Michael Hill fined $ 169,000 after misleading his clients

Jewelery retailer Michael Hill was fined $ 169,000 following a Trade Commission investigation into his extended warranty product.

The Commerce Commission stated that consumers must be able to make an informed decision about whether or not to purchase an extended warranty.
Photo: 123RF

Between May 31st and May 30th, 2018, the company admitted 12 counts according to which its program of professional protection would not have been respected.

The company also admitted to accusing one of the consumers of misleading the consumer by adding the price of the extended warranty to the price of a bracelet, without the Whangarei couple having bought it in June. 2016.

The couple was then reimbursed for the cost of the plan after complaining to Michael Hill.

The documentation provided to clients did not include all that was needed on the front page, including: comparing the protections afforded automatically to consumers by the consumer safeguards act with the protections afforded by the plan, an adequate summary rights and remedies of the consumer under the law of the right of the consumer to cancel the plan.

Anna Rawlings, of the Trade Commission, said that consumers should be able to make an informed decision as to the desirability of buying an extended warranty.

"The law clearly defines the information that must be provided to consumers when selling an extended warranty," she said.

"This information helps consumers decide if a warranty extension gives them added value to the rights they already have under the Consumer Guarantee Act.

"They can then decide if it's worth the extra cost."

In sentencing in Wellington District Court, Barry J. stated that conduct was a significant set of breaches and not just a minor oversight.

He stated that the conduct "undermines the objectives of the Fair Trade Act, since consumers have no immediate perceptible comparison between their rights under the Consumer Guarantee Act and those covered by the law" . [plan].

"The financial damage suffered by the couple was caused by the confusion between the price of the guarantee and the price of the bracelet," he said.

"Consumers have been" induced "to pay the proceeds of the guarantee."