A consumer may be able to claim for compensation from the business if a problem with a product or service causes:

• the consumer to pay more money because it didn’t meet the consumer guarantees
• injury to themselves or others
• damage to their property or belongings.

This is particularly the case where the business failed to meet a consumer guarantee.

A business does not have to pay if the damage or loss:

• was not caused by the product or service they provided
• relates to something independent of the business, after a product left its control.

Calculating compensation

Compensation is usually for financial costs but can include other costs, such as lost time or productivity. Compensation should cover the costs to put the consumer back in the position they would have been in if the problem hadn’t happened.

Example of compensation claim

A consumer’s new car has a fault causing it to leak oil on her driveway. Her dog runs through the oil and into the house, dirtying the carpet.

The car dealer would have to pay to clean the driveway but not the carpet.

The actions of the dog were unrelated to the car issue. The car dealer could not have predicted a dog would run through the oil and into the house.

How to claim compensation

A consumer can contact the business directly first, either verbally or in writing. They need to explain the problem and ask for compensation.

A consumer may need to provide the business.

• proof of purchase or receipt from when they originally bought the product or service
• photos of any damages
• receipts or quotes for any repairs needed
• ask for their preferred option of a refund, replacement or repair.

If the business won’t pay

Consumers can get help to negotiate with the trader by contacting Consumer Protection on 1300 30 40 54.

If this does not work, they can take legal action.

For more information about dispute resolution see our consumer complaints checklist page, contact our contact centre.