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Apple misleading customers over faulty goods

The Commerce Commission has accused tech giant Apple of potentially misleading New Zealand customers who buy products that then go wrong.

The commission issued a warning to the US consumer electronics maker that it likely breached New Zealand's Fair Trading Act by telling customers their guarantees under the Consumer Guarantees Act (CGA) expired after two years. The commission is also concerned about Apple trying to wriggle out of replacing faulty non-Apple products bought in an Apple store, and saying replacement products were new when they were actually "remanufactured".

The eight-page warning letter, addressed to Apple Sales New Zealand care of law firm Simpson Grierson in Auckland, says the regulator investigated complaints from consumers about how Apple dealt with faulty products. As part of the investigation, it looked at information on Apple's website, sales and refund terms and conditions for online Apple Store purchases, and documents provided with replacement products.

Commissioner Anna Rawlings says Apple is likely to have misled consumers by telling them products are only covered by a guarantee under consumer law for two years, when in reality "the guarantees in the Consumer Guarantees Act do not expire after a legally prescribed period of time", but instead apply for a "reasonable period".

"What is reasonable depends on the nature of the goods, any statements made about the goods and how the consumer uses the goods."

Retailers must not point blank refuse to address consumer complaints and refer consumers exclusively to manufacturers for attention.

The commission also takes issue with Apple telling customers who bought non-Apple branded products from an Apple stor, that liability rests solely with the manufacturer and Apple has no responsibility for repairing or replacing faulty goods.

 "Apple is responsible, as a retailer, for compliance with the consumer guarantees applying to all products it sells, even if it is not the manufacturer," Rawlings says.

“It is natural that many retailers may wish to liaise with manufacturers to assess and remedy product defects but they must not point blank refuse to address consumer complaints and refer consumers exclusively to manufacturers for attention."

One customer complained to the Commerce Commission after three iPhone 6 Plus devices failed in different ways and they were told by an Apple representative that Apple had a policy of providing four replacements before considering an alternative remedy. Actually, the Consumer Guarantees Act contains no requirement on a set number of faults.

The commission also found Apple provided conflicting information about the availability of spare parts and repairs, and made misleading statements that replacement products were new "when they were in fact remanufactured products."

The commission said Apple had cooperated during the investigation. The warning letter was intended "to assist Apple in meeting its statutory obligations."

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