Extended warranties under the spotlight

The Competition Commission is nearing the end of its investigation into the extended warranty market for domestic electrical goods.

The Commission, which has been looking at the issue since July last year, said that consumers deserve better information on the alternatives, should have time to choose and should get better value than at present.

Its streamlined proposals for tightening up the market have been given a cautious welcome by the Consumers' Association, which has called it "a clear step in the right direction" even though the recommendations don't go as far as it would like.

Initially the Commission wanted the industry and consumer groups to consider 19 remedies.

The revised list, which has been welcomed by retailers, drops proposals that they display the price of manufacturers' extended warranties and publish comparative tables.

"We are pleased to see those [proposals] go, as they were unworkable. While we still have a few concerns about the current recommendations, we will continue to work closely with the Commission," a spokeswoman for the Dixons Group told vnunet.com.

The list does retain what the Consumers' Association feels are key remedies. These include:

• Displaying the price and duration of the extended warranty with the price for the electrical appliance to which it relates.
• Giving consumers information on statutory rights.
• Allowing consumers to cancel within 60 days to receive a full refund.
• Offering consumers a pro rata refund after a longer period.

The consultation period for these proposals ends on 5 August and the Commission is expected to issue a report by 30 September.