Ask LH: Who Handles The Warranty If A Company Goes Out Of Business?

Ask LH: Who Handles The Warranty If A Company Goes Out Of Business?

Hi Lifehacker, If you purchase a product from a manufacturer who no longer is in business and another company has taken over that product who is responsible for the warranty? Thanks, Warranty Worries

Faulty product picture from Shutterstock

Dear WW,

It’s hard to give a precise answer as the outcome can vary depending on a range of factors. Generally speaking, if the product was still in warranty when the new company took over, it should be willing to meet the original terms.

For physical goods, your first port of call should be the retailer that sold you the product. Any business that sells goods or services in Australia must comply with consumer guarantees, which means they are fit for a specified purpose, match their description and aren’t faulty.

As the ACCC explains in its Warranties & Refunds guide:

Each sale is a contract between the seller and the consumer. So if the seller breaches the contract by providing goods that do not meet a statutory warranty or condition, it is their responsibility to provide a remedy. If a seller has to return goods to a manufacturer for assessment or repair, the seller should arrange delivery.

In other words, it is the seller’s responsibility to chase up the new company, not yours. While they sometimes beg to differ, retailers are not supposed to palm the customer off to the manufacturer. In the event that the manufacturer no longer exists, you should still be entitled to a monetary refund.

Online purchases can be a bit trickier; particularly if the seller and manufacturer are both based overseas. Consumer law states that any goods and services bought online must meet the same statutory conditions and warranties as for other kinds of sales — but getting everyone to play by the rules is easier said than done.

Receiving a favourable outcome in a warranty dispute can be exceedingly difficult when dealing with a foreign seller. This is one of the reasons why it sometimes pays to buy locally even if it means spending a bit more.

The ACCC has plenty of in-depth information about consumer rights on its website. If you hit a brick wall, your best bet is to contact the consumer affairs department for your state. Good luck!

Cheers Lifehacker

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  • Action steps for this one are the same as normal…
    1 – Take it back to seller
    2 – If they fail to remedy – complaint to Fair Trading in your state
    3 – If they are unable to resolve then it’s off to the consumer tribunal in your state

    There are other options in there such as speaking to lawyers and the like but commonly this is the path of least resistance to a resolution. If each step is followed properly and Fair Trading confirm they agree with you but are unable to take it further – you usually have enough ammunition to claim it successfully in the tribunal. At the tribunal you can also claim for more than just the refund. You can claim for the cost to actually chase the company for your repair/refund which can make it worth your while.

    • 0. Watch The Checkout. All of it, if you can (earlier seasons are on Youtube last I checked, current season is on iView). It’s entertaining and informative; The Chaser have finally found their niche.

      For telecommunications services, I’ve found that even mentioning the Telecommunications Industry Ombudsman has a soothing effect on the average ISP or telco. (But wait until they actually start being unreasonable.)

      • …The Chaser have finally found their niche…
        My thoughts exactly, its entertaining and informative.
        Since watching all my major purchases go on credit/debit card so that I will always have a proof of purchase even if I loose the sales receipt from the retailer. I have taken advantage of the ACL that a credit card statement is a proof of purchase.

  • is an interesting example. closing up as they run out of money, sold their products online direct and are an Australian company. What happens here.

  • When Philips pulled out of the Australian TV market a couple of years back (Just up and left), it left many customers confused about the warranty. We had faulty TV’s sitting in our workshop for months with no idea what to do with them. Philips had no involvement in it. The ACCC amped up it’s consumer law at this point to make it clear that it was the retailers responsibility.

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