VHA amends mobile handset warranties after ACCC investigation

Vodafone Hutchinson Australia has been slammed by the Australian Competition and Consumer Commission for allegedly misrepresenting consumer rights in regards to warranties for faulty mobile handsets.

The company has offered enforceable undertakings including providing all pre-paid customers who purchased their mobile phone plan before December 31, 2009 an express repair warranty for 12 months from the date of purchase.

The ACCC said in a statement the enforceable undertakings were accepted as the result of an investigation into VHA’s treatment of consumer rights.

It said it was concerned that during May 1, 2008 – June 8, 2009, prior to the merger of Hutchison and Vodafone, Hutchison implemented a strategy which would involve staff making claims to customers the only remedy for a faulty mobile phone was repair.

The company told consumers with 15-day old faulty mobile phones they were only entitled to a repair. In making these claims, the company said it had likely breached the Trade Practices Act.

“Suppliers of goods and services need to realise the Trade Practices Act implies certain statutory rights into consumer contracts. Mobile phone retailers need to know that often consumers’ statutory rights will extend beyond the manufacturers’ warranties,” ACCC chairman Graeme Samuel said in a statement.

“Statutory rights give consumers a basic, guaranteed level of protection for goods and services they acquire and such rights cannot be excluded or limited by suppliers. In fact, any representation by a supplier which seeks to limit the statutory rights available to consumers is illegal.”

Samuel also said VHA has undertaken for a period of three years to extend the “early life failure” period during which replacement mobile phones are provided, from 14 days to 28 days, and provide all customers who acquired a service contract before December 1 an express repair warranty for the length of that contract.

It additionally accepted undertakings to provide pre-paid customers who acquired handsets on or before January 1, 2010 a 24-month express repair warranty, to take reasonable steps to provide a loan phone to customers while repairs are being made and take reasonable steps to ensure repairs are completed quickly.

The ACCC also noted VHA’s “significant” acknowledgement of circumstances where a consumer is entitled to a replacement outside the early-life failure period, but prior to the service contract coming to an end.

Samuel said the ACCC often receives complaints regarding long repair times with no loan handset being provided, consumers being told they can only receive a repair and not a replacement and consumers being told that after a 12-month warranty period no remedy is available despite being locked into a 24-month contract.

“At minimum, they need to ensure consumers have access to a reasonable remedy for the entire period of their service contract. It is simply not good enough that a customer is tied into a service contact for two years when the retailer is only promising to fix a faulty mobile phone for the first 12 months.”