Major failure
11 established claims - 22 refused by the grounding gate
Documented position5
What the body that runs or defines the thing says in its own documentation.
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 finding4
Something someone actually measured, with the method attached.
- The major failure occurred in a 2022 mystery shop of 80 Harvey Norman, JB Hi-Fi and The Good Guys stores.
- The major failure was that 71% of the stores in the 2022 mystery shop of 80 Harvey Norman, JB Hi-Fi and The Good Guys misrepresented consumer rights.
2 quotes from 1 source
Last year, we mystery-shopped 80 Harvey Norman, JB Hi-Fi and The Good Guys stores across the country. Our results revealed that seven in 10 (71%) of these stores misrepresented consumer rights, meaning the Australian Consumer Law (ACL) is still being ignored or misunderstood.
In 2022, we ran a mystery shop investigation
The major failure is that 18 of the 26 Harvey Norman stores that CHOICE called misrepresented consumer rights.
1 quote from 1 source
We called 26 Harvey Norman stores, 18 of which (69%) misrepresented our consumer rights.
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.
Practical effect1
What is observed to happen in practice, as distinct from what is documented.
The major failure alleged against JB Hi-Fi was that its extended warranties were of little or no value because customers already had the same rights for free under the Australian Consumer Law.
1 quote from 1 source
UPDATE 14 December, 2023: JB Hi-Fi is currently facing a class action alleging that its extended warranties were of little or no value because customers already had the same rights for free under the Australian Consumer Law.
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.
Refused22
Claims the research produced that the grounding gate would not accept, with its reason. They are here because a site that only shows what passed gives you no way to judge whether the gate does anything.
Show what was refused
Kmart states that a business may offer a repair or replacement rather than a refund for a major failure.
Refused: The Kmart quote says Kmart may offer repair or replacement instead of refund but does not tie this to a major failure, and the ACCC quote does not attribute that statement to Kmart.
Unsupported: for a major failure
What it rested on
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.
The ACCC's documented position on major failure is that a business must not deduct an amount from a refund to take into account the use a consumer has had of the product.
Refused: The quote states the no-deduction rule but does not link it to a 'major failure'.
Unsupported: on major failure
What it rested on
The business must not deduct an amount from a refund to take into account the use a consumer has had of the product.
Major failure: the ACCC states that when a product or service has a minor problem, the business must fix the problem or repair the product for free.
Refused: The quoted ACCC statement concerns a minor problem, not a major failure.
Unsupported: Major failure
What it rested on
When a product or service has a minor problem, the business must fix the problem or repair the product for free.
The business does not have to offer a replacement or refund for a minor problem, although it can choose to do this.
Major failure: the ACCC states that when a product or service has a minor problem, the business does not have to offer a replacement or refund.
Refused: The quotes address minor problems only and do not state anything about a major failure.
Unsupported: Major failure
What it rested on
When a product or service has a minor problem, the business must fix the problem or repair the product for free.
The business does not have to offer a replacement or refund for a minor problem, although it can choose to do this.
The Australian Consumer Law section 260(1)(a) makes a failure to comply with a guarantee applying to a supply of goods a major failure if the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure.
Refused: The quote contains only the clause text and does not state that it is ACL section 260(1)(a) or that it makes a failure a major failure.
Unsupported: Australian Consumer Law section 260(1)(a)
What it rested on
(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
The Australian Consumer Law section 260(1)(e) makes it a major failure where goods are not of acceptable quality because they are unsafe.
Refused: The quote gives the parenthetical text but does not identify the section number or classify it as a major failure.
Unsupported: section 260(1)(e) makes it a major failure
What it rested on
(e) the goods are not of acceptable quality because they are unsafe.
The Australian Consumer Law section 260(1)(c) makes it a major failure where goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and cannot, easily and within a reasonable time, be remedied to make them fit.
Refused: The quote states the clause wording but does not identify it as Australian Consumer Law section 260(1)(c) or state that it constitutes a major failure.
Unsupported: The Australian Consumer Law section 260(1)(c) makes it a major failure
What it rested on
(c) the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or
The Australian Consumer Law section 260(2) makes an accumulation of failures a major failure where the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of those failures taken as a whole.
Refused: The quoted paragraphs state the accumulation and reasonable-consumer conditions but do not mention section 260(2) or that they make a major failure.
Unsupported: section 260(2) makes an accumulation of failures a major failure
What it rested on
(a) the failure is one of 2 or more failures to comply with a guarantee referred to in section 259(1)(b) that apply to the supply; and
(b) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of those failures, taken as a whole.
A note to the Australian Consumer Law section 260(2) states that the multiple failures do not need to relate to the same guarantee.
Refused: The quote gives the note text but does not identify it as a note to section 260(2) of the Australian Consumer Law.
Unsupported: section 260(2)
What it rested on
Note: The multiple failures do not need to relate to the same guarantee.
The Australian Consumer Law section 268(1)(e) makes it a major failure for services where the supply of the services creates an unsafe situation.
Refused: The quote gives only the text of paragraph (e) and does not state the section number or that it constitutes a major failure.
Unsupported: section 268(1)(e) makes it a major failure
The Australian Consumer Law section 268(1)(a) makes it a major failure for services where the services would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure.
Refused: The quote provides only the quoted subparagraph text, not the section number or its legal characterization as a major failure.
Unsupported: section 268(1)(a) makes it a major failure
What it rested on
(a) the services would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
Australian Consumer Law section 259(3) provides that where the failure cannot be remedied or is a major failure, the consumer may reject the goods.
Refused: The cited quotes show the condition and a compensation remedy but do not state that the consumer may reject the goods.
Unsupported: may reject the goods
What it rested on
(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 for a major problem with a product the consumer is entitled to reject the product and choose a refund or replacement, or keep it and be compensated for any drop in value.
Refused: The quotes give the rejection/refund/replacement and compensation options but do not mention that they apply to a major problem or major failure.
Unsupported: for a major problem with a product
What it rested on
reject the product and choose a refund or replacement, or
keep it and the seller will compensate them for any drop in value.
Consumer Affairs Victoria states that for a minor problem with a product it is the store that chooses whether to provide a replacement, repair the product within a reasonable time, or give a refund.
Refused: The cited quote states the store chooses those remedies but does not specify that this applies to a minor problem.
Unsupported: for a minor problem with a product
What it rested on
The store chooses whether to: provide a replacement that is identical, or of similar value repair the product within a reasonable time, or give a refund.
Consumer Affairs Victoria states that a consumer who requested or agreed to a repair of a product with a major failure does not lose their right to a refund or replacement.
Refused: The quote states the consumer does not lose refund/replacement rights because the problem is still major, but it does not mention requesting or agreeing to a repair.
Unsupported: who requested or agreed to a repair of a product with a major failure
What it rested on
the consumer does not lose their right to a refund or replacement. The problem with the product is still ‘major’, so they may still reject and return the product at any time.
Consumer Affairs Victoria states that a consumer who requested or agreed to a repair of a product with a major failure may still reject and return the product at any time.
Refused: The quote does not mention a consumer requesting or agreeing to a repair; it only states the right to reject and return is not lost.
Unsupported: requested or agreed to a repair
What it rested on
the consumer does not lose their right to a refund or replacement. The problem with the product is still ‘major’, so they may still reject and return the product at any time.
Kmart states that in some instances Kmart may offer a repair or replacement rather than a refund for a major failure.
Refused: The quote states Kmart may offer repair or replacement rather than a refund but does not tie this to a major failure.
Unsupported: for a major failure
What it rested on
In some instances, Kmart may offer a repair or replacement, rather than a refund.
CHOICE reports that salespeople at Harvey Norman stores that CHOICE called told CHOICE's mystery shoppers the major failure.
Refused: Quotes say salespeople told CHOICE misleading things but do not mention mystery shoppers or a 'major failure.'
Unsupported: told CHOICE's mystery shoppers the major failure
What it rested on
We called 26 Harvey Norman stores, 18 of which (69%) misrepresented our consumer rights. Some salespeople told us misleading things including, “After the manufacturer’s warranty there’s nothing we can do, it’s out of our hands.”
The major failure is that after the manufacturer's warranty there is nothing the store can do because it is out of their hands.
Refused: The quote gives this as an example of misleading salesperson statements but does not characterize it as the major failure.
Unsupported: The major failure
What it rested on
We called 26 Harvey Norman stores, 18 of which (69%) misrepresented our consumer rights. Some salespeople told us misleading things including, “After the manufacturer’s warranty there’s nothing we can do, it’s out of our hands.”
The major failure was reported by CHOICE as being that in many of CHOICE's calls, CHOICE was told that a consumer's rights to a remedy after the warranty period ended were decided by the system at the store.
Refused: The quote states that in many calls CHOICE was told rights were decided by the system, but it does not say this was the major failure.
Unsupported: major failure
What it rested on
In many of our calls, we were told our rights to a remedy after the warranty period ended were decided by “the system” at the store.
CHOICE reported on 14 December 2023 that JB Hi-Fi was facing a class action alleging the major failure.
Refused: The quote says the class action alleges the extended warranties were of little or no value, not that it alleges a 'major failure.'
Unsupported: alleging the major failure
What it rested on
UPDATE 14 December, 2023: JB Hi-Fi is currently facing a class action alleging that its extended warranties were of little or no value because customers already had the same rights for free under the Australian Consumer Law.
The major failure is that CHOICE reports that 73 of the 80 salespeople CHOICE spoke to offered to sell CHOICE an extended warranty.
Refused: The quote supports the statistic but does not characterize it as a major failure.
Unsupported: The major failure is that
What it rested on
the conversation turned immediately to the benefits of an extended warranty. In fact, 73 of the 80 salespeople we spoke to offered to sell us one.