Vacuum cleaner retail chain, Godfreys, has been fined $48,000 in the Manukau District Court after pleading guilty to 10 charges under the Fair Trading Act (FTA) relating to its extended warranty agreements.
The New Zealand-based company earlier pleaded guilty to the charges under the FTA over failure to disclose customer rights in extended warranty agreements. Between June 2014 and September 2015, the retailer sold over 3,000 non-compliant extended warranty agreements for over a year, which didn’t include information to customers that they could cancel the extended warranty within five days of buying it, the Commerce Commission said in a statement.
The company also failed to tell customers about their cancellation rights before signing them up to an extended warranty. Godfreys stopped selling extended warranties in September 2015.
Commissioner Anna Rawlings said Godfreys deprived over 3,000 consumers of information they should have had to help them assess what added benefits the extended warranty offered when compared with their existing rights under the Consumer Guarantees Act.
“The law aims to give consumers the information that they need to help decide if the additional protection offered by the extended warranty represents value for money when compared with rights that they already have under the Consumer Guarantees Act,” Rawlings said.
“It is essential that businesses selling extended warranties comply with these requirements and consumers remember that the Consumer Guarantees Act offers some protection whether or not they choose to purchase an extended warranty as well,” she added.
Godfreys, which sells vacuum cleaners and other cleaning products to both retail and commercial sectors, has been operating in New Zealand for approximately 15 years and has 31 stores nationwide.
Between June 17, 2014 and September 22, 2015, Godfreys sold extended warranties to consumers at an additional price when they purchased their goods. Warranties for products costing $200 – $599 were $49 until August 2015 and then $69 after that. Warranties for products over $600 were sold for $99.
