulation 90 ought to be made prior to taking any steps in relation to the new legislation.
The legislation describes a warranty against defects as a representation that a person will:
- repair or replace goods or part of them, or
- provide again or rectify the services or part of them, or
- wholly or partly recompense the consumer,
if the goods or services or part of them are defective.
What to do now
This new regulation imposes significant further compliance obligations on the retailer and the manufacturer.
Both the retailer and the manufacturer need to take steps to make sure that all warranty documentation is compliant. It is not sufficient to refer the consumer to warranty information on a website or in-store. The warranty document, whatever form it takes, must be compliant.
For stock packaged prior to 1 November 2011, there is thankfully some transitional relief. The ACCC has just announced that:
Until September 2012, when considering the appropriate enforcement response to any contravention of the warranty against defects requirements that apply to stock in the supply chain manufactured and packaged prior to 1 November 2011, the ACL Regulators will have regard to:
- whether there are serious practical difficulties in updating warranty documents—e.g. the warranty is in a tamper-proof package; and
- whether the supplier has taken all reasonable steps to otherwise convey the mandatory text and information required by the ACL to consumers—e.g. by placing a compliant sticker on the outside packaging.
In these circumstances the ACL Regulators are unlikely to take enforcement action.
This transitional relief will need to be considered on a case by case basis.