“Beaurepaires is a large and long-standing company that should have taken more care to ensure they complied with the law and consumers got a fair deal,” Commerce Commission Deputy Chair Anne Callinan says.

“The lack of processes and staff training resulted in customers being charged for Road Hazard Cover without their awareness or consent, and without the necessary information given to them.”

Beaurepaires’ invoicing system automatically added Road Hazard Cover to all customer quotes for tyre purchases, and required customers to opt-out if they didn’t want the product. Customers were reliant on Beaurepaires employees to both tell them about the additional product, and manually remove the Road Hazard Cover from the quote if requested.

In the judgement, Judge O’Driscoll says “an informed decision could not be made by the customer whether to accept or decline RHC. This was deceptive and unfair conduct on the part of the defendant.”

“Taking payment for services when customers aren’t aware they’re buying or have not expressed interest in purchasing is unacceptable behaviour,” Ms Callinan says

“We encourage all businesses to use an ‘opt-in’ sales approach. This allows consumers to make their own decisions and reduces the risk of breaching the Fair Trading Act.

“All businesses have a responsibility to be transparent about extended warranties and consumers’ existing rights so consumers can make an informed decision. A service doesn't need to be labelled as an extended warranty to be captured by the Fair Trading Act.

“Retailers must provide specific information when selling an extended warranty to help consumers decide if it offers value over and above the rights already available under the Consumer Guarantees Act,” Ms Callinan says.