The Australian Competition and Consumer Commission has welcomed a court enforceable undertaking volunteered by WFI Insurance Limited (trading as Lumley Retail Warranty) (Lumley), following concerns being raised about customer care plan brochures offering extended warranties underwritten by Lumley for consumer products supplied by retailers. The brochures have been in circulation since 2011.

The ACCC was concerned that the brochures did not sufficiently identify the degree of overlap between the remedies available under the extended warranty customer care plans purchased by consumers and those already available to consumers  under the consumer guarantees contained in the Australian Consumer Law (ACL).  As a result, the ACCC considered that the brochures had the potential to mislead consumers.

Lumley has cooperated with the ACCC’s investigation, and has provided the ACCC with an enforceable undertaking pursuant to which Lumley acknowledges the ACCC’s concerns and undertakes to: 

change the extended warranty customer care plan brochures to include additional information to assist consumers compare the features of the plan being sold with the existing remedies available under the ACL; provide consumer law compliance training to Lumley and retailer staff; and design and work with retailers to implement a program for monitoring retailers’ customer care plan selling practices, including by mystery shopping, and if necessary improving those practices.

“The ACCC believes that many consumers purchase extended warranties because they do not realise the extent of the protections provided by the Consumer Law. It is very important that extended warranty products being sold to consumers should clearly identify the benefits they are providing that go beyond those rights and remedies already available to consumers and that representations made at point of sale do not mislead consumers about the extent of the benefits being acquired,” ACCC Deputy Chair Delia Rickard said.

“The undertakings provided by Lumley are significant as they reach beyond the direct actions of the underwriter of these extended warranty plans and will influence the representations about the benefits of the plans which are made at the time of sale to consumers,” Ms Rickard said.

“Lumley is the first underwriter in the industry to agree to roll out such a program, and the ACCC acknowledges and welcomes the industry lead taken by Lumley by committing to the steps contained in this undertaking. The ACCC will be encouraging other extended warranty underwriters to adopt similar measures,” Ms Rickard said.


Lumley is a large extended warranty underwriter and claims administrator for a number of retailers of household electronic and white goods who sell extended warranties (known as customer care plans) to consumers

The ACCC considered that specific statements made in certain versions of the brochures drafted by Lumley in conjunction with retailers impliedly represented that:

the cost of the customer care plan to the consumer did not include any costs for benefits which overlap with the ACL, when in fact certain costs may have been for benefits that did overlap with the ACL; the customer care plan provided some benefits which may overlap with the ACL, when in fact those benefits did overlap; and the benefits to a consumer under the customer care plan were in addition to the consumer’s rights and remedies under the ACL, when in fact some benefits of the plan overlapped with ACL rights and remedies and were not in addition to those rights or remedies.

Consumer guarantees under the ACL provide consumers supplied with a faulty product with rights to a repair, replacement and, where there is a major failure, a refund, as well as consequential damages in some circumstances.  These rights exist for a reasonable time from the date of supply, regardless of any express manufacturer’s warranty or extended warranty purchased in addition by the consumer.

The ACCC has been assisted in achieving this outcome by the Australian Securities and Investments Commission, which has responsibility for representations made in relation to financial services.

The undertaking is available on the public register.