ACCC Spotlights Caravan Industry For Poor Treatment of Consumers

The Australian Competition & Consumer Commission (ACCC) released a  new caravan retailing report today, showing that Australian consumers have conveyed widespread guarantee failures, misrepresentations by caravan suppliers, and unexpected caravan delivery and repair delays.

The report highlights key issues of concern in the market for new caravans and guides businesses regarding their obligations to comply with the Australian Consumer Law.

An ACCC survey of 2,270 caravan owners shows that 80% reported having experienced problems with their new caravan.

Consumer complaint numbers to the ACCC about the caravan industry keep increasing, reaching over 1,300 reports in the last five years, according to a media release.

“A caravan can represent a significant financial and emotional investment. Some people save for years in anticipation of purchasing and traveling in a caravan. If something goes wrong, the harm can be significant,” ACCC Deputy Chair Delia Rickard said.

Under Australian Consumer Law, if the consumer’s caravan fails to meet one or more consumer guarantees, for example, it is of unacceptable quality or doesn’t match a description made by a supplier. They are entitled to a remedy from the supplier. A remedy can be a repair, replacement, or refund.

If a consumer guarantee failure is minor, the supplier can choose to offer a repair. If the supplier refuses to provide a repair for the minor failure, consumers are entitled to a refund or a replacement. 

If a failure is major, the buyer is entitled to their choice of a replacement or refund. It is also important to note that multiple minor failures can be considered major failures, allowing them to choose between a refund or replacement.

The ACCC received reports from many consumers saying when they experienced a failure with their caravan, they couldn’t get a remedy, or the remedy given did not fully address the issue.

“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,” 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,” she said. “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 law also provides the retailer is entitled to recover any costs associated with providing that remedy from the manufacturer. This reimbursement includes parts and labor associated with repairs.

In response to an ACCC survey, 40% 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,” 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,” 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,” she 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 relate to COVID-19 supply chain disruptions and recent increased demand.

“We expect that suppliers will be upfront with consumers about the timeframe for delivery of their caravan and any potential delays during the sales process and continue to proactively communicate until delivery,” 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.

The ACCC has released guidance for buying a new caravan to help consumers and businesses understand their rights and obligations when buying and selling caravans.

The commission has also developed information for the caravan industry to comply with consumer and competition laws requirements.