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JULY 2022
     

'We are very concerned over reported failures'

Consumer watchdog puts caravan industry
on notice for poor treatment of customers

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THE caravan industry has been accused of widespread consumer guarantee failures, misrepresentations and unexpected delays in the delivery and repair of caravans.

A newly released Australian Competition & Consumer Commission (ACCC) report highlights key issues of concern in the market for new caravans and provides guidance to businesses about their obligations to comply with Australian Consumer Law.

In an ACCC survey of 2270 caravan owners, 80 percent reported having experienced problems with their new caravan.

The number of consumer complaints to the consumer watchdog about the caravan industry continues to rise, reaching more than 1300 reports in the past five years.

"A caravan can represent a significant financial and emotional investment," ACCC deputy chair Delia Rickard, pictured, said.

"Some people save for years in anticipation of purchasing and travelling in a caravan. If something goes wrong the harm can be significant."

Under Australian Consumer Law, if your caravan fails to meet one or more consumer guarantees ‒ for example, it is not of acceptable quality or does not match a description made by a supplier ‒ then you are entitled to a remedy from the supplier.

This can be a repair, replacement or refund.

If a consumer guarantee failure is minor, the supplier can choose to offer you a repair. If they refuse, you are entitled to a refund or a replacement.

If a failure is major, you are entitled to your choice of a replacement or refund.

It is also important to note that multiple minor failures can be considered a major failure, which entitles you to your choice of a refund or replacement.

Many consumers reported to the ACCC that when they experienced a failure with their caravan, they were unable to obtain a remedy or that the remedy provided did not fully address the failure.

"We are very concerned by these reported failures to comply with obligations under the Australian Consumer Law, and the impact that these failures have on consumers who have purchased a caravan which develops a fault," Ms Rickard said.

"Consumers need to be confident that when they make a significant financial purchase like a caravan, they will be able to get a refund, replacement or a repair if there is a failure.

"It is the ACCC's view that it is reasonable to expect a new caravan won't develop a major fault within the first several years of use."

Under Australian Consumer Law, a retailer must provide the consumer with a remedy when there is a consumer guarantee failure.

However, the Australian Consumer Law also provides the retailer is entitled to recover any costs associated with providing that remedy from the manufacturer.

This reimbursement includes parts and labour associated with repairs.

In response to an ACCC survey, 40 percent of caravan suppliers reported that a manufacturer had refused to reimburse them for providing a remedy to a consumer.

"While a supplier can take legal action against a manufacturer to recover costs, the ACCC's survey of suppliers found some were reluctant to take this step due to fear of retribution," Ms Rickard said.

"We are very concerned by reports that retailers are unable to obtain the reimbursement they are entitled to for providing remedies to consumers."

The ACCC is also concerned that many consumers believe suppliers have misled them during the sales process or when problems with their caravan arose.

The most frequently reported misleading claims were about consumer guarantee rights and their interaction with warranties.

"If your caravan has a major or minor consumer guarantee failure you may be entitled to a remedy, even if the warranty provided by the business has expired," Ms Rickard said.

Consumers also reported they believed suppliers made misrepresentations about their caravan's performance capabilities and tow-weight.

"Reports of misleading representations about caravan's tow-weight and other important performance capabilities are particularly worrying given the grave safety implications for consumers," Ms Rickard said.

"The ACCC will investigate and take enforcement action against suppliers and manufacturers we believe may have misled consumers."

The report also found that many consumers experienced delays in the delivery of their new caravan, or for repairs to their existing caravan, some of which relates to Covid-19 supply chain disruptions and recent increased demand.

"We expect that suppliers will be upfront with consumers about the time frame for delivery of their caravan and any potential delays during the sales process and continue to proactively communicate until delivery," Ms Rickard said.

The ACCC strongly supports proposals to strengthen the Australian Consumer Law, including by enabling enforcement actions and penalties for when suppliers have failed to provide remedies for consumer guarantee failures and when manufacturers have failed to
reimburse suppliers for providing remedies.

It has released guidance for buying a new caravan to help consumers and businesses understand their rights and obligations and also developed information for the caravan industry to assist in complying with the requirements of consumer and competition laws.

The ACCC is concerned with the rising number of complaints (1300) it has received about caravans over the past five years.

In November 2021, the ACCC released two surveys directed towards consumers and suppliers to better understand the issues they faced in the new caravan retailing market.

It received 2,270 relevant consumer responses and 67 supplier responses.

The consumer watchdog has also spoken directly with consumers, suppliers, industry associations and received feedback through industry forums.

In December 2021, the Treasury published a Consultation Regulatory Impact Statement (CRIS) on improving consumer guarantees and supplier indemnification provisions under the ACL.

This included consideration of civil prohibitions with pecuniary penalties for:

●  A failure to provide a remedy where a business is legally required to do so
●   Manufacturers’ failure to indemnify suppliers, and
●  Retribution by manufacturers against suppliers who seek indemnification.

The ACCC has provided a submission to the CRIS process advocating for the ACL to be amended to introduce these prohibitions.

Caravan Industry Association of Australia chief executive Stuart Lamont said : "The purchase of a caravan is not only a large financial purchase but one which is tied with much emotion. 

"While the vast majority of industry understand and adhere to their consumer obligations and supplier indemnification responsibilities under the Australian Consumer Law, there always remain opportunities for improvement."

He said the national body would work closely with state caravanning associations to assist industry in further understanding their obligations in dealing with consumers and industry businesses along the supply chain.

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