The National Warranty Company (NWC) has undertaken to amend “potentially misleading” extended warranties it has been selling through new and used-vehicle dealerships nationwide since early 2015.

The move follows an Australian Competition and Consumer Commission (ACCC) investigation into concerns the warranties could mislead consumers as to the benefits available and the need for buying an extended warranty.

The ACCC was concerned that a product named “Extension to Manufacturer’s Warranty” misled consumers into believing they would receive the same terms as the vehicle’s manufacturer’s warranty, when in fact it contained additional exclusions and financial limitations.

Some statements in the product terms also gave the false impression that the warranty benefits were in addition to the statutory protections under the Australian Consumer Law, when there was clear overlap with consumer guarantee provisions.

In response the NWC has renamed the product “Optimum Warranty” and has agreed to make several changes to the product terms.

It has also committed to review its other warranty products to ensure compliance with the Australian Consumer Law and will monitor how motor dealers promote and sell its warranty products.

The National Warranty Company is owned by a private company named Davantage Group, whose principal place of business is in the Victorian rural centre of Traralgon. It also owns the Australian Vehicle Warranty Group, National Marine and Motor Assist, National Roadservice Australia and Premium Warranties Australia.

ACCC Deputy Chair Delia Rickard says suppliers must not mislead people into paying for rights they already have under consumer guarantees.

“NWC will now provide vehicle buyers with additional information about consumer guarantees, and clarification about any overlap between the extended warranties’ benefits and the rights and remedies under consumer law,” she said.

Ms Rickard says other extended warranty providers should adopt similar measures to improve their selling practices.