The Commerce Commission says New Zealand Vacuum Cleaner Company Ltd (trading as Godfreys) has pleaded guilty to 10 charges brought by the Commmission in relation to the extended warranty agreements it sold to consumers.

The case is the first prosecution which focuses on the new Fair Trading Act 1986 provisions imposing specific obligations on the sale of extended warranty agreements, which came into force in 2014.

All of the charges are brought under the Act and relate to over 3,000 extended warranty agreements Godfreys sold to customers between 17 June 2014 and 22 September 2015.

The Commission says five of the charges relate to Godfreys' failure to comply with the written disclosure requirements for extended warranty agreements.  

"In particular, Godfreys failed to give written advice to customers of their rights under the Consumer Guarantees Act (CGA), how the extended warranty compared with those CGA rights, and that the customer could cancel the extended warranty within 5 days of buying it<" it says.

The other five charges relate to Godfreys' failure to verbally advise consumers about their cancellation rights before they entered into the extended warranty agreement.