Guarantees - drawn-out issue

Lately we have had to refer to this issue quite often and, yet, we are still experiencing extreme difficulty clarifying the issues. I still face consumers who lack awareness and knowledge on guarantees. To make matters worse, traders take advantage of the situation. This generates confusion and misunderstandings.

As regular readers know, we have a list of six companies who offer "no-nonsense" commercial guarantees which we feature regularly. Well, one of the six companies, namely Delta Homecentres of the Mizzi Group, has been offering commercial guarantees on certain products with a validity period of six months rather than our agreed two years minimum.

I discussed the matter with Chev. Maurice Mizzi, chairman of Mizzi Group, and subsequently I communicated with Dr Louis Thompson. These are our concluding messages:

Dear Dr Thompson,

I regret to inform you that, unless your clients make a commitment to offer a minimum two years commercial guarantee validity period on all guaranteed items, I cannot include your clients' company in our list of companies who offer 'no-nonsense guarantees' (Adrian Muscat Inglott).

Dr Thompson replied:

My clients Mizzi Ltd, operators of Delta Homecentres, have informed me that while they are in a position to continue giving two years' commercial guarantee on the great majority of their products, they can only give a six-month guarantee on a restricted number of low value items.

At this stage it is at your discretion whether you think Delta Homecentres should remain on your list of "no-nonsense guarantees".

Kindly inform us of your decision.

I insisted that I am not prepared to retain Delta Homecentres in our list unless they offer a two-year commercial guarantee on all their products.

In this context, to be fair, I must point out that it is not against the law to offer a six-month commercial guarantee. However, the companies in our list made a commitment to offer a minimum two-year commercial guarantee on all their products.

On the other hand the legal guarantee is obligatory. It is valid for two years and protects all consumers on all bought items against a latent defect, I repeat, for two years.

The lack of consumer awareness/knowledge of guarantees is highly disturbing and some traders unfortunately exploit the situation. This is why I have recently been giving this issue so much coverage and I appeal to you to keep a copy of this column to point out your rights to traders who may try to take advantage.

However, although there are traders who offer six-month guarantees and knowingly misinform their customers that after six months there is no guarantee, others are genuinely unaware of the legal two-year guarantee.

The crux of the matter is that when suppliers offer commercial guarantees valid for two years or more, everything is simple and straightforward. On the other hand, in many cases, traders offering commercial guarantees for less than two years add a clause stating that the respective guarantee is in addition to the consumers' statutory legal rights and will not diminish their legal rights. The point here is that many consumers are not aware of their legal rights in this context.

Moreover, I have never seen a guarantee with a validity of less than two years in which it is explained that the legal guarantee is valid for two years. This is why I insist that, to be included in our list, traders must offer a commercial guarantee for at least two years. In this spirit I repeat that there are two types of guarantees, legal and commercial.

Legal guarantee

In a trader/consumer transaction (i.e., an item sold by a trader to a consumer) the consumer is entitled to the legal guarantee. The relevant provision is in the Consumer Affairs Act, Part VIII, article 78 in which it is clearly stipulated that:

"The trader shall be liable under the provisions of articles 73 and 74 where the lack of conformity becomes apparent to the consumer within two years from the delivery of the goods. This period of prescription shall be suspended for the duration of negotiations carried on between the trader and the consumer with a view to an amicable settlement."

Moreover, while bearing in mind that traders try to evade this issue through contractual clauses, to further drive the point home, in article 81 it is stressed that:

"Any contractual clauses or agreement concluded by the consumer with the trader before the lack of conformity is brought to the attention of the trader, are not binding on the consumer if such clauses or agreement directly or indirectly waive or restrict the rights available under this Part."

As can be seen, the legal guarantee gives the consumer ample protection.

Commercial guarantee

Unlike the legal guarantee, the commercial guarantee is not obligatory. This is offered on the basis of the principles of a liberalised marketplace where traders try to win your custom by offering you a better service than others. This means that, when traders offer a commercial guarantee the consumer still has the benefit of the legal guarantee. Here I again stress that the law stipulates that their commercial guarantees

1) are formulated in at least one of the official languages of Malta;

2) set out the name and address of the guarantor, and clearly state the permanent address of the place of trade or business;

3) clearly state the contents and the duration of the guarantee from the date of purchase;

4) clearly specify the manner how a consumer is to proceed to make a claim and to obtain execution of the commercial guarantee;

5) clearly state whether the commercial guarantee may be transferred. Unless stated that it may not, this guarantee may be transferred;

6) provide a clear description of the goods or services covered by the commercial guarantee;

7) clearly stipulate what the guarantor undertakes to do if there is a defect in the goods or if the services are not properly carried out; and

8) state that the consumer enjoys rights at law which are not adversely affected by the guarantee.

Further to these eight commitments that are legally applicable to commercial guarantees, with a particular focus on our list of suppliers who offer "no-nonsense" guarantees, I insisted on more commitments and conditions in favour of consumers.

Regarding the transferability of guarantees, the law only obliges suppliers to inform buyers whether the guarantee is transferable or not. They can choose not to make it transferable as long as they inform the buyer accordingly. However, suppliers in our list must agree to make their guarantee transferable.

Another condition I insisted on is applicable to bulky appliances. Basically, if a breakdown occurs during the guarantee period the respective consumer can call the suppliers on the telephone. Should it not be possible to sort the problem out on the telephone, these suppliers made a commitment to send a technician to the respective customer's address and there will be no 'call-out' fee charged.

Another important aspect of the commercial guarantee of these suppliers includes coverage for parts, labour and transport for the full duration of the guarantee.

Regarding the duration of the guarantee I tried to negotiate longer periods for all companies, without success. However some were willing to offer guarantees for longer than the legally stipulated minimum of two years on some products and they actually do. I also often stress that if you have a problem with the suppliers on their guarantees, particularly if they do not abide by the above terms and conditions, to write to me.

In this specific context you are my watchdogs and, I must confess, I was rather sceptical about a supposedly 100 per cent compliance by the six suppliers to these conditions until we had to exclude Delta Homecentres of the Mizzi Group.

However, a significant factor is that we used to have more than six companies before having negotiated these terms and conditions. At this point, now that our list has been reduced to five I might as well feature it again:

Aplan Ltd: managing director Alex A. Mizzi; general manager Lino Apap; head office (and outlet): Aplan Centre, Birkirkara Bypass, Birkirkara BKR14. tel: 2148-0590, 2148-0593; fax: 2148-0598; e-mail: admin@aplan.com.mt.

Centro Casalinga: managing director: Jacques Scerri, MBA, B.Com. (Hons.); head office: J.J. Scerri Co. Ltd, Quarries Street, St Venera; tel: 2125-0980/1/2; fax: 2123-5942; e-mail: sales@jjscerri.com.

Forestals (Appliances) Ltd: managing director: Tancred Tabone; head office: 110, The Strand, Sliema, tel: 2134-4700/7; fax: 2134-4709; e-mail: info@forestals.com Website www.forestals.com

Oxford House Ltd: managing director: John Galea; head office: Notabile Road, Mriehel; tel: 2144-2334; fax: 2148-8656; e-mail: info@oxfordhouse.com.mt Website www.oxfordhouse.com.mt Outlet: Notabile Road, Mriehel.

The Phoenix Group: managing director: Steve Petroni; head office (and outlet): Old Railway Track, St Venera; tel: 2385-2200; Servicing department: 2385-2300; fax: 2144-9216; e-mail: info@phoenixgroupmalta.com. Website: www.phoenixgroupmalta.com.

I conclude by repeating that, if you do have a problem with these companies on the guarantee terms and conditions as outlined above, you can write to me.