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Simon warns about extended warranties

By johnboy - 16 January 2013 45

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.”

What’s Your opinion?


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45 Responses to
Simon warns about extended warranties
Spykler 6:46 pm 16 Jan 13

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.

Comic_and_Gamer_Nerd 6:40 pm 16 Jan 13

No apple care is a great service!

thatsnotme 6:32 pm 16 Jan 13

Jivrashia said :

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.

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.

MissChief 6:02 pm 16 Jan 13

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.

Roundhead89 5:18 pm 16 Jan 13

Apple Care is an oxymoron. A bit like Microsoft Works.

p1 5:18 pm 16 Jan 13

c_c™ said :

Comic_and_Gamer_Nerd said :

Also, two words APPLE CARE!!!!!!

Want to be more specific?

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.

Pork Hunt 5:10 pm 16 Jan 13

c_c™ said :

Comic_and_Gamer_Nerd said :

Also, two words APPLE CARE!!!!!!

Want to be more specific?

Would you like a screen shot with that?

c_c™ 4:57 pm 16 Jan 13

Comic_and_Gamer_Nerd said :

Also, two words APPLE CARE!!!!!!

Want to be more specific?

Deref 4:54 pm 16 Jan 13

Comic_and_Gamer_Nerd said :

Region locking is bad bad bad.

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 4:47 pm 16 Jan 13

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!!!!!!

Pork Hunt 4:41 pm 16 Jan 13

EvanJames said :

c_c™ said :

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.

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.

What value does your rant about region encoding add to the story?

EvanJames 4:02 pm 16 Jan 13

c_c™ said :

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.

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.

Chop71 3:53 pm 16 Jan 13

…and this would be a busy day for Simon

Jivrashia 3:28 pm 16 Jan 13

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.

c_c™ 2:39 pm 16 Jan 13

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.

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