Furniture and electrical chain Harvey Norman is now facing two class action lawsuits about its extended warranties. 

Launched just days apart from each other by different legal firms, the company is accused of selling extended warranties that offer “little or no value”. 

The argument is that customers already get that protection under the Australian consumer law — for free. 

If you don’t know the ins and outs of the litigation, you’re not alone. 

Let’s run through the basics of warranties and Australian consumer law. 

Expired warranties don’t mean everything

“The first thing to realise is the warranty doesn’t define limits of people’s rights,” says Jeannie Paterson, professor of law at the University of Melbourne. 

That’s because, even if the warranty has expired, Australian consumer law still applies. 

And it could mean that, if a product you’ve bought stops working or falls apart, you’re entitled to either a repair, replacement or a refund after the warranty period. 

What’s the Australian consumer law?

In essence, it’s a national set of rules signed to quash dodgy business practises. 

If you want to get really specific, it’s a lengthy bit of legislation called the Competition and Consumer Act 2010, which you can view in full at the Federal Register of Legislation. 

For the sake of this article, we’re going to focus on the part of the law that talks about buying a product in Australia. 

What are the rules?

Basically, what you buy must be of an acceptable quality and, if it’s not, the business has to do something about it. 

Here’s what the law says:

If:

 (a) a person supplies, in trade or commerce, goods to a consumer; and

 (b) the supply does not occur by way of sale by auction;

there is a guarantee that the goods are of acceptable quality.

“The consumer guarantee provisions in the Australian Consumer Law is designed to allow consumers to receive a remedy where there has been a failure to meet these consumer guarantees by the business,” an Australian Competition and Consumer Commission (ACCC) spokesperson said. 

“Remedy” in this context means making amends for the problem. 

That could mean the supplier or manufacturer fixing it, replacing it or — in depending on the circumstances — giving you a refund.  

How do I make sure I’m covered by this guarantee?

You’re automatically covered when you buy something. 

There are a few intricacies and exceptions to this — like, if you buy something at auction or from a garage sale.  

Remember, this guarantee is separate to a warranty the manufacturer or supplier might offer. 

What does ‘acceptable quality’ mean?

The legislation says the product must be:

(a) fit for all the purposes for which goods of that kind are commonly supplied; and

(b) acceptable in appearance and finish; and

(c) free from defects; and

(d) safe; and

(e) durable;

as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to (…)

 (a) the nature of the goods; and

 (b) the price of the goods (if relevant); and

 (c) any statements made about the goods on any packaging or label on the goods; and

 (d) any representation made about the goods by the supplier or manufacturer of the goods; and

 (e) any other relevant circumstances relating to the supply of the goods.

How long does the guarantee last?

There’s no set time limit. 

While a lot of warranties will say things like “24 months” or “three years”, that’s not the case with consumer law. 

Here’s how the ACCC describes it on its online fact sheet about consumer rights:

“These consumer rights … continue for a reasonable time depending on the product or service.”

“That is the grey area,” Professor Paterson says. 

“I’d suggest at least the time of the free warranty – but I’d also expect it to go beyond that.”

But you’d have to make the argument to the supplier or manufacturer that it’s responsible for fixing the problem. 

And this can take time and money. 

“Here’s the thing – the problem for consumer claims is that they’re generally small amounts of moey compared to cost of litigation,” Professor Paterson says. 

But if the product you bought is still within warranty — extended or otherwise — you probably won’t have to make that argument. 

Some might think avoiding the process of arguing your case would make an extended warranty worthwhile. 

But Professor Paterson says customers might not fully understand what they’re paying for and questions whether the pricing for extended warranties. 

What should I do if something doesn’t work anymore?

The first step is to contact the business, explaining the problem and asking the business to remedy this. 

The ACCC has an online complaint letter generator tool which will help you write a letter to the company you bought the product from. 

This also applies to services.

You could take the matter to a legal professional and have it heard in your jurisdiction’s small claims court or tribunal that hears consumer and fair trading issues.

The ACCC has a list of a bunch of different places you can go to for consumer help depending on what state or territory you’re in. 

You can also report your issue to the ACCC.