TPG still can’t get liability law right
Are some companies allergic to best practice legal compliance ? TPG has finally changed a seriously illegal misrepresentation about handset warranties in its Mobile Fair Go policy, after we highlighted the problem in December 2008 and again in May 2009.
That’s good, but not good enough. The really red hot misrepresentation has been removed from the document but it’s still likely to mislead consumers. It’s a good example of misleading by what you don’t say.
The two statements compared
Here’s the original misrepresentation:
21.3 If your mobile is no longer under warranty and you are not covered by insurance you will need to pay for the cost of the repairs.
That’s a ‘legal lie’. We’ve explained why, and so has ACCC.
Here’s the latest version of clause 21.3, together with the clauses that precede it.
21. Warranty
21.1 Early Life Failure (ELF)
The Elf warranty covers mobile phones in the first 14 days of use. If the mobile phone fails during this time, this warranty provides for a replacement mobile. Please check the warranty documentation that came with your mobile phone to see if it’s within the ELF period. If you are eligible to make a claim, please contact the place of purchase immediately.
21.2 Manufacturer’s warranty
The equipment we supply is covered under the Manufacturers warranty. Details of the warranty are included with your mobile phone. (Most mobile phones come with a 12 month warranty and a 6 month warranty for batteries.)
Please note warranties do not cover physical, liquid or sun damage or unlocking or programming. Additionally they do not cover loss or theft.
If your mobile phone is older than the ELF period, check the warranty documentation for information on the standard manufacturers warranty and for their recommended local service centres. Remember to take a copy of your Proof of Purchase to the service centre and remove your SIM card and /or accessories.
21.3 For information on your local service centres recommended by the mobile phone manufacturer, please see the documentation that came with your mobile phone, alternatively refer to your local directory for more information.
So TPG has replaced the legal lie with very different wording, that seems more reasonable. But let’s consider the overall effect of clause 21 as it now stands.
The new clause 21
The problem with clause 21 is that it reads as though it is an exhaustive statement of the customer’s warranty rights. It doesn’t say in black & white that the ELF warranty and the manufacturer’s warranty are the only warranty rights a customer has, but that’s the natural impression it conveys.
How many Mums, Dads and teenagers are going to read clause 21 and say to themselves, ‘Oh but I am also aware of my non-excludable consumer warranty rights pursuant to the Trade Practices Act, and I therefore note that my provider’s warranty clause can legally only enlarge those rights and cannot be taken to limit them’ ?
No, average folks are quite likely to take clause 21 as a full statement of their rights. And it isn’t.
The impression reinforced
Note the way that clause 21 is worded to disassociate TPG from the handsets it supplies.
The law says that a customer who gets a phone from TPG can require TPG to take it and repair / replace it if it turns out to be sub-standard. Sure, TPG might ask you to drop it in to a third party service centre, and you might be happy to do so.
But TPG can’t say or imply that ‘If your handset is sub-standard, it’s between you and the manufacturer.’ Yet that’s the clear implication of the new clause 21.3, especially when read together with clause 21.2.
ACCC is concerned about this kind of misrepresentation
TPG’s original clause 21.3 was a howler. The amended version is not as outrageous but it is still likely to mislead.
Less than a month ago, ACCC took action against electrical goods importer GAF for exactly this kind of thing. In that case, Chairman Graeme Samuel made ACCC’s attitude clear:
The ACCC was concerned that in purporting to describe consumers’ express warranty rights, GAF had produced a card which could potentially lead a consumer to erroneously believe they had no other rights – most importantly the statutory rights implied by the Act into consumer transactions.
Although suppliers of products can provide their own express warranties that enlarge a consumers’ warranty rights, they must not exclude or restrict consumers’ statutory rights, or mislead consumers about their statutory rights. If they do, they risk breaking the law and being exposed to a criminal action.
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