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Extended warranty hard sell to end

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Shoppers could be spared the hard sell for extended warranties when buying electrical goods if proposals put forward today by the Competition Commission (CC) are adopted.

In a letter to electrical retailers the CC said that punters should not be rushed into buying extended warranties when buying goods and needed time to decide whether to buy one or not.

If they want to go ahead, then consumers should be given more information about extended warranties including price and which type would be most appropriate. They should also be given the opportunity to shop around, rather than take the extended warranty plugged by stores.

Other proposals put forward today include giving consumers the chance to cancel their extended warranty within 60 days if purchased at the same time as the electrical product.

In a statement the CC said: "Information, and the opportunity and time to make a genuine, transparent, choice will, the Commission believes, stimulate competition in the market for extended warranties and lead to significant improvements in value
for consumers."

In May the CC said that retailers who sell extended warranties extended warranties - worth an estimated £800m a year - at the same time as punters buy a toaster or PC, for example, are involved in a "complex monopoly". At the time the CC published a series of proposals it believed could benefit consumers. Today's letter is a refinement of those earlier proposals.

Last year the Office of Fair Trading (OFT) called in the CC to examine the market in extended warranties.

Following a nine month investigation the OFT decided that "competition in the market did not appear to be working effectively and that consumers were not adequately informed or protected". ®

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Electrical retailers in 'complex monopoly' over warranties

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