20th December 2023
Law firm Maurice Blackman has recently commenced a class action against JB Hi Fi, claiming that extended warranties sold to consumers provide no more than the rights available to them under the consumer guarantee.
“What we’re alleging in the class action is that JB Hi-Fi has been selling extended warranties that essentially offer Australian consumers the same thing as what they already get for free under the Australian Consumer Law,” Miranda Nagy, principal lawyer for Maurice Blackburn said.
One point missed in the reporting on this is JB Hi Fi’s detailed Minimum Voluntary Warranty Policy outlining, for example, a matrix of duration (since purchase) and value with corresponding remedies. It serves as a kind of interpretation of the consumer guarantee (JB Hi Fi’s own interpretation), outlining when and under what circumstances a consumer can expect to receive an exchange, refund, or repair.
- Extra Care (warranties sold) includes ‘Replace’ cover for products purchased for less than $1000, during the period commencing 12 months after purchase/delivery, and ending 3 years after purchase/delivery.
- Under the Minimum Voluntary Warranty Policy, these same products fall into the Green, Orange and Blue categories depending on Price & Period of Cover. In summary they offer, using excerpts from the policy:
- Green: the customer can request an exchange or refund of the original purchase price. Alternatively, customers can request repair free of charge in accordance with the manufacturers warranty.
- Orange: the customer can request repair free of charge by an approved manufacturer’s repairer
- Blue: you can discuss your concerns with a JB Hi-Fi Store Manager who is authorised to provide an alternative remedy where appropriate
- Products purchased for less than $1000, but more than 3 months ago, are coded Orange or Blue and therefore do not include the exchange or refund remedy (where an extended warranty was not purchased).
- For the sake of illustration
- A pair of Noise Cancelling Headphones*, RRP $500-600, with a one year warranty, purchased 18 months ago, appears to be coded orange (no exchange).
- After two years they would be coded blue.
- The first 12 months is covered by the manufacturer’s warranty.
- The extended warranty on this (Extra Care) would cost $117.80, and cover the second and third years after purchase, but the second year is covered by the Minimum Voluntary Warranty.
- So you pay for cover in the third year, and a guarantee to what the company already states it will offer in the second year, and the remedy would presumably be considered ‘green’ rather than ‘orange’.
- If you brought those headphones in 6 months after purchase, and they were faulty, they would be covered by the manufacturer’s warranty. If you brought them in 18 months after purchase, the Minimum Voluntary Warranty policy would point to ‘repair’ while Extra Care would point to ‘replace’. If you brought them in after 30 months, MVW would point to ‘you may speak to the Manager’ while Extra Care would still point to ‘replace’.
- Extra Care does offer ‘replacement’ cover for those products under those circumstances, therefore something additional to the published Minimum Voluntary Warranty.
We will see whether this matters at all, the company’s policy may not be the only interpretation of what the consumer guarantee offers. It may be an interesting test case for the merits of selling extended warranties, and JB Hi Fi’s interpretation of the consumer guarantee as presented in its Minimum Voluntary Warranty policy.
*This example is based on a real product found on JB Hi Fi’s website, where the length of manufacturer’s warranty and the cost of the extended warranty could be easily found. It is not necessary to name it.