When we set out to add Customer Care to the judging criteria for our reviews in late 2019, we didn’t realise what a complicated issue it would be. This is an area readers have hounded us for advice on over the last few years, but it is also one of the hardest to assess as we do not get the chance to live with a van long term, nor do we buy the vans we review.
Therefore, our new Customer Care criteria focuses on the printed warranty and what services the seller or manufacturer offers to buyers after the purchase. For instance, do they have multiple agents nationally? Do they have dedicated warranty staff? What exclusions exist in their warranty? How does it compare to others?
BLA CZone’s Best Aussie Vans, the results of which you can find in Caravan World 594 and 595, became the testbed for this long-awaited new criterion. However, as part of the process of examining the warranty documents of entrants we found that things are not as clear as they should be. Looking more widely, we also discovered the issues seem to run across much of the industry. For this reason, we held over this feature so we could ensure a better understanding of the issue, and to not unfairly suggest it might apply only to the 2019 Best Aussie Van entrants. These vans were the cream of the crop in Australia in 2019, not to mention that their manufacturers were brave enough to put their product to such a public test, so we should be clear that this issue is Australia-wide.
As the leading caravan publication in Australia, we feel we have a responsibility to our industry and the public to drive improved standards of service delivery and client education.
AUSTRALIAN CONSUMER LAW
As we see it, part of the issue is that many warranty documents are out of kilter with or seem to ignore Australian Consumer Law, indicating a lack of knowledge from manufacturers about obligations to buyers.
Australian Consumer Law (ACL), administered by the Australian Competition and Consumer Commission (ACC), came into effect 10 years ago and is supported by relevant state legislation, so one would think there would be agreement across the industry on how it is interpreted. But it’s not that simple, and like all things legal, there are interpretations aplenty.
In countless hours of reading and talking with industry bodies, manufacturers and consumer advocates, the overriding thing that remains clear is that Australian Consumer Law trumps any written warranty. ACL says clearly that:
“Warranties are separate from your automatic consumer guarantees. The consumer guarantees, which apply regardless of any warranties suppliers sell or give to you, apply for a reasonable time depending on the nature of the goods or services.”
In other words, it doesn’t matter what the warranty says, if it’s in contravention of the ACL then the ACL applies.
According to ACL, “Your rights under the consumer guarantees do not have a specific expiry date and can apply even after any warranties you’ve got from a business have expired.”
As one of the manufacturers told us during the Best Aussie Vans event, he understood the guarantee period for a van would be at least five years, so he needed to be prepared for that.
ACL VS WARRANTY
Government legislation states that a “consumer guarantee” under ACL is an automatic legal right given to consumers buying a product in Australia. The product has to be safe, without fault and perform as expected. If not, the buyer is entitled to a remedy including repair, replacement or refund, depending on the severity of the fault.
A warranty is a voluntary promise or commitment by the seller to the customer, which becomes legally binding when the item is purchased. It operates in addition to the Consumer Guarantee but cannot limit or exclude the Consumer Guarantee.
Warranty documents must include the statement that, “Our goods come with guarantees that cannot be excluded under Australian Consumer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonable loss or damage. You are entitled to have the goods replaced or repaired if the goods fail to be of acceptable quality, and the failure does not amount to a major failure.”
We’ll come back to what constitutes a major failure soon, but importantly, we’ve found that a number of the warranty documents we reviewed didn’t include the required statement. That in itself is a breach of ACL.
Warranty and ACL do not apply if you misused the product in a way that caused the problem. You can’t demand a refund if you got what you asked for and changed your mind or were made aware of any faults before the sale. You may also be not covered for a problem where you asked for a service to be done in a certain way against the advice of the business or were unclear about what you wanted.
IS IT A MAJOR PROBLEM?
Your van has a major problem if there is an issue that would have stopped someone buying it if they had known, it’s unsafe, it’s substantially unfit for purpose and can’t easily be fixed within a reasonable time, or it doesn't do what you asked.
Under ACL, it is the consumer’s choice in the case of a major problem whether to accept a repair, replacement or refund. Statements like “we may in our absolute discretion deny the claim and have no responsibility under the warranty” would seem to be illegal.
Under ACL everything in the van is covered and it’s the responsibility of the seller, who is usually the dealer, to make good the problem. ACL clearly states that the seller must guarantee all items sold.
All of the warranty documents we have seen recently except one excluded items not manufactured by the caravan manufacturer, which is a major area of contention with ACL. For example, fridges and stoves were said to be covered under their manufacturer’s warranty. In some cases, even the gas installation or chassis were referred back to the relevant supplier.
Most manufacturers we contacted said they helped customers with warranty issues and that this method of referring customers to parts suppliers was the most practical and time-efficient method of rectifying problems. That might sound fair enough, but it is illegal.
We sought clarification from the ACC, who advised:
“Businesses cannot exclude, limit or modify a consumer’s rights under the ACL.
“Retailers cannot direct a consumer to a manufacturer of a product to seek a remedy. Both retailers and manufacturers are responsible for complying with the relevant consumer guarantees under the ACL, and consequently, to provide appropriate solutions for failures to comply with those consumer guarantees.
“Ultimately, the consumer should not be caught in the middle, being pushed back and forth between a retailer or manufacturer.
“Where a caravan dealer may install parts or appliances into caravans for consumers (such as air conditioners, ovens, microwaves etc.), the dealer is still required to comply with the ACL's consumer guarantees in providing this service to consumers. In particular, if a fault develops with an appliance due to how the caravan dealer installed it, or if the dealer installs a product that is inappropriate for use in a caravan, the dealer would be obliged to provide the consumer with an appropriate remedy under the ACL.”
The issues of the cost involved in returning the van for repair also proved to be contentious, and this issue more than any other highlighted the caravan industry's fears. We have no argument with the fact there are problems with some dealers and manufacturers, but it can be a two way street, and we highlight this as a reason many retailers are wary. As one manufacturer argued, some consumers can be utterly unreasonable in their interpretation of ACL.
“Do you expect me to pay the cost of returning a van to the factory or a service agent if the knob on the stereo falls off?” she asked.
It might seem like an extreme example, but I'm assured there are consumers with this sort of attitude. For retailers, the law can be a real time-wasting and costly exercise if consumers are unreasonable. The adage that the customer is always right is wrong. It’s understandable that business owners want to protect their company’s viability against vexatious claims.
It’s easy to see how problems arise. Say you drag your blacktop cruiser down Gibb River Rd at 100km/h over corrugations and washouts, then ring the caravan dealer from halfway down the track and complain the suspension has broken. Would you expect them to cough up for a tow into Kunnanurra? Some would.
That said, if you have a genuine issue where costs are involved in returning the van to the manufacturer or an agent, the law is clear: it’s the seller’s responsibility.
There could also be a case for compensation caused by a problem with the van. This is usually for financial costs, but it could include lost time.
As part of your warranty agreement, it’s likely you will be expected to carry out regular servicing of your van at a recognised service facility. It would be usual to have a three-month initial service, then every 12 months. You will need to keep receipts for proof. This seems reasonable, and we have heard of warranty claims being rejected if the correct procedures are not followed.
You are also responsible for advising of any warranty issues as soon as practical after they occur. You may be advised to cease using the van until issues are resolved, and you should follow this advice.
If things go wrong, then the best way to resolve it in the first instance is to approach the seller. According to the ACCC, “Consumers should try to resolve any warranty or consumer guarantee disputes with the business first. Most state and territory fair trading agencies also facilitate dispute resolution between consumers and traders.”
CARAVAN INDUSTRY ASSOCIATION OF AUSTRALIA
We approached the Caravan Industry Association of Australia (CIAA), an industry body representing over 3500 caravan and camping businesses including 70 manufacturers, for comment. They agreed that some documents “included terms which can only be interpreted as trying to exclude the ACL. Such terms will not be effective and could be tested by a Court. In some cases, it appears that the warranty intended to do the right thing but made some technical mistakes.”
And to be fair, they emphasised that there is a real difference between saying that the warranty will not apply in some circumstances and saying that a customer will not be entitled to a remedy. We agree. In no way do we believe any of the manufacturers whose caravans we’ve reviewed have deliberately tried to avoid their responsibilities. In fact, they all seem to go out of their way to remedy genuine concerns.
The CIAA has been in discussion with various stakeholders over the last few months about their member’s dealings with customers over warranty issues. We are assured they are planning an education programme amongst all RVMAP members for warranty document compliance. We would applaud this initiative, but at the same time, suggest it is well overdue.
Some readers might be thinking we have ignored the elephant in the room — that some retailers and manufacturers have avoided their obligations to the owners of faulty vans. This is a vexed issue with many sides and one we plan to tackle in coming months. In the meantime, we look forward to CIAA pushing for compliance with Consumer Law amongst its members, and a flow on across the entire industry.