HAS it ever occurred to you that the washing machine you are buying from your favourite hire-purchase company may be of poor quality and the company may not be able to provide the backup service you need?
Probably not, because consumers blindly put all their trust in the hire-purchase companies to be selling goods of merchantable quality. Purchasing goods of merchantable quality is your right but whether these goods possess the quality is a concern.
Unfortunately, consumers are facing problems with home brands or concocted brands which are evident from the number of complaints we receive, such as leaking fridges, malfunctioning TV sets, gas cookers, woks and toasters and washing machines giving electrical shocks. There are cases where consumers have purchased electrical items on credit which lasted only for a week.
Consumer Survey on Defective Products
The report on hire-purchase reveals that 21 per cent of the consumers reported that the goods they purchased went bad before payments were completed. 71 per cent reported that the goods were repaired. 55 per cent of the consumers whose goods went bad stated that they asked for a replacement product during the repair period, but only 19 per cent received replacement products.
The fact that approximately 30 per cent of the consumers reported that the seller did not repair the items taken on HP raises issues on the quality of the goods sold.
Unfortunately, many consumer durable products sold in hire-purchase stores in Fiji are either unknown 'brands' or generic brands or clones, or concocted brands (defined here as brands without factories). Over the past 15 years, especially with the rise of mass production consumer durable industries in China and other Asian countries, the proportion of such brands has increased markedly.
This was one of the key findings of council's recently launched report on 'Hire Purchase Industry in Fiji'.
The standard practice is for retailer/distributor to register a brand name and then identify a factory that will produce the generic. The products are shipped to Fiji along with spare parts in case problems are encountered with the product. These factories do not provide continuous back up support unlike the manufacturer of branded products.
The manufacturer will not take responsibility if a problem occurs and that explains why spare parts are sent with the products unlike other branded product. In branded products, the manufacturer will stand by its product through provision of manufacturer's warranty.
It is also possible that the same factory would produce the same goods under different brand names as ordered by the distributor/supplier without providing certification on the products. Research and development report plus standard certification is not issued by the factory.
Since there is no factory warranty for "home brands", it is open to scrutiny.
To prevent scrutiny on product standards and certifications, the hire-purchase company itself provides warranties to consumers.
Home brands if produced by branded manufacturer based on an international standard with back up support are as good as branded products.
Unfortunately, most of our home brands entering Fiji are "without factories".
Fake Energy Label used in Home Brand product
One home brand refrigerator appears to be using a fake energy rating label. The home brand fridge, has 4 star rating with the message that the product is tested in accordance with AS/NZS 4474.2, which is a joint Australia/New Zealand standard for regulating energy labeling for refrigerators and freezers. The label also indicates that the rating can be checked at www.energygov.au.
Upon checking this website no information was found for that particular brand of refrigerators. This is another deceptive method used to convince consumers that they are buying energy efficient products.
Some hire-purchase companies also mislead consumers with false claims that "most" of its products come with "acclaimed quality standard and are certified", and that the "products that are financed undergo quality checks from respective regulatory authorities from the country of origin before they are allowed to be sold in Fiji. Every effort is made to comply with these requirements".
Unavailability of spare parts
Consumers also face the difficulty of finding the spare parts for home brand, clones or concocted products and if available, it is very expensive because of exclusivity. In many cases, consumers are told that spare parts are not available at all and therefore the products cannot be fixed.
This is absurd and makes one question as to why a product is sold in the market when there are no spare parts or back up support.
One glaring example is availability of the R600A refrigerant used in refrigerators. This gas is banned globally, but fridges entering Fiji had R600A refrigerant.
The council is handling a case where a home brand fridge is useless after three years because the fridge needs R600A gas which is not available locally.
The service centre has advised that around $400 will be needed to fix the fridge which was initially bought for $749.
The council checked with independent technicians who advised that the cost is high because the fridge will need some re-modification to use other refrigerants.
The council is often told that the home brands and concocted products sold in our market is to assist low income earners who can't afford branded products.
This case reveals the opposite. In the name of low income consumers, shoddy products are sold making the poor poorer.
In this case, the consumer is helpless since he is not able to get the fridge repaired despite spending $729 expecting the product to last longer.
The ones living a little above the poverty line are the worst hit as they are left with no or little choice but to buy "home brands".
What is more heart-breaking is that they buy these products on credit which means they end up paying 1.73 times more for the goods as they would have paid if they could afford to buy cash.
The report also highlighted those consumers whose goods became non-functional stopped repayments during the period the item was being repaired by the hire purchase companies.
But they were levied default charges for the non-payments.
When consumers queried this, they were given the run around — that the repair section is separate from payments and debt section.
These consumers suffered from additional charges as well as non availability of the goods. This is grossly unfair to the consumers.
Home Brand Vs Branded Products
Buying home brand is a great way to save money while ensuring that you are not compromising on product quality or your health or safety.
It is true that home brands or generics can definitely save you money, but if the product isn't effective, is of poor quality, servicing and availability of spare parts is an issue and the cost for repair is close to purchase price then you must think twice before purchasing the product.
You may be able to save initially by paying a lower cost but the repair and inconvenience costs will add up to your financial obligations.
Urgent Action Needed
The council reiterates that generics, home brand or in-house branded products entering Fiji market must undergo safety/environmental, energy efficiency, and testing procedures before the product is sold in the market.
The HP Companies must not be permitted to sell these products without a proper after-sales service support to the consumers.
Next week: We focus on problems with extended warranty.
* This is a weekly contribution from the Consumer Council of Fiji