DEALER BULLETIN: NWC UNDERTAKING TO ACCC

28 September 2017

TO: ALL AADA MEMBERS

SUBJECT: NWC Undertaking to ACCC

The ACCC announced today that the National Warranty Company (NWC) has agreed to make changes to its ‘Extension to Manufacturer’s Warranty’ product after the consumer watchdog expressed concerns that the products, which are sold nationally through dealers for new and used vehicles, were potentially misleading consumers about the benefits, and need for, purchasing an extended warranty.

The ACCC is particularly concerned that:

  • “the product name, ‘Extension to Manufacturer’s Warranty’, had the potential to mislead consumers into thinking they received cover on the same terms as the vehicle manufacturer’s warranty, when it was a generic product that contained a number of exclusions and financial limitations not normally found in a manufacturer’s warranty”
  • “certain statements contained in the product terms represented that the warranty benefits were in addition to the statutory protections under the Australian Consumer Law (ACL), when there was clear overlap with the consumer guarantee provisions.”

To address these concerns, NWC has agreed to:

  • change the name of the product to ‘Optimum Warranty’
  • make several amendments to the product terms
  • review its other warranty products to ensure compliance with the Australian Consumer Law
  • monitor how motor dealers promote and sell its warranty products

In June, news emerged that NWC, a subsidiary of ASX listed McMillan Shakespeare, was subject to an $80 million class action alleging unfair and unconscionable conduct and misleading and deceptive conduct.

Members offering NWC products are advised to ensure that any documentation and processes align with the undertakings that NWC have provided to the ACCC.

To read a copy of the ACCC’s media release, which includes details of NWC’s undertakings, please click here.

 

David Blackhall
Chief Executive Officer
Australian Automotive Dealer Association Ltd
E: dblackhall@aada.asn.au
M: +61 413 007 833

James Voortman
Executive Director Policy and Communications
Australian Automotive Dealer Association Ltd
E: jvoortman@aada.asn.au
M: +61 452 535 696

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