Ask LH: What Happens To My Warranty When The Manufacturer Goes Bust?

Dear Lifehacker, I have a portable air-conditioning unit (yes, I know the power usage is an issue, but at the time it was needed for my heavily pregnant wife to be comfortable) which I purchased in February 2011. It has a two-year manufacturer's warranty and this weekend it failed under warranty. Unfortunately, the manufacturer (Hotpoint) went into administration in April last year. " I bought the unit from The Good Guys, and I'm thinking that under Australian consumer law the Good Guys will have to honour the warranty (replace, repair, refund). But is that actually the case? Can you shed any light? Thanks, Hot in Summer

Picture via Gumtree

Dear HIS,

As is often the case with warranty-related issues, there's no single clear-cut answer to this question that applies in all circumstances. But I'd suggest that your best recourse is to ignore the existence of the manufacturer warranty and concentrate on your basic consumer rights.

Regardless of whether there was a manufacturer's warranty in place or not, any goods you are sold come with what's called a consumer guarantee, which requires that they are of acceptable quality. There are no fixed rules specifying how long the consumer guarantee should last with any particular category of product, but it seems reasonable to assume that a portable air conditioner would function for more than a single year. As such, you could argue that this represents a major defect and ask for it to be replaced. The advantage of pursuing this line of argument is that the fact the original manufacturer is no longer operating is irrelevant.

Note that it's this consumer guarantee rather than the extended warranty which the retailer is obliged to honour. As the ACCC points out: "You have consumer guarantees regardless of any warranty provided by the supplier or manufacturer".

From this perspective, the existence of the manufacturer warranty is essentially irrelevant, regardless of the fact the company has since gone out of business. The upside of this (from your point of view) is that you're now more likely to get a replacement unit, rather than having to wait for a repair on your existing equipment.

Ultimately, you won't know until you ask. When you do, be aware of your rights but don't be overly pushy or assertive: storming into a store and demanding an instant replacement is unlikely to get you the result you want. But if the store argues that you need to take up the issue with the manufacturer, explain that this isn't the case and that retailers must resolve problems for goods they sell; they can't simply handball the issue to the equipment supplier. Good luck!

Cheers Lifehacker

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Comments

    Interesting. I've never really known what to say to stores when it comes to this and they argue the point. Now I've got some ammunition to fire back.

    Remember Apple got slapped on the wrist from the ACCC for this a few years back. Know your rights. - This is straight from the NSW Fair Trading website... "Whoever sold you the goods or services, or made the goods, must honour any warranty or promise they made and honour the consumer guarantees.

    This means you can insist a supplier meets a consumer guarantee, even if the goods are covered by a manufacturer’s warranty. The supplier cannot avoid dealing with the problem by telling you it is the manufacturer’s responsibility."

    http://www.fairtrading.nsw.gov.au/Consumers/Consumer_guarantees_warranties_and_refunds/Warranties.html

    I am not sure I'd buy an air-conditioner called "Hotpoint" in the first place. That is not the effect I want from an air-conditioner.

    Do the ACCC rules apply to used products, such as cars?

    A few years ago, my partner bought a used car which the dealer gave her a third party warranty on for free. When the air conditioning in the car broke a week or so later, we tried to get the third party warranty company to fix it. I won't bore you with details, but that was an awful experience (the wording in the warranty was interesting).

    In any case, would the consumer guarantee still have been in effect? Could we have ignored the third party warranty and demanded that the dealer fix the issue?

    Why are retailers allowed to say differently? Surely that's just as bad as not honouring warranties?

    Case in point, I was in Myer over the weekend and a senior staff member (well, someone who was consulted as a point of authority anyway) said that after 30 days they will not handle faulty products and customers will need to contact the manufacturer directly. Now I'm not exactly sure what product this was in relation to, but this was in the electrical section, which for most products I would expect a better than 30 day warranty on.

      This is actually illegal, and there are penalties in place for retailers who insist on this.

      Calmly telling them that their policy is illegal according to the trade practices act would probably get them to open up to your complaint, but if it doesn't then your next step is to contact the ACCC and lodge a formal complaint about them.
      Once you have done that the ACCC will handle contact with the company and normally resolve things pretty quickly.

        You are right. According to the new laws, the supplier must handle the claim for you.

    As a employee of an air conditioning company, purchasing a unit from a well known brand usually cancels out this risk. But please try your original installer as they may be able to fix it/installation issue. Could be short of gas. Otherwise please ask the place you purchased the unit from. They should be able to find out who can help you. They may have to cover it themselves. It has happened in the past.

      Portable air con, I'm guessing he's the original installer :P

    I'm in a similar situation. I purchased a treadmill from a company that manufactures the product, and it has now partially stopped working (incline doesnt work). I have been unable to contact them and the rumour is that they are/have closed down. What then?

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