While it is not always possible to resolve all issues with a customer, particularly one that is acting unreasonably, understanding your actual obligations under the Australian Consumer Law (ACL) and other consumer protection legislation, and taking prompt action to address the customer’s concerns and clearly communicate, can reduce the number of disputes.
Typically, claims by customers fall under three broad categories; claims under an express warranty, claims under the ACL, or claims under other consumer protection legislation such the statutory warranty for second-hand vehicles.
Claims under the ACL are most typically that goods (including motor vehicles) are either not of acceptable quality or fit for purpose, or that services are not provided with due care and skill. However, there are a range of other consumer guarantees that are applicable to both goods and services.
It is important for responding to such claims under the ACL to distinguish between a major failure and a minor failure.
For goods, a major failure is one where:
- the consumer would not have bought the goods if they were aware of the failure;
- the goods substantially differ from a description or demonstrator model;
- the goods are not fit for purpose and cannot be repaired in a reasonable time; or,
- the goods are unsafe.
If it is a major failure, then you must repair, replace or refund, and this is at the election of the consumer.
However, if it is not a major failure, it is a minor failure, in which case you must rectify the failure within a reasonable time, and the rectification (repair, replace or refund) is at your election. If rectification cannot be done or you refuse to do so, then the failure may become a major failure.
Understanding and communicating to customers the difference between a major failure and a minor failure, and how you can assist them with each, can avoid unreasonable demands from customers.
Members are encouraged to attend our comprehensive training on ACL, and otherwise contact the WR team for assistance on email@example.com, or on 8291 2000.