Specific to Quebec, Bill 60 (An Act to amend the Consumer Protection Act and other legislative provisions) came into effect on June 30, 2010. Its design was to address perceived abuses regarding prepaid gift cards, contracts for services provided at a distance (e.g. cell phone contracts) and extended warranty contracts.
Regarding the sale of extended warranties, retailers are now required, inter alia, to disclose orally the existence and duration of any manufacturer’s warranty that comes with the goods, prior to offering to sell an extended warranty. Furthermore, at the request of the consumer, the merchant must be able to explain orally how to examine all other elements of the manufacturer’s warranty.
These disclosure obligations apply to sales of extended warranties in-store, but also, with some adjustments provided for in the Regulation, to on-line, distance and telephone sales.
Retailers engaged in the selling of extended warranties now face the task of training their staff to disclose the existence and duration of the manufacturers warranty, because failure to comply with these new provisions constitutes a prohibited business practice for which merchants can be fined, not to mention the risks of facing a class action and a claim for punitive damages.
Maintaining consistency in staff execution is already an extremely difficult task and likely not done to the perfection Bill 60 requires. Furthermore, several retailers buy their merchandise through wholesalers and distributors, with no direct relation with the manufacturer ,which sometimes can make it more difficult to gather all the relevant and up to date information that needs to be communicated to the consumer as regards the manufacturer’s warranty.
One such answer to the concerns Bill 60 addresses is Warranty Life.
Warranty Life is designed to track purchases for end consumers by keeping receipts, manuals, provide manufacturer warranty details and product claim information.
Warranty Life works with retailers to help consumers track this information and by doing so satisfy the requirements of Bill 60. Warranty Life then works to offer extended warranties to the end consumer and shares the profit with the retailer when a sale is made.
Not only do retailers increase their attachment rates by up to 60%, they do so with full compliance.
“We didn’t design our system with Bill 60 in mind, we designed it to help people first. The fact that it addresses Bill 60 concerns shows that we are on the right track.”
Warranty Life marks the first time a company has taken a comprehensive approach to the product lifecycle process. On top of the other key purchase info, Warranty Life users can easily locate product-related information like product manuals and repair locations. Plus, the system is designed to be inclusive, as it’s able to support all of the world’s largest manufacturers in a vast array of products.
Contributed By: Kateri-Anne Grenier, Norton Rose LLP