What counts as a major failure?
7 quoted answers, each with its source
The short answer
Products and services bought before 1 January 2011 are not covered by the current Australian Consumer Law. Under that law, a major problem is one where a reasonable consumer would not have bought the product if they had known of the problem beforehand. For a major failure, the ACCC states that the business must give the consumer the choice of remedy, and Australian Consumer Law section 259(3) allows the consumer to recover compensation for any reduction in the goods' value below the price paid. In practice, this is not always honoured: in 2022, 71% of 80 Harvey Norman, JB Hi-Fi and The Good Guys stores misrepresented consumer rights, and 18 of 26 Harvey Norman stores CHOICE called did so, most commonly by saying free remedies after the warranty period were slim or nonexistent; a 2023 class action also alleged JB Hi-Fi extended warranties were of little or no value because customers already had the same rights for free under the Australian Consumer Law.
Every part of this comes from the quotes below. How we write these.
What the rules actually say5
Quoted straight from the ACCC, the Australian Consumer Law or a state consumer regulator.
The ACCC states that when a business sells a product…
- with a major problem, the business must give the consumer the choice of a remedy.
- that later develops a major problem, the business must give the consumer the choice of a remedy.
1 quote from 1 source
When a business sells a product with a major problem, or a product that later develops a major problem, it must give the consumer the choice of a:
- Repair, replace, refund, cancel | ACCC accc.gov.au
Australian Consumer Law section 259(3) provides that where the failure cannot be remedied or is a major failure, the consumer may recover compensation for any reduction in the value of the goods below the price paid.
2 quotes from 1 source
(3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:
(b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.
Consumer Affairs Victoria states that a problem is major when a reasonable consumer would not have bought the product if they had known the problem beforehand.
1 quote from 1 source
A problem is considered to be major when a reasonable consumer would not have bought the product if they had known the problem beforehand
- Faulty product - Consumer Affairs Victoria consumer.vic.gov.au
Products and services bought before 1 January 2011 are not covered by the current Australian Consumer Law.
1 quote from 1 source
Products and services bought before 1 January 2011 aren't covered by the current Australian Consumer Law. They may be covered by older laws.
- Consumer rights and guarantees | ACCC accc.gov.au
Measured finding1
Something someone actually measured, with the method attached.
In CHOICE's mystery shop, the most common way consumer rights were misrepresented was staff stating or implying that the chances of receiving a free remedy after the warranty period were very slim or nonexistent.
1 quote from 1 source
The most common way consumer rights were misrepresented was staff stating or implying that the chances of receiving a free remedy after the warranty period were very slim or nonexistent.
Disputed between sources1
Sources that do not agree, presented without picking a winner.
The ACCC states that a business must give the consumer the choice of remedy for a major failure.
2 quotes from 2 sources
When a business sells a product with a major problem, or a product that later develops a major problem, it must give the consumer the choice of a:
In some instances, Kmart may offer a repair or replacement, rather than a refund.