OFT force shops to sort out extended warranty sales

28 June 2012

new comet logoThe Office of Fair Trading have forced the hand of Comet, Dixons and Argos to make some big changes to the way they sell extended warranties to customers, with the retailers agreeing to maintain and publicise an independently-operated price comparison site for extended warranty insurance products.

As well as this price-comparison site (which will probably get investigated in a few years time), the retailers will also be providing information that's more easily available via in-store leaflets, through the websites and will offer the availability of alternative warranty providers.

On top of all that, they'll have to provide clear on-shelf information about the annual equivalent prices of 'Pay As You Go' warranties, so that customers will truly understand how much these rolling contracts will cost long-term. Independent mystery shopping exercises will ensure that the companies are playing by these new rules.

These rules have come into place after the Financial Ombudsman Service revealed that they'd been receiving a high number of complaints about these warranties, with the most common complaint being that the insurance didn't cover repairs or replacement of electrical and white goods after the manufacturer's guarantee has expired.

Ann Pope, a director of the OFT's goods and consumer division, said: "We think the undertakings we have secured are important for shoppers who will now have better access to the information they need to make an informed decision when choosing an extended warranty."

"We welcome the constructive approach taken by Dixons, Comet and Argos to agree this practical solution, which will bring more immediate benefits for consumers, and avoid the burden on business of further investigation."


  • Mustapha S.
    How about OFT just say that these warranties are a load of crap, and European Law requires goods to be fit for purpose for a reasonable length of time, 5 years I think. Unless it covers accidental (or rather, on purpose damage) then warranties are a load of shoite imo
  • dave r.
    I tend to take them. Had a vacuum cleaner from argos that broke down about 2 months outside of it's warranty, got a brand new one the same day as dropping the old one off. Saved me about £70 all in all. It depends on what you are buying and what you are using it for as to whether you need it
  • Mustapha L.
    the 5 years thing is you have 5 years to make a claim against a retailer and you have to prove that the goods were faulty from the start. very hard to prove as time goes on (usually get the item assessed by a independent expert to prove it was defective from day of manufacture. it is not a 5 year warranty though you can argue that it should last longer than a 1 year.
  • Stanley K.
    I think that extended warranties offer excellent value for money and all customers should be forced by law to take them out.
  • The D.
    I've only ever taken one warranty & having shopped with just about all of the electrical retailers what PC World/Currys offer is way beyond the rest. The article says some have pay as you go rolling contracts and yes PCW/Currys do do a monthly warranty (of which I have) but it's NOT A CONTRACT I can cancel whenever I wish. I know most people here hate Dixons, some have had terrible experiences but all I can add is my own experience which so far has been superb. Even my data recovery needs were sorted under the plan.
  • Dacouch
    Odd they mention PC World and Currys and in the same article mention the Financial Ombudsman as PCW and Currys do not come under the Ombudsman as they are not actual insurance policies. PCW & Currys just put the money in an unprotected trust and pay claims out of that. There is no protection from the Ombudsman and no guarantee you will be paid unlike an Insurance backed warranty. If the trust runs out of money then unless PCW / Currys top it up then you will get diddly squat
  • The P.
    If I hear once more about a magical 5 yeah European warranty I'm going to explode. We in this Country have the Sales of Goods act which states that items must be working for a satisfactory length of time. This differs from product to product. A helium balloon is covered by the sales of goods act but is satisfactory to last maybe a week to 2 weeks. A laptop should last maybe 4 years maybe 6 depending on the individual's perception and also factors like cost and overall quality. You would expect for example a £1000 laptop to last longer than a £250 one. If people are going to post about 5 year Europen warranties I suggest you go and read up on your consumer law in this country before bad mouthing things like extended service agreements. They are there most of the time for accidental damage as that is what the majority of claims are for. It's quite simple really. If you don't want extended cover and are happy to rely on things like home insurance for example (which I don't hear you complaining about) then don't take out the cover. Rant over. :-)
  • The P.
    Edit. 5 year not 5 YEAH lol. Damn you autocorrect.

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