Calls to make ‘no refund’ claims illegal as retailers snub consumer law

Consumers should not be deterred from seeking replacement, repair or refunds for faulty and damaged goods just because of limitations retailers’ claim to have on their warranties or guarantees.

However, the onus is very much on the individual to pursue a satisfactory remedy with the retailer, leaving many deciding it is all too hard and prompting calls to make non-compliance with obligations under consumer law illegal.

The ACCC supports moves to changing the law to make business non-compliance with consumer guarantee obligations illegal.Credit: Michel O'Sullivan

The Australian Competition and Consumer Commission (ACCC) has acted against businesses that mislead consumers but, without a change in the law, it cannot act against a business for not honouring the rights that consumers have under law.

“When you buy a product or service from a business, you have automatic rights called consumer guarantees under the Australian Consumer Law,” says ACCC deputy chair Catriona Lowe.

“Those rights exist regardless of claims that are made by retailers about the period of time in which a repair, replacement or refund may be obtained,” Lowe says.

The ACCC received 28,000 reports and enquiries during 2023 about consumer guarantees or warranties. That was about 30 per cent of the more than 98,000 total contacts, excluding scams.

Motor vehicles, electronics, whitegoods and homewares were the most reported categories of consumer products.

Statements by retailers that a “product is out of warranty, so we can only repair it for a fee”, or “no refunds under any circumstances” or “to be eligible for a refund, you must return the product within 10 days” do not override consumer law.

A report by the Consumer Policy Research Centre and the Consumer Action Law Centre last year showed the extent to which complaining about a car bought through a dealer is legalistic, difficult, costly and often deeply unfair to the consumer.

It found a used-car complaint can require consumers to go through 60 steps in Victoria and that is assuming everything goes smoothly.

“Across the whole process of dealing with a faulty car, there are too few measures that encourage car dealers to remedy problems in a fair and timely way,” the report says.

Erin Turner, the chief executive of the Consumer Policy Research Centre, says: “We need law reform that includes financial penalties for those businesses that thumb their nose at the consumer guarantees [within Australian consumer law],” Turner says.

Moves are being made, albeit very slowly, to strengthen consumer law to ensure a higher level of compliance by businesses with their obligations to repair, replace or refund. The change would make non-compliance illegal, with businesses liable for financial penalties.

The ACCC’s Lowe says the competition and consumer watchdog supports reforming consumer law so that it would be illegal for businesses not to honour the guarantee rights.

It would like manufacturers put under the same obligations, as retailers themselves can have difficulties with manufacturers.

If, after contacting the business, you are making no headway, the ACCC has an online “complaint letter” that consumers can use as a template to assert their rights.

The ACCC also has a guide to help navigate if the issue is a major or minor defect as that affects the remedies available. For example, a business does not have to offer a replacement or refund for a minor problem, although it can choose to do this.

Consumers seeking assistance with a dispute could contact their local state or territory consumer protection agency, but it can be a significant undertaking for consumers to work their way through the process.

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