Warranty 'rip-offs' face more criticism

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The Independent Online
THE Office of Fair Trading has been asked to examine retailers' sales of extended warranties on electrical goods to see whether an investigation into the practice is necessary, writes Mary Fagan.

The move was prompted by a government request following allegations by Nigel Griffiths, Labour's consumer affairs spokesman, that the public was being 'ripped off'.

Yesterday the Consumers' Association joined the attack on extended guarantees offered by some retailers and called on the OFT to conduct an investigation.

Mr Griffiths alleges that retailers are charging much more than the manufacturers of the goods for warranties - which offer protection after the standard guarantee expires - while not informing people of the cheaper alternative.

Almost all the main electrical retailers, including Dixons and Comet, offer extended warranties and are understood to make hefty profits from them.

Stephen Locke, a spokesman for the Consumers' Association, said the OFT should investigate.

'We have been concerned about the sale of extended warranties for some time,' he said. 'In most cases it can be a very expensive way to get peace of mind.'

Dixons and Comet defended their position, saying that the warranties are more expensive than those from manufacturers because they take a different approach.

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