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07 February, 2012

Extended warranty concessions offered by retailers

7 February 2012 Last updated at 08:29 GMT
Extended warranty concessions offered by retailers

Dixons, Comet and Argos have pledged to improve the way extended warranties for electrical goods are sold, the Office for Fair Trading (OFT) has said.
extended warranties

Measures include providing more information for shoppers and launching a price comparison website.

The actions come after the OFT carried out a study into the sale of extended warranties for electrical goods, which is worth £1bn a year.

The OFT is concerned that customers are not getting full value for money.

Dan Moore, project director at the OFT, told the BBC: "The key issue for us is that when warranties are sold they represent good value for consumers and that consumers get the best value when they purchase those products.

"There have been some important improvements in prices, however still some significant concerns remain. The market is still skewed towards the retailers too much and consumers still don't get full value for money when they purchase warranties."

In addition to more information and a price comparison website, the stores have also agreed to carry out mystery shopping exercises to ensure that shoppers are being given accurate information by sales staff.

"As a result of the OFT's concerns, Dixons, Comet and Argos, the largest retail providers of extended warranties, have offered undertakings which the OFT will now consult on whether to accept instead of referring the market to the Competition Commission for a detailed investigation," the OFT said.

The OFT said that it expected to reach a final decision on whether to accept the stores' proposals later in the spring.

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