Thursday, 14 April 2011

Fair Trading probe into extended warranties

Today's market study into extended warranties targets an area which has been a running sore for consumer regulation.

It's 10 years since the Office of Fair Trading did a similar study. New rules were imposed but shoppers are still losing out.

Now the market is worth £750m. But the OFT found in 2008 that buyers were losing nearly half that in what it called "consumer detriment" - paying too much or buying something they don't need.

A quarter of all electrical goods are sold with an extended warranty. The worry is that so many warranties are sold at the till, with the goods, that few people check the price. Then they don't bother to cancel.

This market study could end in enforcement action, another Competition Commission enquiry, recommendations to government - or nothing at all.

We'll see in the summer, when the market study is completed.

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