CAMPING - BUYING ADVICE
In September, 2022 the Australian Competition and Consumer Commission (ACCC) issued a report on the conduct of some suppliers and manufacturers in the new caravan retailing market.
The report provides guidance to ensure businesses in this market comply with the Australian Consumer Law and the following text is the report’s executive summary.
Caravans are among the most expensive goods consumers can buy. When things go wrong the consumer harm can be high. For this reason, consumers need to have confidence that they will be able to obtain remedies if their caravans do not meet one or more of the statutory consumer guarantees.
The ACCC is concerned with the rising number of complaints we have received about caravans over the past five years. In November 2021 we published consumer and supplier surveys to better understand the issues affecting the new caravan retailing market. We have also spoken directly with suppliers and received feedback through industry forums. This extensive engagement with consumers and suppliers has informed the findings in this report.
Dealing with delays in the supply and repair of caravans
A common theme consumers reported was delays in the delivery of their new caravan, or for parts to fix failures with their existing caravan. The ACCC recognises that COVID-19 supply chain disruptions and recent increased demand mean delays are going to be more prevalent in the caravan industry, at least in the medium term. To avoid misleading consumers, suppliers should:
be upfront at the point of sale about the timeframe for delivery and any potential for that timeframe to change; promptly inform their customers following receipt of any information about changes to that timeframe and ensure that these explanations are accurate.
Suppliers must accurately advertise and describe their caravans and any associated warranties.
The ACCC is concerned that many consumers alleged suppliers had made misrepresentations to them about their new caravans and their consumer guarantee rights. It is a breach of the ACL for a business to make statements to their customers that are incorrect or likely to create a false impression.
The most commonly alleged misrepresentation was about manufacturers’ warranties (and their interaction with consumer guarantees). Consumers also reported misrepresentations about, among other things: the caravan’s performance capabilities, tow-weight and availability of repairs.
The consumer guarantee provisions in the ACL operate regardless of any right under a warranty provided by a manufacturer or supplier and any such warranty does not affect the rights of a consumer under the ACL.
The ACCC is concerned about reports that many suppliers are denying consumers their statutory rights because the warranty has expired. Suppliers must not suggest to consumers that their consumer guarantees are limited to any warranty period or by any warranty terms and conditions. Such statements are likely to breach the ACL.
New caravan retailing
Consumer reports indicate consumer guarantee failures are widespread. A large proportion of consumer respondents to our survey (80 percent) reported they had experienced failures with their new caravans.
If a business sells a consumer a caravan that fails to meet one or more of the consumer guarantees, the consumer is entitled to a remedy. Unfortunately, many consumers reported they were unable to obtain remedies, or the remedies did not fully address the failures.
Many suppliers, manufacturers and consumers reported that they were unclear as to when a failure is minor or major. This distinction determines the remedy a consumer is entitled to under the ACL, be it repair, replacement or refund for their caravan.
When considering what remedy is appropriate, suppliers should base their view on a thorough assessment of the caravan and any failures. Caravan manufacturers must reimburse suppliers for the cost of providing remedies to consumers.
Another significant issue we have identified is the difficulty some suppliers report they are having in obtaining reimbursement from manufacturers for the costs of providing consumers with remedies. This includes the manufacturer: referring a supplier to a component manufacturer; providing reimbursement only for parts and not labour and, in some instances, refusing reimbursement outright.
We are concerned that the conduct of some manufacturers may make suppliers more reluctant to provide consumers with remedies, even though this is a supplier’s legal obligation under the ACL, regardless of whether the manufacturer indemnifies them.
Law reform required to strengthen the ACL, improve access to remedies and address concerning conduct
The ACCC considers the ACL requires strengthening, to address concerning conduct we have identified in new caravan retailing. Currently, the failure to provide a consumer with a remedy is not a civil penalty provision and the same applies to a manufacturer’s obligation to provide an indemnity to a supplier.
The Treasury is consulting on options aimed at improving the effectiveness of the consumer guarantee and supplier indemnification provisions under the ACL3. The ACCC strongly advocates for the introduction of prohibitions, supported by penalties and other enforcement mechanisms, against: suppliers not providing remedies for consumer guarantee failures; manufacturers not indemnifying suppliers and manufacturers retaliating against suppliers who request indemnification.
We consider that these reforms will assist in addressing the issues we have identified in this market, as well as similar issues that occur in other markets for consumer goods and services.
The ACCC will continue to closely assess complaints about new caravan retailing and take enforcement action where appropriate. We will be particularly focused on the types of conduct identified in this report. This includes instances where we consider: suppliers have misled consumers about their consumer guarantee rights and manufacturers have misled suppliers about their right to indemnity.