CRUZ-PEREZ/MORIARTY/GUSCIORA/COHEN CONSUMER ELECTRONICS LEMON LAW ADVANCES

Measure Would Regulate Warranties, Extended Warranties, Service Contracts for Electronics

(TRENTON) - The Assembly Consumer Affairs Committee today released legislation Assembly members Nilsa Cruz-Perez, Paul D. Moriarty, Reed Gusciora, and Neil M. Cohen sponsored to extend the consumer protections of the state's stringent automotive lemon law to consumer-electronic products such as televisions, iPods, and home entertainment systems.

"Many consumer electronics, like cell phones and computers, have evolved from flashy gadgets to necessary investments in everyday life," said Cruz-Perez (D-Camden), the panel's chairwoman.  "Consumers who make investments in devices that can cost as much as an automobile should be afforded the same protections against defects and malfunctions we give to new car buyers."

The measure, entitled "The Consumer Electronics Warranty Lemon Law" (A-1002), would mirror many of the protections already afforded to automobile purchasers under New Jersey's Automotive Lemon Law.

The bill would regulate consumer electronics warranties, extended warranties, and service contracts to provide a uniform set of consumer protection standards that include:

• Replacement of any electronic device that cannot be repaired within three attempts with a device of equal value and condition;
• A full refund of the total purchase price for any electronic item deemed defective;
• For stores advertising in-home service of electronics, dispatch of a service technician within 72 hours of receipt of a service request;
• The certification of the condition of any electronic device, in writing, by the warranty holder and a retail representative before the device is sent away for repairs;
• Honoring warranties despite cosmetic defects incurred with normal use;
• Honoring warranties even if the cost of repairs would exceed the purchase price of the device;
• Requiring manufacturer's warranties to take precedence over extended warranties and service contracts and;
• Requiring extended warranties and service contracts run consecutively with any existing manufacturer's warranty.

The committee amended the measure to clarify that it would only apply to individual items valued at $250 or more.

"Extended warranties and service contracts should not be viewed as little more than pricey headaches," said Moriarty (D-Gloucester), the vice-chairman of the panel.  "Consumers paying for the added insurance offered by these warranties should be confident that their money is going to protect their purchase and not padding the bottom line of a retail outlet."

"By extending lemon law protections to consumer electronics, manufacturers will be under increased pressure to ensure maximum quality control," said Gusciora (D-Mercer).  "Too often, consumers are stuck with defective, irreparable foreign-made electronic devices."

Violators would be subject to fines under the New Jersey's Consumer Fraud Act.  A first offense would carry with it fines up to $10,000.  All subsequent offenses would carry a penalty of up to $20,000.  Violators also could be forced to pay injunctive relief, triple damages, and restitution for any offense.

"We cannot continue to allow disingenuous electronics retailers and manufacturers to take advantage of New Jersey consumers," said Cohen (D-Union).  "Warranties and service contracts must be upheld, and violators must face harsh penalties for deceptive business practices."

The committee released the measure by a vote of 3-0-2.  It now heads to the Assembly Speaker, who decides if and when to post it for a floor vote.

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