Simon Corbell is warning that extended warranties are mostly rubbish:
“Fair trading agencies across Australia have raised serious questions about the value of extended warranties, and whether they offer any greater protection than that already provided by the Australian Consumer Law (ACL).
Most consumers are offered an extended warranty, particularly when purchasing electrical equipment or whitegoods and for a fee this warranty can be extended beyond that provided by the manufacturer.
Mr Corbell said that in almost all cases consumers were already protected by consumer guarantees or ‘statutory warranties’ under Australian Consumer Law.
“Office of Regulatory Services inspectors will be surveying extended warranties in the market place in the coming months and assessing whether they measure up to the ACL and any claims made by retailers,” he said.
“In the meantime, consumers considering any extended warranties should ask what they offer above and beyond their existing rights, and decide if they are worth the extra money.”
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Don’t buy them. Don’t buy them. Don’t buy them. They’re good for one thing and that’s dollar signs for the retailers.
Mr Corbell said that in almost all cases consumers were already protected by consumer guarantees or ‘statutory warranties’ under Australian Consumer Law.
I really can’t see anything more than the obvious being stated here.
Unless, manufacturers are forced to provide 5 year warranty as a minimum on expensive television and white goods. Otherwise extended warranties will still be popular to avoid the tragedy of your investment dying on the first day of the fourth year (assuming 3 year warranty).
Or will ACL go in there and fight for me? I seriously doubt it.
…and this would be a busy day for Simon
c_c™ said :
agree. If you want a good extended warranty, buy from Costco.
Regarding statutory warranties, getting them observed by manufacturers is the tricky bit. I paid more than usual for a DVD player from Pioneer, because all Pioneer players have region encoding removed before shipping to the retailer, as standard (all should do it, but don’t). A few months out of the 1 year warranty, the player died quietly in the night.
I contacted Pioneer, full of zeal about my rights under implied warranty etc, and they said I should take it to the Pioneer repairer (some mob in Belco), and when the repairer found what was wrong with it, they MIGHT cover it under warranty. But to book the gadget into the repairer cost about twice the price of a new cheapie DVD player. So I thought stuff it, and got a cheapie from Costco (which WAS region encoded but that was easily removed).
We have a lot of rights, but getting them enforced is sometimes quite problematical. But I won’t buy Pioneer anything ever again. And I’ve just told a bunch of people about it too.
EvanJames said :
What value does your rant about region encoding add to the story?
Region locking is bad bad bad.
I mostly say no to extended warranty but recently got one for new washer.
Also, two words APPLE CARE!!!!!!
Comic_and_Gamer_Nerd said :
I can’t remember that last time I had a DVD player that took any notice of region encoding. I seem to have a recollection that there was a court judgement some years ago that it was a “restrictive trade practice” and therefore illegal in Australia. Of course, since then we’ve signed the so-called “free trade agreement” (never was there a greater oxymoron) with the US.
Comic_and_Gamer_Nerd said :
Want to be more specific?
c_c™ said :
Would you like a screen shot with that?
c_c™ said :
I assume it also is pretty worthless? If they sell a phone on a 24 month contract, I should have a reasonable expectation it will last 24 months.
Apple Care is an oxymoron. A bit like Microsoft Works.
I bought 6 larger items a couple of years ago and was also talked into extended warranties. Surprisingly I’ve managed to use them for everything except the fridge. I’ve had 4 repairs and 1 replacement on what should have been good quality products from leading manufacturers. At the time I wondered if it was a waste of money but I’ve ended up getting several thousand dollars worth of repairs and replacements for a few hundred dollars. They don’t make things like they used to.
Jivrashia said :
The relevant section in that document is on page 13, under the test for acceptable quality, particularly an item being durable:
durable – for example, the toaster must function for a reasonable time after purchase, without breaking down.
It’s still a little grey, and the following sections in the document outline some of the considerations applying, including:
This test takes into account:
> the nature of the goods – for example, a major appliance such as a fridge is expected to last longer
than a toaster
> the price paid for the goods – for example, a cheap toaster is not expected to last as long as a top-of the-range one
So if you went and bought a brand new washing machine, and it had a 1 year warranty, and then it broke down after 13 months, you’d have a strong case for a warranty repair. Nobody expects a washing machine to only work for a year before needing to be repaired or replaced, and consumer law safeguards us against that happening outside of a manufacturer warranty period. If you’d bought the best money could buy, you may have an argument for warranty repair 5 years later, where if you bought a cheapo one, maybe 3 years would be what you could argue (pulling numbers out of thin air here btw).
So in short, yes, consumer groups will fight for you, because the law is on our side – without the need for paying extra for extended warranties.
No apple care is a great service!
Myself and Mrs Spykler bought a 55′ LCD LED TV from the Guys who are Good in Belco, after a 20 minute lecture/snow job about the evils of malfunctioning TV’s from the assistant we purchased an extra 2 years of warranty..As we were walking out, I turned around and he was virtually high-fiving his colleague and laughing our way…Its all about the $$$..Nothing more.
p1 said :
Well that’s what I want to know, do they mean that in a good or a bad way.
AppleCare is way overpriced but they push it hard, mainly because the retailers have attachment targets on AppleCare.
c_c™ said :
Maybe not worth it on a phone or iPad, but if you’d don’t get it on any apple computer then you are poor and probably should not be spending that cash on a top market product or a dumbass
For once, Simon Corbell is offering good advice. This is exactly why I no longer accept “extended warranties”. Good to see the Office Of Regulatory Services are doing something useful, instead of waving the big stick around for the crime of giving out free plastic shopping bags.
Spykler said :
Unfortunately, now you know why. You paid for something that you already get for free. Things like TV’s are sold with razor thin margins these days, so to be able to sell an extended warranty along with it increases that margin hugely. If the guy you dealt with is working on commission, he probably earned at least double the commission he’d normally get from your sale simply by getting you to purchase the extended warranty.
c_c™ said :
p1 said :
When I entered my most recent contract (for a Samsung phone) I asked about extending the warranty to cover the life of the phone, as I’d done with my previous iPhone. I was told that I didn’t need to do that any more, because consumer law (not sure if this is just the ACT or nationally) now says that the warranty must cover the contracted period.
Which seems like a rare win for common sense.
Comic_and_Gamer_Nerd said :
The comma is the difference between helping your uncle Jack off a horse and helping your uncle Jack, off a horse.
Did you mean “No, apple care is great service”?
Pork Hunt said :
thatsnotme said :
I’ve been there. Had a 15 month old phone with an issue and took it back to the Telstra dealer. The young salesman tried to tell me it had a 12 month warranty. I told him that I was paying off the phone they provide over a fixed term and that if the phone no longer functioned then a phone plan was worthless to me. They could either fix the phone or cancel my contract so that I could sign up for a new one. He spoke to someone with an idea and they had no hesitation in fixing the phone. I’m sure it wasn’t their first time doing that.
Deref said :
The ACCC seems to have pulled back from taking strong action on this one. Some years back, the ACCC appeared as a witness in a case involving the PS3 (I think), during which appearance the ACCC said that in its opinion, region encoding was anti-competitive practise and therefore contravened our laws. It also said region encoding was clearly there to benefit the seller, not the buyer. Most retailers and some manufacturers took notice of this, and some took pro-active steps like Pioneer.
Oddly, the Samsung cheapie I got from Costco was actually manufactured to be region-free, and Costco in their American wisdom then had Region 4 installed. There were instructions on the web for getting rid of that. I later bought a Sony Blu-ray which according to the web was impossible to unencode without a special remote or a firmware upgrade, so I took it back.
Comic_and_Gamer_Nerd said :
haha, you’re a sucker. A total sucker. Maybe you don’t how to do maths, maybe you haven’t looked at industry failure rates. Either way, SUCKER!
And seriously – ‘top market product’ – I like Apple computers, I’ve sold them and use them myself, but they’re just circuit boards and cases put together in a Foxconn sweatshop.
Several yerars ago we bought a TV from Harvey Norman, with an extended warranty.
It died after the standard warranty had expired.
Harvey Norman couldn’t repair the TV or replace it with the same model, so they gave us back our money. That was enough to buy a new TV.
EvanJames said :
I don’t see what your problem is with their warranty service. Of course you’ll have to take it in to the repair agent to be assessed. They don’t know if you’ve tried to give the unit a drink of bourbon, or if your 3 year old has tried to play a piece of toast in it, or so on. All of this would void the warranty, obviously, and the manufacturer has the right to determine if something like this has happened.
Generally, when you take a piece of gear in for a warranty assessment there will be a fee, but it’s only payable if the warranty claim is rejected.
Your problem seems to be that they wouldn’t just accept your warranty claim without question. No manufacturer would.
EvanJames said :
Blu-Ray region encoding is hardware based and cannot be over-ridden on any device without actually opening the unit and modifying the circuit, not even with a special remote or firmware upgrade. Many Blu-Ray players will play DVDs from any region, but only local region Blu-Rays.
When you see a unit advertised as an all region Blu-Ray player, what they usually mean is that it’s a Blu-Ray player that will play DVDs from any region.
Leon said :
The point Simon Corbell is making though is that even if Harvey Norman hadn’t sold you extended warranty, they would have had to repair/replace/refund it anyway under Australian law. If they can’t repair or replace, they have to refund. Ergo, the extended warranty was a waste of money.
RadioVK said :
On a similar note though, that is another issue with extended warranties. The warranties normally specify the item has to be taken to one of the extended warranty company’s own agents for repair, not the manufacturer’s. Normally these are centralised outlets serving large area, in Canberra, you have to send stuff to Sydney at your own expense. For bulky items like AV receivers, it can cost more to send it for assessment than to pay for a local repair out of your own pocket.