Tyre retailer faces charges
A tyre company is facing seven charges under the Fair Trading Act for allegedly selling non-compliant extended warranties without customers’ knowledge or consent.
The charges have been filed against Beau Ideal Limited, formerly trading as Beaurepaires, by the Commerce Commission after an investigation.
The watchdog says Beaurepaires, now trading as Advantage Tyre Solutions, sold extended warranties called “road hazard cover” that provided tyre care and repairs for 12 months after the items were purchased.
Vanessa Horne, the commission’s fair trading general manager, says it is alleging Beaurepaires did not provide the necessary information when selling the extended warranty to comply with the Fair Trading Act.
“This includes not providing a comparison of the protections offered under the extended warranty and consumers’ existing rights under the Consumer Guarantees Act, and consumers’ rights to cancel,” she explains.
“All businesses have a responsibility to be transparent about extended warranties and consumers’ existing rights so consumers can make an informed decision.
“Simply because a service is not labelled as an extended warranty, does not mean it cannot be captured by the Fair Trading Act.”
Horne adds retailers must provide information to consumers when selling an extended warranty to help them decide if an extended warranty offers them value over and above the rights they have under the Consumer Guarantees Act.
The charges also relate to Beaurepaires allegedly adding “road hazard cover” to customers’ bills without any prior conversation and relying on consumers noticing the charge and opting out if they did not want the product.
“Taking payment for services customers aren’t aware they’re buying or have not expressed interest in purchasing is unacceptable behaviour the commission is concerned about,” says Horne.
The maximum penalty for adding goods or services to an invoice without a customer’s knowledge or consent under the Fair Trading Act is $600,000 for each offence for a business, and $30,000 for selling extended warranties that do not comply with the disclosure requirements.
