Compensation for damages & loss

You can seek compensation for damages and losses you suffer due to a problem with a product or service if the supplier could have reasonably foreseen the problem. This is in addition to your repair, replacement or refund.

What compensation is covered?

Compensation includes the cost to you caused by a problem with products or services. This is usually financial costs, but can include other costs such as lost time or productivity.

It can be hard to put a dollar figure on compensation for damages and loss. Compensation should put you in the position you would have been in if the products or services had done what they are supposed to under consumer guarantees.

For example: A consumer took their curtains to a dry cleaner to be dry cleaned. When the consumer returned to pick up their curtains they were badly damaged. The consumer would not only be entitled to a remedy for the defective service (e.g. a refund for the dry cleaning fee) but also have the dry cleaner pay for the loss incurred. This could include the dry cleaner paying to replace the curtains.

What is not covered?

Businesses do not have to pay for damages or losses that:

  • are not caused by their conduct, or their products
  • relate to something  independent of their business, after the goods left their control.

Misleading claims about compensation

Suppliers must not mislead you about your rights to compensation by stating they are not responsible for any losses you might suffer during or after using the product or service.

Making a claim for compensation

Take the following steps to make a claim for compensation:

  1. Work out an accurate amount of compensation you would need to return you to the financial position you were in before the problem occurred.
  2. Contact the business verbally or in writing to explain the problem and present your claim for compensation. You may also want to ask for a refund or replacement.
  3. Show proof of purchase with a receipt or bank statement.
  4. If the supplier refuses to discuss your compensation claim or you cannot negotiate an agreement, you can seek formal dispute resolution or take legal action.

If it’s not right, use your rights

Make a consumer complaint

More information

Repair, replace, refund