It’s amazing that CSPs with the turnover of TPG still produce seriously illegal advertising and contracts.
Following November’s outrageous website advertisement, TPG has been found with a clear breach of section 53(g) of the Trade Practices Act in its standard terms.
We were looking at TPG’s ‘Fair Go’ policy
We searched out TPG’s Fair Go policy for a post about its November / December website offers. But a couple of paras below in TPG’s T&Cs we found this howler:
Warranty
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.
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.
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.
Sorry, TPG, but this is seriously illegal
We’ll explain it slowly.
- If you’re selling mobile handsets to consumers, the Trade Practices Act says they come with an implied condition that they are of merchantable quality.
- It says that you cannot limit that implied condition in any way. If a contract term says otherwise, it is void.
- It says that if you tell customers untrue things about their legal rights, you breach the Act.
- And it says that a breach of that kind is a criminal offence.
Does that mean your handset is under warranty forever ?
No.
It just means that it has to last and perform as long as a handset of ‘merchantable quality’ would.
If I buy a $5,000 armchair, I don’t expect it to last a thousand years, but I certainly expect the frame to stand up to normal use for ten years, maybe twenty, maybe more.
If I buy a handset, I don’t expect it to fall to pieces in 13 months. Does merchantable quality imply five years, or three, or maybe two ? That’s what courts have to decide in the rare cases that go that far.
But what’s clear is that a trader must not tell people: ‘There’s a 12 month manufacturer’s warranty and after that you must pay for any repairs.’ That’s a serious offence.
Don’t take our word for it 
Here’s what Victoria’s Consumer Affairs watchdog has to say:
Can traders limit their liability ?
No. Although you can share the liability for a faulty item with the manufacture, it is ultimately your responsibility to resolve the complaint.
As a supplier, retailer or manufacturer you can’t limit your liability by excluding, modifying or restricting the rights and remedies available to customers under the law in any way, for goods that are normally purchased for personal or household use.
Significant penalties exist for anyone found guilty of making statements that are false or misleading to customers about their rights.
You’re not alone, TPG
In 2004, the ACCC released ‘Shopping online – rights and obligations when trading over the internet‘. It found that over half of the active sites had exclusion clauses, limitations of liability and disclaimers that were likely to contravene the Trade Practices Act, especially section 52 and section 53(g).
And CSP Central has already explained how poorly Dodo and Best Buy Australia understand this important area of CSP law.
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Correct me if I am wrong… but ELFs are bound to the manufacturer not the distributor.
In some cases the ELF is 14 days (minimum) and in others it is 30 to 45 days.
For instance, Nokia’s ELF period is 30 days. Sony Ericsson 30 (i think), and Motorola 15.
With the exception of Blue Ant (bluetooth accessories) which have a lifetime ELF period.
No, Adam. A manufacturer is welcome to have a specific ELF (but it is not mandatory) but neither the manufacturer nor the retailer can say, or imply, that it is instead of the non-excludable, non-limitable rights granted by the Trade Practices Act.
So, if TPG had said’ ‘The manufacturer offers an ELF of 14 days. There’s also a warranty of 1 year. But they are in addition to, and not instead of, your statutory warranty that the goods supplied to you will be of merchantable quality’ — no problem.
The problem with their terms is the statement that if the ELF doesn’t apply, and you’re gear is more than a year old, you have to pay for all repairs yourself (or claim them on insurance, if you have it.) That is simply not a true statement under Australian law, for the reasons stated in the article.
Also note that in Australia, a consumer is not required to deal with the manufacturer over rights that are ‘bound’ to the manufacturer. If I am sold a dud phone, I am entitled to take it back to the business that sold it to me, and say ‘Make it better.’
I perfectly understand that consumers are often asked to arrange to return to a distributor or repair centre, and I’m happy to do that myself if it seems like the fastest way to fix a problem. But we can’t be required to go behind the retailer to get a remedy.
As someone who works in a phone store if the phone is out of the 12 month warranty offered by the manufacturer and they wish to try to get a free repair/replacment then we tell them no (as for argument sake we belive “merchantable quality” is 12 months. And direct them to contact the ombudsman is this correct or if not how should we deal with this situation? most expensive phones e.g blackberrys, palms, imate etc have a 2-3 year warranty anyway and i would think that a customer who buys a cheap phone say on a $20 plan cant expect a replacment after 12 months. If you buy rubbish then thats what you get.