PB Technologies has been fined $77,000 in the Auckland District Court after pleading guilty to 14 charges of selling non-compliant extended warranties.
In sentencing, Judge Thomas said he agreed with regulator the Commerce Commission that a deterrent response was required.
“There is a significant public interest in ensuring that warranties and policies of that nature, renowned for their exclusions and limitations, are fairly provided or that disclosure relating to those is fairly provided to customers so that they can make an informed decision in investing a significant sum of money in that product,” he said.
Between 11 May and 30 November 2017, PB Tech sold over 4000 of its PB Care extended warranties without giving consumers information to enable them an informed choice about the warranties.
PB Tech also sold AppleCare warranties for Apple products without giving consumers a copy of the extended warranty agreement at the time of sale or informing them of their cancellation rights.
Commissioner Anna Rawlings said the law clearly sets out the information that businesses must give to their customers when selling extended warranties.
Under the Fair Trading Act, consumers should have received information including: a summary of consumers’ rights and remedies under the Consumer Guarantees Act and a summarised comparison of consumers’ rights and remedies and those provided by the extended warranty.
Furthermore, this also includes written and verbal information about the right to cancel the extended warranty and obtain a refund if customers changed their minds within five working days, alongside a written copy of the extended warranty at the time of purchase.
PB Tech failed to comply with these legal requirements.
"All retailers selling extended warranties should take appropriate steps to make sure that their documentation is compliant and that their sales staff know what they need to do to comply with the law in store,” Rawlings said.
PB Care warranties were sold for between 10-15 per cent of the value of the good, depending on the length of the warranty.
AppleCare warranty prices also varied depending on the product. For example a two-year warranty for a $460 Apple iPad was $129.56.