This may be considered under the ACL Service rights which are similar to the Goods rights
Services and the consumer rights that apply
When buying a service, a consumer has the right to expect the following things.
Due care and skill
Service providers must carry out all services using an acceptable level of care and skill. Their work must be at least as good as what a competent service provider with average skills and experience would provide. They must also take reasonable steps to avoid causing loss or damage when providing the service.
A consumer hires a plumber to fix a leak in the bathroom. The next day, the same leak returns.
The consumer can claim that the service wasn’t provided with due care and skill.
Fit for a particular purpose
Services provided, and any resulting products, must be fit for any stated purpose.
This guarantee applies when:
- a consumer tells a service provider they want to use their service for a particular purpose
- the consumer buys the service based on the advice of the business
- the service provider advertises that their service can be used for a particular purpose.
This guarantee doesn’t apply to professional services provided by a qualified architect or engineer.
A consumer hires a carpenter to build a unit that will fit their 50-inch television. The finished product is too small.
The consumer can claim that the service didn’t meet the purpose specified.
Provided within a reasonable time
Services must be supplied within a reasonable time, if there’s no agreed time frame.
What is ‘reasonable’ can depend on factors including:
- the nature of the services
- weather conditions
- availability of parts or materials.
A consumer hires a builder to repair an outdoor patio. The consumer and the builder don’t discuss the completion date. The builder starts the repairs but doesn’t return for a month.
The consumer can claim that the service hasn’t been supplied within a reasonable time.
However, if it was raining during that time, the delay might be reasonable.
Major problem with a service
What makes a problem major
A service has a major problem when it:
- creates an unsafe situation
- has either one serious problem or several smaller problems that would stop someone buying the service if they knew about them beforehand
- can’t be used for its normal purpose, or for a specific purpose that the consumer told the seller about, or doesn’t achieve a specific result that the consumer told the seller about, and can’t easily be fixed within a reasonable time.
When a service has a major problem, a consumer can choose to:
- cancel the contract and get a refund. This may not be a full refund, as the consumer needs to pay a reasonable amount for any work done so far and as expected, or
- keep the contract, but pay a lower price that takes the problem into account.
If the consumer has already paid upfront, they have the right to get some money back. How much money will depend on whether some or all of the services provided did not have problems, or whether they were provided at all.
Minor problem with a product or service
When a product or service has a minor problem, the business must fix the problem or repair the product for free.
The business does not have to offer a replacement or refund for a minor problem, although it can choose to do this.
When electronic products, like mobile phones, computers and music players, are repaired, consumers can lose their stored data.
Businesses may also use refurbished products or parts when repairing products.
Businesses have to warn consumers about both of these things by giving them a repair notice.
When the business can’t or won’t fix a minor problem
If the business can’t or won’t repair or fix the problem within a reasonable amount of time, or at all, a consumer is entitled to:
- get it done somewhere else, with the business paying the consumer back for the reasonable cost of the fix or repair
- get a refund or replacement instead
- keep the product or cancel the service contract, and be compensated for the drop in value caused by the problem.
What is a ’reasonable’ amount of time for a business to fix a problem will depend on the nature of the product or service. For example, it may take longer for a repairer to attend a house to fix an installed dishwasher than for a pair of pants to be repaired in-store.
When consumers have a right to compensation
Under consumer law, businesses must meet a set of basic rights known as consumer guarantees when they sell products or services.
If a product or service does not meet the consumer guarantees, the consumer has a right to a repair, replacement or refund.
If the problem causes the consumer to suffer other loss or damage, they also have a right to compensation in addition to getting a repair, replacement, or refund.
It is misleading and against the law for a business to say that it is not responsible for the foreseeable losses a consumer suffers from using the business’s product or service.
What is and isn’t covered
Loss or damage a business must pay for
Businesses must pay for loss or damage that is:
- caused by the failure to meet a consumer guarantee
- reasonably foreseeable.
Example of damage that a business must pay for
A consumer’s washing machine breaks down due to a manufacturing fault. Water leaks out of the machine and damages carpet in part of the house.
It is reasonably foreseeable that a leaking washing machine may damage flooring. Therefore, the business must pay to replace the damaged carpet.
Loss or damage a business doesn’t have to pay for
A business does not have to pay for damage or loss that:
- was not caused by its products or services
- relates to something independent of the business, after a product left its control.
Example of damage that a business wouldn’t have to pay for
A consumer’s new car has a fault that causes it to leak oil on her driveway. Her dog runs through the oil and into the house, dirtying the carpet.
Although the car dealer would have to pay for any cleaning needed to the driveway, it would not have to pay for carpet cleaning.
The actions of the dog were unrelated to the issue with the car and the car dealer could not have predicted a dog would run through the oil and into the house.
How much compensation must be paid
The compensation should cover the costs that the consumer faced because of the problem with the product or service. Most costs are financial, but there can be other costs, such as lost time or productivity.
Compensation should put the consumer back in the position they would have been in if the problem hadn’t happened.
Example showing factors in working out compensation to be paid
A consumer takes their curtains to a dry cleaner for cleaning. During cleaning, the curtains are badly damaged.
As well as a refund for the dry cleaning service, the consumer is entitled to compensation for the damage to their curtains.
As the curtains already had some wear and tear, it would be reasonable for the dry cleaner to pay part, but not all, of the cost of new curtains.
How compensation is claimed
To seek compensation, a consumer contacts the business, verbally or in writing, to explain the problem and ask for compensation.