CRN's recent spate of articles looking at how things can go wrong when an IT reseller gets dumped with the warranty issues of an overseas manufacturer has opened up a can of worms.
Although the Australian Competition and Consumer Commission (ACCC) has recently announced its decision to review warranties and refunds - to guide consumers and business - resellers have told CRN, it's not enough.
Nikol Su, owner of EYO Technologies believes there are two areas the ACCC needs to pay more attention to when it comes to future policies making and interpreting the Trade Practices Act (TPA).
According to Su, the governing body needs to; distinguish further the responsibilities for warranty obligation between the retailers and the manufacturers; and offer clearer explanations about the Trade Act.
"Based on the publications that ACCC provides regarding warranty claims, it is in my view that most of them are there to protect the consumers," said Su.
"There is perhaps very little to address the responsibilities of the warranty obligation in practice for the manufacturers.
"There is also very little or none in relation to the retailers' rights."
Su said it was important for the ACCC to lay out more examples in layman's terms in its publications.
"Due to the popularisation of the Internet, there are more and more consumers reading through the ACCC publications nowadays," he said.
"The publications usually cause more confusion than anything else.
"There are all sorts of wrong 'legal advice' provided by the fellow consumers on the Net, which leads to a lot of consumers quoting the statutory warranty rights incorrectly."
He said this coupled with manufacturer voluntary warrant conditions, caused confusion for customers and unnecessary friction between them and retailers.
A CRN reader - who wished to remain anonymous and qualified by CRN - said, statutory rights take precedence over voluntary warranty and cannot be waived.
"A purchaser has the right to return a product that doesn't meet the statutory requirements to the place of purchase be it a retailer, importer or distributor," he said.
Frank Clay, manager at Tacitco Solutions, told CRN, one of the problems for the IT industry was the grey area of problems that aren't warranty, such as; setup conflicts; virus; spyware; or user error.
"These days the name brand manufacturer is often the best for the telephone support/warranty rather than the retail store that sold the product," he said.
"So I don't have too much problem with the end user being directed to HP or IBM.
"However the retailer needs to point out that this is done in the client's best interest otherwise it looks like they aren't interested.
"I have had good experiences with many name brand manufacturers shipping me parts to install after we have identified the faulty item. "
Clay said with IT products - it is not just having a warranty and getting the replacement it is the timeliness and respect for your data and use of the equipment that matters.
Peter Agamalis, senior channel manager at Impact Systems, said a vendor's local channel partner was unable to continue business, then it should be up to the manufacturer to step up to the plate and apply the necessary course of action .
"From what I can tell, most [resellers] these days take pride in their capacity to service and support their customers on a manageable level," he said.
"It would certainly be ideal if the ACCC were to deploy an element of increased protection for the channel.
"General common business sense should prevail regardless if it's in favour of the reseller or consumer."
Agamalis said it's really up to the reseller to protect themselves and they need to perform their own due diligence to ensure their vendors are properly backed and the business can support and sustain the opportunities they engage in.
"I hear that a lot of resellers tend to take comfort with branded product of late however this is not always the case," he said.
"On the contrary the uptake of white box product has been on the increase from what we are presently experiencing.
"At the end of the day I suppose it boils down to what their supplier are able to offer that they can extend onto their customers."
Nick Verykios, marketing director at Distribution Central, said what the government bodies are doing and how they conduct themselves in response to these concerns is not enough.
"But that can't stop us as a channel in being equally responsible for our customer's outcomes and to produce a solution that works," he said.
"It would be remiss of us to think that standard and legally obliging manufacturers warranties are enough to provide a responsible solution and mitigate risk and provide business continuity for our ultimate users of this type of technology."
Verykios said the end game is a risk reduction on the use of these technology assets and therefore a responsible deployment.
"To expect anything else is theoretical militancy and best left to those who love a good fight," he said.
"We, together with our resellers, have to get on with it and do what's necessary to ensure our customers outcomes are what they expect."
Peter Kell, deputy chair at the ACCC, said, it provides advice to both businesses and consumers about statutory warranty rights.
"Every product sold in Australia comes with certain automatic protections that retailers are bound by," he said.
"These statutory rights under the Trade Practices Act are designed to protect members of the public from products that fail to live up to reasonable expectations and are a vital part of retail market regulation.
"In general, goods must be of a merchantable quality, fit for the purpose for which they are sold and any services must be carried out with due care and skill."
Kell said for example, if a scuba diving watch fails when under water, clearly it's not fit for its advertised purpose.
"Manufacturer voluntary warranties or extended warranties may of course also be provided or offered to consumers, but it is important to understand that these are in addition to statutory warranty and refund rights - statutory rights cannot be overruled by a manufacturer's warranty," he said.
"If a customer is legally entitled to a refund because their rights have been breached (e.g. because the product is defective) the retailer/seller is responsible for that refund or repair.
"Retailers are not always able to repair the goods they sell, but they do have an obligation to assist their customers who come forward with reasonable claims.
"Retailers cannot avoid their obligations by telling customers to deal directly with the manufacturer, but they can send goods to the manufacturer on behalf of the customer for assessment or repair."
The law also protects sellers/retailers who in turn may have a legitimate claim against a supplier or manufacturer.
"Section 74H of the Trade Practices Act gives the retailer of defective goods to a consumer a right of indemnity against the manufacturer," said Kell.
"So the law also protects retailers and wholesalers by putting the responsibility for manufacturing or design faults onto manufacturers, or importers and owners of brand names who are not the original manufacturer.
"If a refund has been given on goods that have a design or manufacturing fault (for example, a hammer drill fails the first time you use it), the retailer can make a claim against the manufacturer or importer."
According to the ACCC manufacturers cannot impose misleading conditions on supply terms-for example, attempting to limit warranty claims to the terms of their own voluntary warranties may breach the Act.
"Some manufacturers might state that retailers must return goods in the original packaging and cover the cost of freight," said Kell.
"These kinds of conditions cannot be imposed if the goods are returned due to a breach of a statutory condition or warranty.
"These rights are also separate from any guarantee that the manufacturer or seller may offer.
It's worth noting that in dealing with consumers there is some discretion in taking back goods that are not faulty or unsuitable for their purpose."
He said different retailers have different policies in relation to taking back goods and many opt to display their returns policy on a sign at the counter.
"Doing so can be a good way to avoid confusion with customers, but remember that any such promises made must be honoured (such as agreeing to take back goods still in original packaging) and must not conflict with the customer's statutory rights as outlined in the law," said Kell.
"For example, 'no refunds signs' are illegal."
The Minister for Competition Policy and Consumer Affairs, the Hon Chris Bowen MP, has recently announced a review of the warranty and refund provisions of the Trade Practices Act.
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