A Project for Choice - ACL Product Life Guide

Ideas
1

Having has to return a few products in the past few years due to poor manufacturing quality, something that struck me is that one has to argue with the retailer/manufacturer that the defect was in fact as a result of poor quality and that it should be covered by the manufacturer warranty or under the ACL (for products outside the manufacturer warranty but should have lasted longer).

This gave me an idea…maybe Choice could produce a guideline to complement the ACL (and maybe used in conjunction with the ACL in the longer term).

This guideline would contain information on:

  • The expected life of a product (as expected by a consumer and designed life by manufacturer);

  • The period that one would expect a product to be fault free (expected by the consumer and manufacturer); and

  • The period of time that one would expect to be able to get spare parts for the product (expected by the consumer and manufacturer).

I think that Choice would be best placed to obtain such information and could collaborate with say a university to collect the data and report the findings.

This information would be invaluable to both the consumer and the manufacturer. The consumer would benefit as they would know roughly how long a product is expected to last and also if a claim under the ACL is likely to be successful based on their own product and circumstances. A manufacture will also be able to use the information to design products which meet the consumer expectations.

It would be great if main household appliance were initially captured with less common items captured later (when time or finances allow).

What would be interesting would be say example like a $1000+ refrigerator using made up numbers:

  1. Consumer thinks it should be fault free for at least 7 years and should last at least 12 years. Parts should be available for at least 12 years.

  2. Manufacture thinks it should be fault free for 2 years (their warranty period) and should last 8 years. Parts should be available for at least 7 years.

What the above would show the manufacturers is consumer believe that through normal use, a refrigerator should last far longer than they willing to stand behind their products. If a consumer has a refrigerator fault in say 5 years, there is an expectation that the refrigerator shouldn’t have such faults and maybe should be covered by the ACL.

As Choice currently has systems in place for the reliability survey, it wouldn’t be difficult to modify such surveys to capture such information.

Anyway food for thought.

12 Likes
2

Excellent suggestion! I would assign 2 likes if I could.

It seems the language in the ACL is as counter-productive as productive in the way it creates what can easily be a confrontational situation in the years beyond warranty. The loser is the customer who is without a functional product for an indeterminate period, and who may or may not be made whole, and who may or may not be on the higher ground. Forcing minimum warranties would likely be counter-productive as manufacturers would increase their prices accordingly, but having tables as you described, and that included product type MTBF (mean time between failure) and MTTF (mean time to failure) statistics should cut through a lot of it.

7 Likes
3

I like this idea @phb, I’ll be sure to table it with my colleagues and also investigate if it could have some bearing on some of our existing projects.

5 Likes
4

Didn’t have enough time ro fully finish my initial post. This is a brain dump of additional thoughts…

I am sure that Choice’s sister organisation in other countries would also find the information useful and it may he possible for Choice to be able to get a financial return on the data collected by sharing/selling to these sister organisations or even government agencies in other countries. There is also oportunity to collect their own data to see if there is any cultural differences between population sampled. One might find in some countries, some items are considered disposable (short life expectation) while in others are cherished (long life expectation).

The data would also plug directly into Choice’s reliability survey and could be used in its magazine, when discussing products and whether particular brands meets the consumer’s life/reliability expectations.

The data would also be useful for regulators, especially those relating to waste and recycing as they could use the information to plan for waste and/or decision making in relation to what products ahould be recycled (or made to allow easy recycling or plan for facilities to recycle such products). … for example, if a smart phone has a anticipated life of 2 years by the consumer, government can calculate how much waste is generated and instigate recycling/reuse program to deal with the waste. It also gives government and business an idea of the turnover of products (esp. white goods). It will also encourage businesses to compete on quality and price, and the consumer to be able to better budget for product replacement at end of life (helping reduce cost of living).

Some businesses may not be in favour, especially those who only cater for a particular price point and will compromise quality at the expense of longevity. What should happen is there will be pressure on these businesses/manufacturers to improve their quality to meet the consumer’s expectations. If they don’t, they will lose business through poor reputation.

It may also encourage manufacturers to make products which can be easily repaired, especially if the data shows consumers expect long fault free periods…faults woukd need to be fixed easily to keep costs down, particularly where the repair is under the ACL.

Also, it may drive better clarification on consumables associated with a product, which may have shorter lives, for example, L-ion batteries used in car where there is an expectation that the consumer pays for replacement after 4-5 years, whereby the same device has a life of say 10 years or 300 000km.

It may drive manufacturers to define what they consider normal use, e.g, washing machine used daily. If it is used hourly, then the life would be reduced.

8 Likes
5

I agree with Phil (@PhilT). Anything that will help the lowly consumer vis-à-vis the ACL is a boon.

The ACL is in my opinion a useful ‘talking point’, rather than a powerful tool for consumers. All it takes is an intransigent retailer or manufacturer and the consumer is at the wrong end of a power imbalance.

This would also dovetail in with ‘lemon laws’ if they ever eventuate, because it would give a clear indication of when something is faulty too often (statistically speaking).

7 Likes
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I agree this ought to be an ACA core business role.

The current ACL warranty requirement might then require some modification to allow for aging. Eg, supplier responsible for full replacement/repair for the initial XX% of lifetime, phasing out over time to ???.

5 Likes
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Good to see that latest reliability survey has been set up to capture some of this information. A good step in the right direction!

4 Likes
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Any update Brendan on whether others on Choice staff are like-minded? I’m another who think such an idea would be a game changer in so many ways. As @phb posted whilst I was typing this the latest reliability survey captures some of the information, but is this just a coincidence or a move towards a targeted goal?

6 Likes
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We’re pursuing a long-term goal of getting some more guidance under the law as to what is reasonable in terms of product life, and in the short term we’ve recently published some guides on how long your appliances will last (and you’ll see this more advice on this factor in our reviews too). Not to say that a dedicated product life guide in the one binding wouldn’t be a very useful tool!

Thanks for following up @obbigttam, I’m always passing on this feedback to my colleagues at CHOICE for further consideration and action.

6 Likes
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Well done Choice, just hope the ball keeps rolling…

4 Likes
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I know this thread is a bit old but I found a great way to support your expected life claims. (edited)

The ATO has a depreciation schedule and they have effective life values for a huge range of items. Though they are more focused on business items, there are lots of useful parallels for consumers.

The ATO page is https://www.ato.gov.au/law/view/document?docid=TXR/TR20203/NAT/ATO/00001

There is a nice searchable website here to: https://www.depreciationrates.net.au

Hope this helps!

4 Likes
12

It is interesting, but depreciation is more about change in worth/value of an item rather than its life. Ìf they were life expectations, businesses would be replacing all their fully depreciated equipment. This doesn’t happen.

While equipment have have a zero asset value, it is still valuable to a business to generate income/revenue. Businesses like consumers keep equipment until such time its ongoing maintenance costs exceed replacement coats, not when the equipment has a zero asset value.

What depreciation does potentially show is the minimum expected life, rather than the expected life of equipment.

2 Likes
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Good points.

Unfortunately without well defined expected life values the ACL is hard to use. My current dispute with Apple they have simply said that they don’t think the item is covered when I think it should (as would most people). But without any hard numbers they can get away with it and I will have to chase them with VCAT to get resolution.

They know that only a small percent will chase it that far, so it is better “business” to deny anything that isn’t obvious (i.e. refuse anything over 2 years).

2 Likes
14

For which items - examples do you think there are parallels?
It may be a very limited list. There are likely arguments the comparisons are not equal in some way. It is a broad generalisation and independent of brand/manufacturer.

Many items produced for the consumer market are not the same as those used in business and industry. Within consumer product ranges manufacturers may advise differences in intended use and offer different warranties. The ‘quality’ or ‘standard’ of competing products also varies across a market.

In practice only some items on the schedule may be useful and fully productive for the lifetimes listed in the ATO rulings. If an item fails to meet the lifetime in the depreciation schedule it can be scrapped or sold on. The loss (adjusted) is based on the depreciation unclaimed at that time and fully tax deductible. For business assets of lesser value, it is a relatively common event.

Note:
Government has made a habit of offering accelerated depreciation, which reflects how arbitrary some of the ATO rulings may be. The ATO rulings some argue are intended to be only a tax deduction restriction and control measure.

P.S.
I skipped the second link, as it appears to be a dubious web site with no providence, or identification.

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Choice has been compiling information on expected electrical appliance lived…

To assist consumers to determine what is reasonable and can be used to support consumer guarantees under the Australian Consumer Law.

2 Likes
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Last year we had an issue with an iPad about 18 months out of warranty. I spent time on the internet, established the expected average tablet life, correlated everything I could find about iPad life, cited Choice advice, and Apple ‘rose to the occasion’.

As you discovered it is up to each consumer to substantiate product life, but it can be done.

2 Likes
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Hi I think the second link is just a handy search based on the ATO info.

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Helpful

Thanks for that. I bought two HomePod (original) speaks and the first one died after 2 years and 2 months. Will a little arguing they covered it. The second original died 2 years and 9 months and I argued that this was not within the expected lifetime of the product. They considered it and then decided that it wasn’t covered. I said that is was not the expected quality of a high end speaker but they had made an internal decisions not cover it.

I will try then again and quote the choice article and say that VCAT was my next step.

Victorian Consumer affairs and choice help seems to be overloaded and not getting back to people much. I really don’t think it should be this hard. Most people won’t chase it and I am only doing it as I am annoyed how arbitrary Apple have been. Not fair on the average consumer.

Thanks

1 Like
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Prior to trying research all the evidence you can find for average and expected product life, and quote your sources. It requires rigorous work as if you are in front of a magistrate arguing a case, and the magistrate knows nothing excepting what you tell them.

3 Likes
20

Perhaps.
But without any identity ascribed to the site and a big bold ATO in the middle of the screen it says user beware. I’m not into looking beyond the address bar which lacks a ‘.gov.au’.

It may be innocent, it may be a SCAM or trap.
It may lead to an ATO search today, and who knows to morrow.

Thanks for your suggestion.
If all it does is lead to the existing ATO search function - which I am familiar with, it serves no new purpose.

Should the second link be deleted until it’s true identity can be proven as safe and reliable?