Oily Rag Column - Consumer Guarantees

Oily Rag Column - Consumer Guarantees

By Frank and Muriel Newman

A reader has written in telling of their experiences with a product they bought from a merchant some 12 months ago. They said the product had not performed in the way that was promised at the time of the sale and eventually they asked for a refund. The merchant refused.

Consumers have all sorts of rights and protections, including the Consumer Guarantees Act so we thought it worth looking at the Act to see what it says about our reader’s situation. Here‘s a quick outline of the Act.

· The Act has the word “guarantees” in its title because it is expressed as a series of guarantees. These are guarantees given by a merchant to a consumer regarding: title, the quality of a product or service, whether a product is fit for the purpose stated and promised in advertisements or by a salesperson, that the product is the same as samples or photographs provided, that the price is fair and reasonable where the price or a pricing formula is not agreed in advance, that the product is able to be repaired if required, and any other express guarantees that may be given.

· The other word in the title is “consumer” which is defined as a person who “acquires from a supplier goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption.” It does not cover business assets like trucks, machinery, and so on.

· Goods sold by a private individual or via auction or by tender are NOT covered.

· This is what Trademe says on its website. “The Consumer Guarantees Act (CGA) only applies to sales by sellers 'in trade' – essentially, professional sellers. It does not normally cover private or one-off sales. If an item is bought through a Trade Me classified, or by ‘fixed price offer’ or ‘buy now’ from a professional seller, it should be covered by the CGA. The CGA doesn’t apply to items sold by auction. What constitutes an ‘auction’ is not defined in the Act, so it is unclear whether the CGA applies to items bought by bidding online.”

· It does not matter whether you buy goods from a merchant online or in-store – they are covered.

· Sellers are not able to avoid the Act by saying they do not make refunds or exchange goods. Nor can they say they are not liable for any “consequential” costs. These are costs that you may have incurred as a result of the product being defective (for example the cost of returning the goods).

· If the fault is minor, the retailer can replace, repair, or refund the value of the product. If the retailer refuses to make good the repair within a reasonable time, then the repair can be done elsewhere and the costs recovered from the original merchant.

· If it’s a major fault, the consumer can claim a full refund, a replacement product, or claim compensation for the loss in value of the product.

· Where a fault has been made known to the purchaser, eg blemished goods, that fault cannot use that as a basis for subsequent complaint. Any undisclosed faults however can.

· Gifts are covered. You have the same rights as though it were you who made the purchase (you don’t have any rights against the person who gave you the gift!).

· Changing your mind is not one of the grounds for complaint! Try your luck but the seller is under no obligation to change the goods just because you have had second thoughts or something else more demanding of your money has cropped up. Many firms do however make this guarantee themselves in their promotional material and therefore are bound by their statement.

· Damage caused by using of the goods in a manner other than its intended purpose is also not covered. For example if you buy a child’s bunk bed, but it breaks while an adult is sleeping in it, then there are no grounds for complaint. Likewise, using a power tool rated for domestic use only on a commercial job is at your own risk.

Now we come back to the reasonable time problem our reader had. The Act says claims must be made “within a reasonable time.” What is reasonable is always a contentious issue but will depend on the product, how much it has been used, and how long they should last.

In our reader’s case it appears an over-zealous salesman made unrealistic claims about the product. Unfortunately they did not make their feelings known to the merchant, despite using the product each day. In their case a reasonable time frame was probably more like a few weeks rather than 12 months.

If you have a favourite money-saving tip, please send it to us at www.oilyrag.co.nz or write to Living off the Smell of an Oily Rag, PO Box 984, Whangarei so we can share it with the oily rag community.

*Frank and Muriel Newman are the authors of Living Off the Smell of an Oily Rag in NZ. Readers can submit their oily rag tips on-line at www.oilyrag.co.nz. The book is available from bookstores and online at www.oilyrag.co.nz.

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