Electrical stores defend 'rip-off' warranties

Electrical retailers in Britain have used a hearing to defend their record on selling extended warranties.

Electrical retailers in Britain have used a hearing to defend their record on selling extended warranties.

The Dixons Group and rival Comet said the policies they offer provide good value for money.

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The concept of the simple 'we will repair it once it has broken down', as defined by the inquiry terms of reference, has become outdated
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John Clare, managing director of the Dixons Group

The meeting was called by the British Competition Commission, which is in the latter stages of an inquiry into Britain's £800 million market for warranties on household electrical products.

Retailers have faced fierce criticism charging much of what the policies promise is covered by existing consumer protection laws and that sales staff use "strong-arm" tactics.

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The Consumers' Association, which has been most critical of extended warranties, claims the big retailers have a lot to lose if the Commission decides the present market works against shoppers.

But Mr John Clare, managing director of the Dixons Group - which includes Dixons, Currys, and PC World - told the hearing: "We believe that much of the debate about extended warranties has become stuck in a time warp.

"The concept of the simple 'we will repair it once it has broken down', as defined by the inquiry terms of reference, has become outdated.

"While this remains important it becomes less so with the introduction of features such as accidental damage cover, helplines and cover for so-called 'no fault found' policies," he said.

"These are all things the basic manufacturers' warranties don't cover but are covered by us from the date of purchase".

He also rejected allegations that shop staff use pressure-selling tactics to get customers to buy warranties.

PA