The common car product you might get a refund for

Australians are demanding better from the products sold with used cars and winning.

Sarah from Melbourne’s south east thought she had to buy an extended warranty in order to get a loan. Consumer Action wrote to the warranty company requesting a refund for Sarah claiming, among other things, that the sales practice was unfair and that the warranty was of little or no value to her. The warranty provider did not admit liability, but agreed to refund the cost of over $2,000.

Consumer Action is warning Australians about the practice of salespeople making you feel you’re required to buy an extra product or service when you are not. Over many years the Centre has heard stories of countless Australians who felt pressured to buy unnecessary extras across a range of products and services, but is concerned in particular about car sales and finance.

“I’m ecstatic to have received a refund. I just don’t think the terms of the extended warranty were fair and I’m so happy Consumer Action helped me get a refund.”

Many Australians have been caught out by these practices according to David Leermakers, Senior Policy Officer at Consumer Action.

“We often hear people say that they felt silly for letting themselves be talked into a purchase they don’t want or don’t understand, but if this has happened to you, you need to know that you are not the only one. These sales techniques are nothing new. They’ve been developed over centuries to subtly pressure people into feeling they have no opportunity to say no”, says Leermakers.

Even when extended warranties for second hand cars have been sold without overt pressure, the Centre has major concerns about the value of the products and the ways they are marketed. As a result the Centre has asked the Australian Securities and Investment Commission (ASIC) to consider whether statements made by National Warranty Company (NWC), Australian Warranty Network (AWN) and Integrity Extended Warranties (Integrity) are misleading or deceptive.

According to Leermakers “these warranties might appeal to our desire for peace of mind, but can end up delivering very little.”

Consumer Action Law Centre has released a self-help kit to help Australians seek their own refund if they’re unhappy with the warranty they were sold with their second hand car or the way it was sold to them. The self-help kit is available here.


Editors notes:

Consumer Action has released the ‘Donating Your Money To a Warranty Company’ report which details a range of issues with these products. Read the full report here.

This client did not wish to be identified (and is not available for interview) but David Leermakers (Senior Policy Officer) is available for comment.

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