Commerce Commission Drives Legal Action Against Beaurepaires

The Commerce Commission has filed seven charges against Beau Ideal Limited, formerly trading as Beaurepaires, under the Fair Trading Act for allegedly selling non-compliant extended warranties without customers’ knowledge or consent.
 

Beaurepaires, now trading as Advantage Tyre Solutions, sold extended warranties called ‘Road Hazard Cover’ that provided tyre care and repairs for the first 12 months after the tyres were purchased.

Commerce Commission Fair Trading General Manager Vanessa Horne says the Commission is alleging that Beaurepaires did not provide the necessary information when selling the extended warranty to comply with the Fair Trading Act.

“This includes not providing a comparison of the protections offered under the extended warranty and consumers’ existing rights under the Consumer Guarantees Act, and consumers’ rights to cancel.”

“All businesses have a responsibility to be transparent about extended warranties and consumers’ existing rights so consumers can make an informed decision. Simply because a service is not labelled as an extended warranty, does not mean it cannot be captured by the Fair Trading Act.

“Retailers must provide information to consumers when selling an extended warranty that helps consumers to decide if an extended warranty offers them value over and above the rights they already have under the Consumer Guarantees Act, and whether it is worth the price,” Ms Horne says.

Ms Horne says the charges also relate to Beaurepaires allegedly adding ‘Road Hazard Cover’ to customers’ bills without any prior conversation and relying on customers to notice the charge and opt out if they did not want the product.

“Taking payment for services customers aren’t aware they’re buying or have not expressed interest in purchasing is unacceptable behaviour the Commission is concerned about,” Ms Horne says.

The maximum penalty for adding goods or services to an invoice without a customer’s knowledge or consent under the Fair Trading Act is $600,000 for each offence for a business, and $30,000 for selling extended warranties that do not comply with the disclosure requirements. As the case is before the courts the Commission will not be making further comments at this time.

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