Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Jeweller Michael Hill fined $169,000

29 November 2018
Release no. 83


Jeweller Michael Hill fined $169,000 in extended warranty case

Jewellery retailer Michael Hill New Zealand Limited (Michael Hill) has been fined $169,000 in the Wellington District Court today following a Commerce Commission investigation into its extended warranty product.

Michael Hill admitted 12 charges that its Professional Care Plan (PCP) failed to comply with the extended warranty disclosure requirements of the Fair Trading Act between 31 May 2017 and 30 May 2018.

The PCP includes various services to prolong the life and maintain the appearance of the jewellery item. The PCP documentation supplied to customers failed to include all of the required information on the front page, including:
• comparing the protections consumers automatically have under the Consumer Guarantees Act (CGA) with the protections offered by the PCP
• an adequate summary of consumer rights and remedies under the CGA
• a summary of the consumer’s right to cancel the PCP

Michael Hill also admitted one charge that it misled consumers by adding the cost of the PCP onto the price of a bracelet, without the knowledge of a Whangarei couple who bought it in June 2016. The couple were later refunded the cost of the PCP after complaining to Michael Hill.

Commissioner Anna Rawlings said “the law clearly sets out the information that must be provided to consumers when selling an extended warranty. That information helps consumers to decide whether an extended warranty offers them value over and above the rights they already have under the CGA. They can then decide whether it is worth the extra cost. The cost of the extended warranty should be made clear. Where the required information is not provided, consumers who purchase these products may be able to cancel their agreements and obtain a refund of the cost of the warranty.”

In sentencing Judge DRW Barry said the conduct was a significant set of failings, not a mere minor oversight. It “impugns the objectives of the FTA as consumers had no immediately discernible comparison between their rights under the CGA and those covered by the PCP. The financial harm to the couple [the consumers] was caused by the conflation of the warranty price with the price of the bracelet. The consumers were effectively ‘guiled’ into paying for the warranty product.”

Background

Guidance for businesses
The Commission has published this fact sheet for businesses, on selling extended warranties.

The key requirement is that the front page of an extended warranty document must contain key information, including a summarised comparison between the relevant CGA guarantees and the protections provided by the extended warranty agreement.

The rules are intended to help consumers make informed choices about whether they are better protected with an extended warranty than without one, whether they want or need the extended warranty, and whether it is worth the price they are required to pay.

Advice for consumers
Our website has advice for consumers, including episode 10 of the Commission’s animated series It’s All Good which focuses on extended warranties.

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Marsden Pipeline Rupture: Report Calls For Supply Improvements, Backs Digger Blame

The report makes several recommendations on how the sector can better prevent, prepare for, respond to, and recover from an incident. In particular, we consider it essential that government and industry work together to put in place and regularly practise sector-wide response plans, to improve the response to any future incident… More>>

ALSO:

Oil Scare: Trump Authorises Use Of Emergency Crude Stockpile

The New Zealand dollar fell against the US dollar after President Donald Trump authorised the use of the country's emergency crude stockpile after the weekend attack on Saudi Arabia’s major oil facilities. More>>

ALSO:

Pre-Post-Brexit Deal Talks: UK Trade Minister Visits Wellington

New Zealand should get a better deal for exports of sheepmeat, beef and dairy products into the United Kingdom after Brexit, the British Minister of State for Trade, Liz Truss, said in Wellington today. More>>

ALSO:

Not-Very Well: Tamarind Halts Tui Drilling; OMV Assesses Options

Tamarind Resources has halted drilling at its Tui oil field off the Taranaki coast after the first of the three planned wells came up dry. Managing director Ian Angell says that despite the “unexpected” result from the first well, the firm believes the other two prospects are worth pursuing. More>>

ALSO:

Seeking 'Clarity': Crown To Appeal Southern Response Decision, Offers Costs

“It is our intention that the clarity that will come from the outcome of these proceedings will enable the Crown to work with Southern Response to provide a soundly based proactive solution to those people that are affected.” More>>