Vodafone Hutichson Fixes Faulty Handset Policy

Vodafone Hutchison has extended its early failure replacement policy from 14 days to 28 days

The Australian Competition and Consumer Commission (ACCC) has accepted undertakings from Vodafone Hutchison Australia as a result of an investigation into alleged misrepresentations about consumers’ rights with regard to faulty mobile phones.

The ACCC was concerned that from 1 May 2008 to 8 June 2009 (prior to Hutchison 3G Australia’s merger with Vodafone Australia to become VHA) Hutchison implemented a handset direction which involved staff making representations to its customers that the only remedy available to them for a faulty mobile phone was a repair.

Generally the only time a customer was able to obtain a replacement mobile phone was during the ‘early life failure’ period, which was normally 14 days after purchase.
VHA has since acknowledged that in making these kinds of representations it was likely to have breached the Trade Practices Act 1974.

“Hutchison created an untenable situation where consumers with 15 day old faulty mobile phones were told they were only entitled to a repair,” ACCC chairman Graeme Samuel said. “Suppliers of goods and services need to realise the Trade Practices Act implies certain statutory rights into consumer contracts.  Mobile phone retailers need to know that often consumers’ statutory rights will extend beyond the manufacturers’ warranties.”

To address the ACCC’s concerns, VHA has undertaken for a period of three years to:

• extend the ‘early life failure’ period during which replacement mobile phones are provided to consumers for faulty mobile phones manufactured by Nokia, Apple, INQ and Research in Motion (Blackberry) from 14 days to 28 days after purchase

• provide all customers who acquired a mobile phone (except for mobile phones manufactured by Apple) in conjunction with a service contract on or after 1 December 2009 an express repair warranty for the entire length of the customers’ service contract.  That means a customer on a 24 month service contract will receive free unlimited repairs if their handset is faulty for the entire two year period

• provide all active pre-paid customers who acquired their handset on or after 1 January 2010 an express repair warranty for 24 months

• provide all active pre-paid customers who purchased their mobile phone prior to 31 December 2009 an express repair warranty for a period of 12 months from date of purchase

• take all reasonable steps to provide a loan phone to customers while their faulty phones are being repaired, and

• take all reasonable steps to ensure repairs are completed in a timely manner.

Common complaints received by the ACCC include:

• consumers face long repair times, sometimes with no loan phone being provided
  consumers experience repeated faults with their mobile phones but each time are told they are only entitled to a repair rather than a replacement, and

• consumers being told that after the initial 12 month period in which the manufacturer’s express warranty applies, no remedy is available; this is despite the consumer being locked into a 24 month service contract.

“At minimum, they need to ensure consumers have access to a reasonable remedy for the entire period of their service contract. It is simply not good enough that a customer is tied into a service contact for two years when the retailer is only promising to fix a faulty mobile phone for the first 12 months,” Samuel said.