Vacuum cleaner retailer Godfreys has pleaded guilty to 10 charges from the Commerce Commission under the Fair Trading Act (FTA) for failing to inform customers of their rights in extended warranty agreements.
‘The charges relate to more than 3000 extended warranty agreements Godfreys sold to customers between 17 June 2014 and 22 September 2015’.
Five of the charges from the consumer watchdog relate to ‘the retailer’s failure to provide written advice to customers of their rights under the Consumer Guarantees Act and the right of customers to cancel extended warranties within five days’.
“The other five charges relate to Godfreys’ failure to verbally advise consumers about their cancellation rights before they entered into the extended warranty agreement,” stated the commission.
“This case is the first prosecution which focusses on the new FTA provisions imposing specific obligations on the sale of extended warranty agreements, which came into force in 2014.”
The new FTA provisions require warrantors to explain in extended warranty agreements that some guarantees are already provided to consumers under the Consumer Guarantees Act (CGA). Warrantors must also provide information on CGA guarantees and the protections sold in an extended warranty agreement.
Godfreys New Zealand general manager Chris Mason said that as soon as the company became aware that the warranty agreements did not comply with the law, it contacted customers and offered a full refund on the warranty cost.
“The company has cooperated fully with the commerce commission’s enquiries and has ensured its policies and procedures now align with consumer law,” he said.
“We apologise to our customers who purchased extended warranties… and who may have been impacted by the inadequate disclosure of the key terms of those warranties.”