The ACL is supported by the Competition and Consumer Regulations 2010 (the Regulations) which contain additional requirements that businesses must follow to comply with the ACL, including requirements relating to voluntary warranties against defects offered by businesses.
Suppliers or manufacturers regularly offer voluntary warranties, or sometimes referred to as manufacturers warranty with their goods as a way to distinguish their product from others in order to gain a competitive advantage. These promises are called warranties against defects under the ACL.
As from 1 January 2012 a business must not offer a warranty against defects unless it complies with the following requirements:
- what the person giving the warranty must do so to honour the warranty; and
- what the consumer must do to be entitled to claim;
- include the following statement: “Our goods come with guarantees that cannot be excluded under the ACL. 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”.
- prominently state, in relation to the person giving the warranty, the person’s name, business address, telephone number and email address (if any);
- state the period or periods within which a defect in the goods or services to which the warranty relates must appear if the consumer is to be entitled to claim the warranty;
- set out the procedure for claiming under the warranty including the address to which the claim may be sent;
- state who will bear the expense of claiming the warranty and if the expense is to be borne by the person who gives the warranty, how the consumer can claim expenses incurred in making the claim; and
- state that the benefits to the consumer given by the warranty are in addition to other rights and remedies of the consumer under a law in relation to goods or services to which the warranty relates.
It is important to note that ‘warranties against defects’ are provided in addition to consumer guarantees, and do not displace them.
You can access further information on warranties against defects here. This link provides information material relating to the warranties against defects requirements for businesses.
If you need more help or advice on this issue, you may contact the ACCC Infocentre on 1300 302 502, or the ACCC Small business helpline on 1300 302 021.