New Zealanders are paying millions of dollars for often useless warranties and unjustifiable repair bills. Ignorance of consumer rights is the key culprit. But so too is long-awaited consumer law change. Bruce Munro investigates.
The law is on my side, or so I believe. So I bluff it.
''The dishwasher is no longer under warranty, but under the Consumer Guarantees Act I think we're still covered,'' I tell the phone while staring at the bottom of a dishdrawer covered by several centimetres of water.
''I'll have to get my manager to phone you,'' a courteous but noncommittal call centre telephonist replies.
''If you expect your dishwashers to last less than three years I need to know so I can avoid buying this brand in future,'' I repeat to the manager 15 minutes later.
''But if not, I need to know that if this problem proves to be a manufacturer's fault you will pay for the repairs.''
The manager assures me the company does not expect its internationally recognised brand to last only two years. A time is set for a serviceman to visit.
Good, but am I just lucky? What actually are my consumer rights when it comes to faulty goods and services? How often am I unnecessarily paying for repairs? It is time to find out.
I dial the Citizens Advice Bureau (CAB) Dunedin branch and book an appointment with two members of the consumer team.
Kevin Flaherty and Graeme Marshall are experienced in helping baffled and embattled consumers.
''The Consumer Guarantees Act is all about when private individuals purchase goods or services for their own personal or household use,'' Mr Marshall, who leads the consumer advice team, says.
''They can rely on the Consumer Guarantees Act to provide them with certain guarantees.
''The first two - that the goods must be of acceptable quality and fit for the purpose - are the two which people usually have issues with.''
Many people think once the manufacturer's warranty on a product runs out they then have to pay for all repairs themselves. But that is not so, Mr Flaherty explains.
The critical question is not ''Has the manufacturer's warranty expired?'' but ''What is the expected lifetime of the goods?'' And that, in many cases, is several years longer than the manufacturer's warranty.
Of course, the goods have to be used in a reasonable way. But if that is done, one or more of the guarantees is not met, and it is reasonable to expect the faulty product or component to still be in working order, then you have the right to a remedy.
My dishwasher is approaching three years old. So, despite the warranty running out almost 12 months ago, if the serviceman finds a fault covered by the Act, the retailer or manufacturer should pay for it.
And what is more, if the problem is covered by the Act they should also refund the serviceman's fee for determining the cause. The revelations from these consumer rights champions continue.
''It's not up to the consumer to do the running around, chasing the manufacturer or whoever,'' Mr Marshall says.
''The shop should do that as their obligation under the Consumer Guarantees Act.''
And the Act covers not just goods but services as well.
Whether it be a mechanic doing an oil change, a hairdresser restyling a mullet or an insurance salesman touting income protection, it must be performed with reasonable care and skill.
''Most often the issue is about cost rather than quality,'' Mr Marshall says.
''If the price is not discussed before the work is done then the consumer only has to pay the going rate.''
If, for example, the common practice among plumbers is to charge a minimum of one hour's labour for call-outs then that is reasonable, even if it only takes five minutes to extract the bra wire from the washing machine agitator. The going rate, and what can be charged for, does change with time.
''We had a new one recently where they charged for the van,'' Mr Flaherty says.
''There was a call-out cost, vehicle costs and so on, but they also charged for the van sitting there out of action for two hours . . . I think it was about $60.''
The flabbergasted bill recipients are going back to the business to argue the van charge is not a reasonable cost.
The Consumer Guarantees Act (CGA) gives consumers potentially powerful protection, Mr Marshall says.
''But the funny thing is most people when they buy a product don't even know it exists. That's the problem. They've got the protection but are not aware of it.''
And on the face of it, retailers are no better informed.
''The way some staff in shops talk to customers about their rights, they don't even know the Consumer Guarantees Act exists. Or are they deliberately not mentioning it? You have to wonder,'' he says.
SOME people, such as Roy Colbert, do know their rights and use them to good effect. In September, the Dunedin writer's beloved plasma screen television started turning itself off.
The TV was more than two years old and 18 months outside the manufacturer's warranty, but Mr Colbert knew his CGA.
When he went back to the store to ask for a repair he was given a form to sign stating he would pay any costs incurred. He refused to sign until the document was amended to include reference to his rights under the Act.
''It was woolly, but at least I wasn't committing myself to paying for it when I knew I didn't have to,'' he says.
He was then told the manufacturer had agreed to pay for the parts but that he would have to pay for the labour. He again reminded them that was ''totally illegal''.
The staff member's manner was good, ''but what she was saying was terrible'', Mr Colbert said.
''I think a lot of people would fall for that. They would sign that bit of paper or pay that bill.''
In the end, the repair was effected at no cost to him.
Before leaving the CAB office, I am told the rise of online trading is creating a whole new raft of problems. I try to contact the Ministry of Consumer Affairs to ask about the issue, but am told it was swallowed by the Ministry of Business, Innovation and Employment (MBIE) some time ago.
My questions are redirected to MBIE consumer issues team leader Joanne Kearney. Ms Kearney admits the Act is ''confusing and inconsistent'' when it comes to online selling.
This is because it was enacted ''before online auctions were common or even contemplated'', she says. As it stands, goods bought at auction or by tender from a trader are not covered by the Act.
But when you purchase at the `buy now' price this is not a sale `by way of auction' or `tender', Ms Kearney says. So, in this situation you are covered.
It is an important distinction. One which an Otago bidder recently learnt too late.
The man bought a car for about $20,000 through an online auction. But shortly afterwards, serious faults with the vehicle became apparent. He was understandably dismayed to discover he had no protection under the Act.
Ms Kearney also mentions extended warranties, about which I have heard the occasional grumble. To find out more I contact Sue Chetwin, who is chief executive of independent consumer information organisation Consumer New Zealand.
Consumer NZ gets about 400 inquiries a month, most of them about CGA conundrums and out-of-warranty worries.
Extended warranties are sold ostensibly to provide warranty protection beyond the end of the manufacturer's warranty. Ms Chetwin says they are expensive and usually not worth the money because they ''rarely provide any further assistance to the consumer than what is provided under the CGA''.
A survey conducted in 2009 showed two-thirds of New Zealanders were unaware extended warranties generally did not give them any extra protection.
So it is no surprise consumers believe sales staff (who may receive a commission for selling an extended warranty) when they tell them differently.
University of Otago student Josie Cochrane (21) learnt a lesson about extended warranties when her laptop computer battery malfunctioned in the middle of the year. She had bought an extended warranty but still spent more than a month battling the retailer trying to get it fixed. Then she contacted the Dunedin CAB consumer issues team who ''had it sorted very quickly,'' Miss Cochrane says.
''Through this I've learnt the kind of uselessness of extended warranties ... It seems to be just ripping people off.''
In the United Kingdom, extended warranty legislation was changed eight years ago. Included in the new law was a 45-day ''cooling-off period'' during which consumers could cancel extended warranties. The changes have led to a 21% drop in extended warranties.
The law in New Zealand needs to change too, Ms Chetwin says.
It certainly sounds like it. But first I want to know what those who represent traders make of it.
John Christie, who is chief executive of the Otago Chamber of Commerce, says ''naivety'' by retailers concerning the requirements of the Act is ''no excuse''.
But any changes to the law would need to be preceded by a ''big education process'' to bring retailers ''up to speed'', Mr Christie says.
He also suggests I contact Alan Preston, who is chairman of the chamber's retailers committee.
Mr Preston says, in his experience, a lot of people who claim a product is not ''fit for purpose'', given their intended use of it, have in fact bought the wrong item.
He has also had instances of people trying to claim a remedy under the Act when the product has been used commercially.
''I think many people don't understand the Consumer Guarantees Act does not apply to anything bought for a business,'' Mr Preston says.
Consumers can help themselves by thinking about their attitude, he adds.
''They [retailers] did not go out of their way to sell you something that was going to break,'' he says.
''If you go in ranting and raving you will come out worse off.''
Changes to the Act might ''clean things up'' and make it easier for both consumers and retailers, he says.
Change to consumer law has been in the offing for several years, I discover.
A search of the MBIE website reveals official discussion about consumer law reform began at least as early as 2009.
If those reforms become law, consumer rights will be strengthened and online trading issues will be sorted. The CGA will be extended to include goods and services bought from a business online, including through bidding in an online auction. Businesses that agree to deliver goods will be responsible for their timely arrival in good condition.
Those selling an extended warranty will have to explain to consumers what extra protection it gives beyond their existing entitlements under the Act. And consumers who buy an extended warranty will have five working days to cancel if they change their mind.
But the Consumer Law Reform Bill has been languishing in a political wilderness. It was first considered by Cabinet three years ago, passed its first reading in Parliament in February, 2012, and its second reading at the end of last year.
The Bill needs a third reading before it can become law.
A quick call to Parliament seeking an update results in an email from Minister of Consumer Affairs Craig Foss.
''It is a hugely important Bill,'' Mr Foss says.
''I expect to progress [it] in the next couple of weeks.''
What does ''progress'' mean? It might get a third reading before Christmas, comes the reply. Even if it does, it will be six months before the new delivery guarantee and the extended warranty changes take effect.
And then, its powers will still be nullified if consumers do not know and exercise their rights.
But now, I know mine. That knock on the door is probably the dishwasher serviceman.
Your rights: Consumer Guarantees Act - Rights and responsibilities
Your consumer rights under the Consumer Guarantees Act are that goods must:
• be acceptable quality, that is, last for a reasonable time;
• be fit for their particular purpose;match their description;
• match the sample or demonstration model;
• be a reasonable price (when the price is not set); and,
• have spare parts and repair facilities available.
Reasonable use
• You are responsible for looking after the goods. If there are instructions included with the product, read them and make sure you follow them.
Returning faulty gifts
Gifts are covered by the Consumer Guarantees Act, just as if you had bought the product yourself.
The Act does not say anything about proof of purchase, so a retailer should not refuse to remedy faulty goods because you cannot provide a receipt. A bank statement or packaging should help.
But even if the trader knows theirs is the only shop stocking those goods, or if the trader remembers selling the goods, they should not turn someone away simply because they do not have a receipt.
Disputes Tribunal
If a problem cannot be resolved with a trader or manufacturer, a claim can be taken to the Disputes Tribunal.
For more information, visit online at www.consumeraffairs.govt.nz.
Life expectancy of goods
Consumer NZ produces a regular report on the life expectancy of appliances. The most recent was in May.
• Refrigerators - 15+ years
• Ovens and stoves - 15+ years
• Microwaves - 8+ years
• Clothes driers - 15+ years
• Heaters - 5+ years (fan) and 10+ years (convection and radiant)
• Computers (desktop or laptop) - 5 years
• Televisions - 12+ years
