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Extended warranties

Is it worth buying an extended warranty?

Fair Trading Act 1986, ss 36T-36W

Every product that you buy from a business will already be covered the Consumer Guarantees Act (see: “Automatic guarantees when buying from a business”).

Some products will offer manufacturer’s warranties, which are included in the purchase price. Manufacturers warranties guarantee that the maker of the product will repair or replace faulty products for a certain period.

Sometimes you will be offered an extended warranty, which you pay extra for. These should provide protections over and above what you’re already entitled to – for example, by extending the time period or by including cover for accidental damage.

If you’re buying an extended warranty, make sure that you are not just paying extra for protections that you are already entitled to under the manufacturer’s warranties, the Consumer Guarantees Act, and/or your own home or contents insurance.

You have the right to cancel your extended warranty within five working days and get your money back.

Example: Expired manufacturer’s warranty

Your washing machine broke just after the express one year manufacturer’s warranty expired. The Consumer Guarantees Act’s requirement of acceptable quality still applies and the retailer should pay for the cost of repairs, since a reasonable washing machine should last for longer than one year.

What information should be included with an extended warranty agreement?

Fair Trading Act 1986, s 36U

The person or business offering you an extended warranty have a legal obligation to give you certain information. If they don’t, the Commerce Commission can fine them no more than $2,000. They must make sure:

  • the agreement is in writing. The wording should be clear, easy to read, and in plain language
  • you get a copy of the agreement:
    • if the sale is in person, you should be given a copy of the agreement straight away
    • if the sale was over the phone, you should be sent a copy within the next five working days
  • the agreement clearly states how much you have to pay for the extended warranty
  • the agreement clearly states all the terms and conditions of the extended warranty, including:
    • each side’s rights and obligations, and
    • the warranty’s duration and expiry date (including whether or not it expires when you make a claim under it)
  • the agreement is dated, and
  • on the front page, the agreement includes:
    • a summary of the rights, remedies, and automatic guarantees you’re already entitled to under the consumer guarantees act, compared with the protections offered by the extended warranty,
    • a summary of your right to cancel the warranty (see below), and
    • the name, street address, phone number and email address of the person or business that is offering the warranty.

Additionally, before you agree to anything, the person or business offering the extended warranty must also tell you verbally about your right to cancel the agreement, and how to do so. The verbal requirement only applies if it’s reasonably possible to do so (for example, if you buy the goods or services in person or over the phone).

Can I cancel an extended warranty agreement?

Fair Trading Act 1986, s 36V

If the person or business offering the warranty complies with their obligations (you’ve been given a copy of the extended warranty agreement and you were given all the required information), you can cancel the agreement but you have a time limit of five working days after you received the copy.

If you weren’t given a copy, or they didn’t comply with their obligations (see above), there is no time limit and you can cancel at any time. However, this only applies if their failure to comply was significant and caused you a disadvantage – if it was a minor failure, the five working days time limit still applies.

To cancel, contact the person or business offering the warranty (using the contact details given on your agreement) and let them know that you want to cancel the agreement. There’s no particular process or words you have to use.

The warrantor must then repay you everything you’ve paid for the warranty, in full and without any deductions.

Example: Cancelling an extended warranty

You buy a phone and pay for an extended warranty in case you drop it. You then realise that this is covered by your contents insurance. You can cancel the extended warranty as long as you do this within five days and get a full refund.

Next Section | Quotes and estimates

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Consumer protection

Where to go for more support

Legal information and support groups

Community Law

Your local Community Law Centre can provide you with free initial legal advice.

Find your local Community Law Centre online: www.communitylaw.org.nz/our-law-centres

Consumer Protection

The Consumer Protection website has useful information on a range of consumer topics. Consumer Protection is part of the Ministry of Business, Innovation, and Employment (MBIE).

Website: www.consumerprotection.govt.nz
Email: cpinfo@mbie.govt.nz
Phone: 0508 426 678 (0508 4 CONSUMER)

Consumer NZ

The Consumer NZ website provides a wide range of information on consumer issues and template letters you can use to write to traders to enforce your rights.

Website: www.consumer.org.nz
Email: info@consumer.org.nz
Phone: 0800 226 786 (0800 CONSUMER)

Commerce Commission

The Commerce Commission enforces the laws against misleading and deceptive conduct by traders (the Fair Trading Act) and the consumer credit legislation (the Credit Contracts and Consumer Finance Act). The Commission provides information on these areas on its website.

Website: www.comcom.govt.nz
Email: contact@comcom.govt.nz
Phone: 0800 688 5463

To make a complaint online: comcom.govt.nz/make-a-complaint
To read consumer rights in different languages: comcom.govt.nz/consumers/read-about-your-consumer-rights-and-business-responsibilities-in-another-language

Citizens Advice Bureau (CAB)

CAB provides free, confidential and independent information and advice.  See CAB’s website for valuable information on a range of topics.

Website: www.cab.org.nz
Phone: 0800 367 222
Facebook: www.facebook.com/groups/citizensadvicenz

Find your local CAB office: www.cab.org.nz/find-a-cab

Product safety

This agency oversees the safety of consumer products that are not food, medicines or road vehicles. Their website has information for consumers about safety standards, product recalls and using products safely.

Website: www.productsafety.govt.nz
Email: cpinfo@mbie.govt.nz
Phone: 0508 627 774

Products recalled: www.productsafety.govt.nz/recalls

FinCap and Money Talks

FinCap is a non-government organisation providing free financial mentoring services.

Website: www.fincap.org.nz
Email: kiaora@fincap.org.nz
Phone: 04 471 1420

MoneyTalks is a financial capability helpline operated by FinCap. The Financial Mentors offer free, confidential advice by phone, text, email and live chat.

Email: help@moneytalks.co.nz
Phone: 0800 345 123
Text: 4029
Live chat: www.moneytalks.co.nz

Motor Vehicle Traders Register

Before purchasing off a motor vehicle trader, check if they are registered.

Website: www.motortraders.med.govt.nz
Phone: 0508 MOTOR TRADERS (0508 668 678)

Buying a car privately

Search the PPSR register to see if there is any security interest registered against a vehicle. This can be done for a small fee by registering to check online

Website: www.ppsr.companiesoffice.govt.nz

Check to make sure a car that you’re considering buying hasn’t been listed with the police as stolen.

Website: www.police.govt.nz/stolenwanted/stolen-vehicles

Other tips for buying a car privately from YouthLaw: www.youtube.com/watch?v=aK8irFAn1as


Disputes Tribunal

The Disputes Tribunal can deal with claims up to the value of $30,000.  It is less formal than a court and cheaper.

Website: www.disputestribunal.govt.nz/about-2
Phone: 0800 COURTS

Motor Vehicle Disputes Tribunal

The Motor Vehicle Disputes Tribunal can deal with claims up to the value of $100,000.  It can only deal with disputes relating to registered traders (or those that should be registered).

Website: www.justice.govt.nz/tribunals/motor-vehicle-dealer-disputes
Phone: 0800 268 787

Dispute Resolution Schemes

There are four dispute resolution schemes for consumers dealing with lenders and other credit providers. Contact the scheme your service provider has registered with.

  1. Financial Services Complaints

Website: fscl.org.nz
Phone: 0800 347 257
Participants list: fscl.org.nz/search-financial-service-providers 

  1. Insurance & Financial Services Ombudsman

Website: www.ifso.nz
Phone: 0800 888 202
Participants list: www.ifso.nz/complaints#find-a-participant

  1. Banking Ombudsman

Website: www.bankomb.org.nz
Phone: 0800 805 950
Participants list: bankomb.org.nz/the-complaint-process/bank-participant

  1. Financial Dispute Resolution Service

Website: www.fdrs.org.nz
Phone: 0508 337 337
Participants list: fdrs.org.nz/become-a-scheme-member/scheme-member-search

Utilities Disputes Commissioner

The Commissions helps with complaints about electricity, gas, water and some fibre services.

Website: www.udl.co.nz
Phone: 0800 22 33 40

Participants list: www.udl.co.nz/making-a-complaint/complaint-form

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