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Shoppers misled about legal rights

Retailers are continuing to mislead consumers about their legal rights by promoting extended warranties, a Consumer NZ mystery shopping survey has found.

Retailers are continuing to mislead consumers about their legal rights by promoting extended warranties, a Consumer NZ mystery shopping survey has found.

Selling extended warranties for home appliances is a lucrative sideline for retailers, said Consumer NZ's deputy chief executive David Naulls.

"But if you're buying goods for personal use, you don't usually need one. You already have strong after-sales rights under the Consumer Guarantees Act."

Despite this, Consumer NZ's mystery shop of Bond & Bond, Harvey Norman and Noel Leeming stores in Wellington shows little has changed since it visited the same retailers in 2007, finding that extended warranties continue to be sold with misleading advice about shoppers' legal rights.

"Sales staff told us that if we did not buy an extended warranty – which can cost several hundred dollars – then we would have to go back to the manufacturer if the product failed," said Naulls.

"This advice is wrong. The Consumer Guarantees Act obliges retailers to guarantee the products they sell are of an acceptable quality. If a new product fails, and you haven't caused the fault, you go back to the retailer to get the problem fixed. You don't have to battle it out with the manufacturer."

It is an offence under the Fair Trading Act for retailers to try to sell an extended warranty by claiming the consumer would otherwise have no protection.

Consumer NZ also found Bond & Bond's and Noel Leeming's extended warranty brochures contained misleading information that risks breaching the Fair Trading Act and has informed the Commerce Commission.