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OFT hits electrical retailers where it hurts

Extended warranties in the dock

The UK’s consumer watchdog has slammed the sale of extended warranties on electrical goods following a 10 month investigation.

The OFT has concluded that electrical retailers such as Dixons Store Group, which has snatched nearly a third of the £500 million warranty market, can not be relied on to regulate themselves.

Its report, published today, stated that competition was not effective, consumers were not sufficiently protected or informed, and that it would be referring the matter to the Competition Commission.

The Competition Commission will decide whether the sale of electrical warranties is operating against the public interest and indicate whether a monopoly exists. It will report to the government in 12 months time.

The OFT’s report echoes the views of PC Advisor visitors who comprehensively condemned the sale of extended warranties by electrical retailers - which often adds 50 percent to the overall price of a product - in a website poll back in November. A massive 87.1 percent of respondents stated they thought such warranties were a rip off.

Dixons Store Group, which includes PC World, Dixons, Currys and The Link, has unsurprsingly rebuffed the report. "There is no justification for this expensive and disproportionate action. It is inappropriate and unjustified and we have provided material to the OFT to demonstrate this," it said in a statement.

PC Advisor would like to point out that if you’re worried about faulty goods, you are covered under the Sale of Goods Act, which places responsibility on the retailer to sell goods that are ‘fit for their purpose’.

Secondly, you are almost always covered for a year by the manufacturer’s warranty.

And if you’re truly worried about accidental damage why not get insurance from a third party, such as your contents insurance provider. Such third parties can often offer much better value for money.

If you’ve taken a Dixons Group’s Coverplan warranty in the last week or so, it’s not too late to cancel. Warranties can be cancelled within 14 days and you will receive a full refund. The number to call is 0870 600 1550.


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