Case Studies - Faults (network & hardware issues)

TDR Case Note T011692 (2012)


Warranty and liability for damage to mobile phone


The Customer purchased a Samsung Galaxy S2 phone for his son in December 2011 from the Scheme Member Provider (Provider), for $999. The phone stopped charging and then stopped working altogether in August 2012. The Customer returned it to the Provider and was advised that the warranty was void because the phone had been water damaged, and liability for damage from moisture and dampness was specifically excluded in the Samsung Galaxy S2's manufacturer's warranty. Instead, the Provider gave the Customer a quote for the cost of repair, being $487.92.

The Customer referred to the Consumer Guarantees Act (CGA), which states that a product must be fit for purpose, and submitted that a mobile phone must be able to be used outdoors and be durable. The Customer advised that the phone had never been near water or exposed to any more moisture than that could be expected through everyday use. The Customer therefore believed that the Provider should be bound to repair or replace the phone, or refund the purchase price.

The Provider responded that the phones it sold were as durable as a reasonable consumer fully acquainted with the state and condition of the goods would regard as acceptable. In this case the Customer's phone failed as a consequence of water damage that happened months after the phone had left its posession, and the Provider was not the cause of the damage.

Adjudicator's decision

The Adjudicator found that there was essectially two issues, whether there was water damage to the handset and if there was, whether the warranty could be voided by the Provider.

The Adjudicator found that there was clear evidence of liquid damage to the handset and that this was accepted as fact by both parties. The Adjudicator did not however find any evidence showing that the handset was damaged or in any respect defective when it was sold to the Customer. There was also no evidence showing that the water damage was caused by the Provider. The Adjudicator therefore considered that sometime during the 8 months when the handset had been out of the Provider's control after sale, the handset had been introduced to either water or heavy humidity. In addition, the Adjudicator found that the Provider made reasonable efforts to ensure that the Customer was aware that taking the handset into wet or high humidity environments at any time would void the warranty. For these reasons the Adjudicator found that the Provider was not liable to repair or replace the handset, or refund the purchase price to the Customer.

Final outcome

The Adjudicator dismissed the Customer's complaint and concluded that the Provider was not liable to pay compensation to the Customer. There was therefore no remedies awarded.