Stratos Television closure | The Jackal

30 Dec 2011

Stratos Television closure

Re: Formal complaint concerning the closure of Stratos Television.

By email:

Dear Neville Lord,

I purchased my freeview decoder specifically to watch Stratos Television and not infomercials. I have also grown to like TVNZ 7. One month after my purchase, closures were announced because of a lack of government funding.

The supplier had advertised their product as providing those services. The Consumer Guarantees Act 1993 (PDF) states:

14 Provisions relating to manufacturers’ express guarantees 
(1) An express guarantee given by a manufacturer in a document in respect of goods binds the manufacturer where the document is given to a consumer with the actual or apparent authority of the manufacturer in connection with the supply by a supplier of those goods to the consumer.
(2) An express guarantee which is included in a document relating to goods and which appears to have been made by the manu­facturer of the goods shall in the absence of proof to the contrary be presumed to have been made by the manufacturer.
(3) Proof that a consumer was given a document containing ex­press guarantees by a manufacturer in respect of goods in connection with the supply of those goods to the consumer shall, in the absence of proof to the contrary, constitute proof that the document was given to the consumer with the authority of the manufacturer.

That means the advertisement and documentation that said Stratos would be supplied if the product was purchased is an express guarantee.

It does not matter that the supplier is not directly linked to the broadcaster, as they advertised the service as if they had authority to do so.

21 Failure of substantial character
For the purposes of section 18 (3) of this Act, a failure to com­ply with a guarantee is of a substantial character in any case where—
(a) The goods would not have been acquired by a reason­able consumer fully acquainted with the nature and ex­tent of the failure; or
(b) The goods depart in one or more significant respects from the description by which they were supplied or, where they were supplied by reference to a sample or demonstration model, from the sample or demonstration model.

If the supplier had informed me that the service they were advertising would fail, I would not have purchased the product. This will be the same for may thousands of New Zealand consumers.

I could try to return the product, but this would not achieve what I actually want... the return of service for a product I purchased in good faith.

The act allows for compensation to be obtained for any reduction in value of the goods below the price paid or payable by the consumer. The value of the product is reduced because a service advertised that it would provide no longer exists.

It was reasonable to expect the continuation of that service when the item was purchased. Therefore all consumers of the misrepresented product are eligible for compensation.

As Chief Advisor of the Commerce Commission, I would appreciate you looking into this matter.