A supplier must meet the consumer guarantees for providing services:

• with due care and skill
• which are fit for any specified purpose
• within the time specified, or within a reasonable time (when no time is set).  

For information about consumer guarantees for services, see our consumer rights for  services page.

Refunds and compensation

If a service does not meet a consumer guarantee, the consumer should contact the business first. See our advice on contacting a business including sample letters.

The consumer may be able to get a remedy, such as a refund, cancellation; replacement and/or compensation . The type of remedy a consumer can ask for depends on if the problem with the service is a major or minor failure.

Major failure

A major failure happens when:

• the delivery of the service creates an unsafe situation.
• the consumer would never have bought the service if they knew about the problem beforehand. This can include how long it would take.
• the service does not achieve its intended purpose as:
  • the consumer asked for or
  • salesperson said it would or
  • normally expected for the type of service, and the problem can’t be resolved quickly.

Remedies for major failures

If there is a major problem with the service, the consumer has the right to choose between cancelling or keeping the contract for service.

Keeping the contract

The consumer can choose to keep the service contract and

• negotiate paying a lower price taking the problem into account.
• If they paid up-front, request a refund for the difference in value of the service

Examples of major failure

• A car is not powerful enough to tow the consumer’s boat because its engine is too small, despite the consumer telling the supplier they needed the car to tow a boat
• The goods are unsafe, for example an electric blanket has faulty wiring
• A ski jacket is not waterproof because it is made from the wrong material
• A consumer tells a pay TV company they want to watch the American Basketball (NBA) finals. They sign up to a 12-month contract but the NBA season is over before the company installs the service.
• A consumer wants to increase the memory capacity of their computer. The technician damages the hard drive when doing the installation. The repair will take another six weeks, but the consumer needs the computer within a week.
• A consumer pays for pavers around their pool. The pavers are not anti-slip as the consumer asked for. They are also laid unevenly which can cause someone to trip.

Minor failure

If a problem is not classified as major, consumers cannot cancel and demand a refund immediately. They must give the business an opportunity to fix the problem first.

Business fixing a minor problem

The business must try to fix minor problems:

• free of charge; and,
• within a reasonable time.

A reasonable time to fix a problem depends on the nature of the service provided. A problem with a set of manicured nails would be much quicker to fix than a problem with a landscaping project.

Business can’t or won’t fix the minor problem

If the business can’t or won’t fix the problem or takes too long, the consumer can:

• have the problem fixed by someone else and get the business to cover any reasonable costs
• cancel the contract. The consumer can request a refund for some or all of their money
• get a replacement
• pay for the service at a discount price taking the problem into account.

A ‘reasonable cost’ would be within the normal range charged by businesses, and include:

• the cost of the repair and any other associated costs
• Must not include upgrades such as additional services or higher quality services.

Examples of minor problems 

• A consumer buys a shirt and the button falls off after the first wear
• A consumer buys a set of acrylic nails but they start to fall off within an hour
• A consumer pays for a perm and the curls start to flatten in a week
• A cleaner does not remove dust from window sills.
   

Cancelling a service

To cancel a service, the consumer can:

• tell or write to the business to cancel the service
• ask for a refund. The consumer will need to pay a reasonable amount for the work already done
• request a refund for any work not finished.

If there is a service contract, the consumer should check the contract for any conditions such as notice periods and termination fees.

When a services can’t be cancelled

A consumer cannot cancel a service or get a refund if the problem was outside the control of the business or if the consumer:

• changed their mind. If the business advertised they offer a refund or credit note when this happens, then they must follow this policy.
• insisted on having a service provided in a particular way, against the providers advice
• failed to clearly explain their needs to the business.

Requesting a refund

A consumer must pay for services they received that worked as expected.

A consumer may need to ask for some money back if they have already paid up-front. How much money will depend on if:

• all or only a part of the service was a problem or
• the service was not done at all. 

Products connected with services

Sometimes products and services are bundled such as mobile phones or internet services. Sometimes a problem develops with one part of the package - the product or service.

Problem with the product

A consumer can return the product due to a major problem and get a refund. They also have the right to cancel any services linked to the product.

A business does not have to refund any service the consumer has received up to the time they rejected the product.

Cancelling the service is not automatic with the return of the product. A consumer will need to let the business know if they want to cancel the service as well.  

Problem with the service

If the consumer cancels a service contract because of a problem, any products linked to the service must be returned. This includes products which do not have a problem. Any money paid for the product must be refunded.

It’s the consumers responsibility to return the goods, unless this would involve a significant cost.

Examples of linked products and services

1. Samantha signs up for a package that includes a modem and internet access. She can:
   • reject the modem because it faulty and keep her internet connection.
   • reject the faulty modem and cancel the connection.
2. Ben subscribes to 12 monthly editions of a cooking magazine for $200, including $80 for delivery. He receives only three editions in six months, so cancels the subscription and delivery. Ben is entitled to a $150 refund - $90 for the nine magazines and $60 for delivery.

Compensation

When a service does not meet a consumer guarantee, the consumer may also be able to claim for compensation for costs or damages caused by the problem.

For more information, see claiming compensation for consequential loss.

Resolving a problem

Contact the business first and explain the problem, see our making a complaint tips and sample letters.

If you’re unable to resolve the problem with the business, contact Consumer Protection on 1300 30 40 54.