Simon Read: Shops have the green light to carry on making fat profits flogging costly cover

 

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The Office of Fair Trading has resisted calls to introduce greater protection for consumers from expensive extended warranties. The watchdog should have banned the sale of the cover at the point-of-sale.

Instead, shops which flog the cover to people buying TVs, computers and so on will be allowed to continue to do so as long as they improve the information they give to buyers. They will also launch a comparison website.

Forgive me for not being ecstatic  about this news. But I think companies such as Dixons, Comet and Argos – which make £1bn a year from pushing the cover – have got away with it.

The OFT has given shops the green light to continue making fat profits by flogging expensive insurance, after luring customers in by slashing prices.

Extended warranties shouldn't be outlawed. At the right price they can make sense. But the policies sold by stores often cost as much as the item, especially on lower-value goods.

But worse, they can be totally unnecessary. Many simply replicate the cover people have under contents insurance they've already paid for.

The policies shouldn't be pushed on us when we're shopping. Ban their sale at shops and give people a choice.

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