Coverplan or Whateverhappens: are service plans still worth the money?
Since our post yesterday on problems consumers have faced with Dixons 'Mastercare Coverplan', now renamed as Currys/Dixons 'Whateverhappens', we decided to check to see if, as some commenters pointed out, that the problems with such extended service plans were now a thing of the past. Here is what we found out.
With 'Whateverhappens', an engineer will indeed come to your home and either repair the item there or collect it for repair at the repair centre. While some customers have had problems setting up the collection time, the collection or in-home repair is part of the 'Whateverhappens' plan. Also, rather than granting replacement after 6 weeks have elapsed with no repair, the policy is now 21 days, or 3 weeks.
That said, there have still been numerous reported problems with such extended service plans. Since late 2008, there have been complaints (see reader SystemDemon, also on MSE here and here) about elapsed times of well beyond 21 days with 'Whateverhappens'. But perhaps this is more of an administration problem than a mis-sale issue. After all, as consumers, we have to decide whether taking out such extended policies are really worth our money. Most policies are in fact similar to 'Whateverhappens'/'Coverplan', and when you sign the dotted line on your Service Agreement contract, you agree to paying monthly by direct debit or credit card mandate, giving you product support for however long you need it. This agreement is usually automatically renewed each month, and unless you cancel, the £7.99 monthly price adds up over 5 years to around a further £480.
Note that some things are not covered by the 'whateverhappens' policy:
- Regularly replaced items/consumable items
- Built-in batteries
- Bulbs (Except bulbs used in rear projection TVs)
- Damage or breakdown due to flood, wind or other severe weather conditions
- The cost of repairing or replacing a product which fails because anyone neglects, abuses or misuses the product
- Any service or benefit where the Service Agreement has been suspended
- Inoperability of a product caused by withdrawal of services by a third party
- Protection for plasma, LCD or rear projection TVs, dishwashers, vacuum cleaners, cooking and laundry products if used for business
- Image retention on a plasma, LCD or rear projection TV.
- Theft, loss or consequential loss
Of course, this is pretty standard across other similar extended warranty schemes, and at the end of the day, the responsibility of course lies with consumers to read the fine print instead of assuming 'Whateverhappens' simply means 'whatever happens'.
We should also point out that this isn't a rant about the Dixons/Currys 'coverplan' policy, but to simply ask consumers to think twice before being upsold to any such service plans in general.
Three final points on service plans in general if you want to take out such a policy:
1. The term of coverage from any additional policies you plan to purchase may overlap with the manufacturer's warranty. If you buy a two-year extended warranty and the first year runs concurrently with the manufacturer's warranty, you're essentially throwing away half the cost of the extended warranty, because in that first year you'll use the manufacturer's warranty for repair or replacement. So it's worth double checking what your current policy covers.
2. Extended warranties are not insurance, and are not really even warranties. Extended warranties are "service plans." A service plan is a promise to perform or pay for certain repairs or services. If you bought it with your credit card, the card may tack on an extra year to the manufacturer's warranty, so check with your card issuer.
3. MoneySupermarket reader apples33 wrote a template which we have modified slightly that you can consider using on any similar policies. It was designed specifically for a case where he was refused repair on an LCD with the 'Whateverhappens' policy, but of course, you can modify it to suit your needs:
Dear Curry's, Your name & address.........
Policy reference number ...........
When the <item> was taken into your custody under the, "whatever happens coverplan," I would like to remind you that I have numerous copies of photographic evidence, (one of which is enclosed for your inspection for comparison), as to the damage that was obvious at the time your couriers working with your permission collected the television. I would also remind you that under the "sale of goods act" that you have a legal responsibility for the "duty of care" and safe handling, whilst it is in your custody.
If further damage has occurred by your neglect to carry out your legal obligations has been caused, this is irrelevant anyway in this case, as the original accidental damage caused by <reason>, no matter how small or large, has detracted from any possible viewing pleasure and reasonable enjoyment from the future use of the <item>.
This is the sole reason for the existence of the insurance in the first place to cover this very event, and I hold you responsible as the retailer that the contract is with to fully replace the screen as part of that cover entitlement, otherwise the matter will have to be taken to a higher authority with the possibility of you facing legal action.
Please give me your written response to this reasonable request within the next few days and let me know what you are going to do to rectify the accidental damage under this cover, or I shall reluctantly be forced to take further action to resolve this matter.
There are of course limitations as to what the letter can probably achieve, but if you've taken all reasonable measures to have the damage repaired and still face refusal, it may be worth sending something similar in the mail. Remember to send the letter via recorded delivery to give you proof.
Finally, I personally apologise regarding the previous confusion over the 'Whateverhappens' home collection and repair time guarantee, and did not in any way mean for the article to be a rant on this policy nor DSGi but on service plans in general. In conclusion, I still believe that extended service plans are a bad bet for most consumers who don't read the fine print, and will remain a real rainmaker for electronics retailers in years to come.