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New Zealand consumers to benefit more from extended warranties

Jun 19th, 2014 | By | Category: Front Page Layout, Latest News, News

Display kitchen in electronics store
CONSUMERS are the winners under changes to the Fair Trade Act, particularly those wishing to purchase extended warranties.

The Fair Trade Act (FTA) makes it illegal for businesses to mislead consumers, give false information, or use unfair practices.

Standard warranties cover the consumer for problems arising during a specified time period, but the extended warranty differs because it’s purchased separately at an additional cost.

The extended warranty gives consumers longer protection against a number of measures and the FTA now requires a written copy of the extended warranty be given to the consumer at the time of purchase.

All information relating to the agreement must be clearly stated in plain language and include when it expires and the price paid for the addition.

Other changes to the FTA include a five day cool down period.Extended warranty brochures

This gives the consumer the right to cancel the agreement within five days of receiving a written copy of the agreement.

Previously the law did not cover the five day cool down period and if a consumer purchased the extension they didn’t have the right to cancel the contract.

Commerce Minister Craig Foss says these changes will strengthen consumers’ rights and define business compliance to ensure businesses are operating on a level playing field.

“Businesses will be more certain about their rights and obligations and consumers will be protected if there is an issue with the goods or services they’ve purchased,” he says.

He is confident that the changes will ensure customers are well informed and thinks competition will improve in the marketplace.

Large retailer Dick Smith released a statement yesterday saying that they take their obligations under the FTA seriously and that changes applicable to them like the 14 day cooling period, have already been incorporated into their extended warranty.

The changes to the Fair Trading Act came into force this week.

 

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