General policy statement
This Bill amends the Consumer Guarantees Act 1993 (the principal Act) to improve its operation in 2 areas in relation to extended warranties, and the supply of goods and services by suppliers through a competitive bidding process using an online trading facility. Suppliers are defined in the principal Act as persons who, in trade, supply goods and services to consumers.
The principal Act came into force in April 1994 to amend the law relating to the guarantees given to consumers upon the supply of goods or services, and the rights of redress against suppliers and manufacturers in respect of any failure of goods or services to comply with such guarantees.
Extended warranties are typically sold to consumers when they purchase electrical items. Generally, these warranties offer no further protection to the consumer beyond the rights and remedies they already have under the principal Act. This Bill provides that consumers are to be informed about whether an extended warranty they are considering purchasing provides any benefit, right, or convenience that is greater than the rights under the principal Act. The Bill also provides for a cooling-off period once an extended warranty has been purchased. This will allow consumers to reconsider whether to continue with the extended warranty and if they decide not to do so within the cooling-off period they will be entitled to a full refund of the amount paid for the warranty.
Competitive online sales have become increasingly popular in New Zealand. There has been some debate about whether online sales are covered by the principal Act. This Bill seeks to clarify this issue by specifically providing that online sales are covered. This will mean, for example, that a consumer who is supplied with a fridge by a supplier via an online competitive bidding process would attract the same rights as if the same fridge was purchased from the bricks and mortar store of the same supplier.
Clause by clause analysis
Clause 1 is the Title clause.
Clause 2 provides for the Bill to come into force on the day after the date on which it receives the Royal assent.
Clause 3 provides that the Bill amends the Consumer Guarantees Act 1993.
Clause 4 sets out the purposes of the Bill.
Clause 5 inserts new sections 15A and 15B to provide for rights in relation to extended warranties, namely rights in relation to disclosure of certain information and a cooling-off period in which to reconsider the purchase of an extended warranty.
Clause 6 amends section 41 by adding new subsection (4) to clarify that the guarantees provided for under section 5 apply to supply of goods and services by a supplier through a competitive bidding process using an online trading facility.