8.1 Extended warranties are, in part, often marketed to provide ‘peace of mind’ to consumers over and above statutory implied terms and the manufacturer/importer’s voluntary warranty. However, the evidence presented to CCAAC suggests that extended warranties may not be justified in some cases. This is especially the case when retailers and manufacturer/importers are required to remedy faults or replace goods under the existing statutory regime.
8.2 Greater consumer awareness of statutory consumer guarantees should, in many cases, reduce consumer perceptions about the need for extended warranties where they are not justified. In preparing consistent national information and guidance for consumers on statutory consumer guarantees, Australia’s consumer agencies should include information about extended warranties and how these interact with statutory consumer guarantees.
Findings (continued)
8.3 CCAAC proposes that the issues around extended warranties be considered as part of the review of enforcement and administrative arrangements under the Intergovermental Agreement for the Australian Consumer Law, or earlier if required. In addition, CCAAC finds that consumer agencies should consider a closer examination of the extended warranties market, in particular, the way in which extended warranties are sold.
Dealing with motor vehicle issues (Chapter 9)
Findings
9.1 CCAAC does not consider the case for the introduction of a separate ‘lemon law’ for motor vehicles to have been made at this time. However, Australian governments should monitor the effectiveness of the national statutory consumer guarantees as they apply to motor vehicles, including gathering data about the number and nature of complaints and disputes about statutory consumer guarantees involving new and used motor vehicles.
9.2 The new national statutory consumer guarantees should cover new and used motor vehicles.
9.3 Australian consumer agencies should provide clear, consistent information about the application of statutory consumer guarantees to motor vehicles, particularly about consumers’ rights, businesses’ obligations and the options for resolving disputes about statutory consumer guarantees as they relate to motor vehicles.
9.4 State and Territory governments should give active consideration to the appointment of specialist adjudicators and assessors to deal with disputes involving motor vehicles and statutory consumer guarantees.
Online sales (Chapter 10)
Finding
10.1 Online transactions should be covered by the national statutory consumer guarantees in the same way as in store transactions.
Liability limitations (Chapter 11)
Findings
11.1 Consistent with the intention of the Australian Consumer Law, the new statutory consumer guarantees should apply to all sectors of the economy.
11.2 For consistency, the Australian Consumer Law should include a national approach to the limitation of liability for recreational services, including a consistent definition of ‘recreational services’. CCAAC considers that the definition of ‘recreational services’ in the Trade Practices Act 1974, which also applies in a number of other jurisdictions, is too broad given the stated policy intention that the limitation should only cover ‘inherently risky’ activities.
Auctions (Chapter 11)
Findings
11.3 The national statutory consumer guarantees should continue to exclude goods and services purchased at auctions conducted by an auctioneer, including those that are conducted online.
11.4 Goods and services sold by businesses directly to consumers through so called ‘online auctions’ (except for those conducted by an auctioneer) should be covered by national statutory consumer guarantees. The legislation should clearly state that such ‘online auctions’ do not fall within the definition of an ‘auction’ for the purposes of national statutory consumer guarantees.
1 Consumers in a changing marketplace
Context of the review
The Australian Government, together with the States and Territories, is undertaking the most significant and far reaching reform of consumer laws for a generation. The Australian Consumer Law (ACL) will include a single set of generic consumer laws based on the consumer protection provisions in the Trade Practices Act 1974 (Cth) (TPA).
The Productivity Commission (PC) in its 2008 Review of Australia’s Consumer Policy Framework recommended that the adequacy of existing legislation related to implied conditions and warranties (implied terms) should be examined as part of the development of the new consumer law.1 The reforms seek to remove inconsistencies across jurisdictions and provide a nationally coherent approach to the purchase and use of consumer goods and services.
