Today the OFT accepted legally enforceable undertakings which aim to improve the way in which the three largest UK electrical retailers inform consumers about extended warranties.
The background to this is an OFT market study which was published in February 2012 and which concluded that customers were not getting the best value for money in the market from extended warranties. To address the concerns raised in the report Dixons, Comet and Agros agreed undertakings, which include inter alia:
- Maintain and publicise an independently operated extended warranties price comparison website, to make shopping around easier.
- Provide more easily available information via in-store leaflets and retailer websites, including on the availability of alternative warranty providers.
- Conduct regular independent mystery shopping exercises to help ensure shoppers get accurate information from sales staff - and report the results to the OFT.
- Provide clear on-shelf information about the annual equivalent prices of 'Pay As You Go' (PAYG) warranties, to help shoppers understand the longer term costs when they enter these rolling monthly contracts. This currently affects Dixons as the only one of the three retailers to sell PAYG warranties.
Ann Pope, Director in the OFT's Goods and Consumer Group, argued: “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.”
Further information: www.oft.gov.uk/news-and-updates/press/2012/53-12