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EDITIONS
Thursday, 6 February, 2003, 00:10 GMT
Retailers accused of 'dubious tactics'
Electrical goods
Warranties for electrical goods can be expensive
Electrical retailers have been accused of using "dubious tactics" to sell customers extended warranties.

Which magazine sent staff anonymously to a host of High Street retailers - and found sales staff willing to exaggerate the cost of repairs to make the sale.

If a salesperson tries to sell you a warranty, just say "no". They're usually too expensive, generally go unused and you'll probably get a better deal elsewhere

Helen Parker, Which magazine

Some staff claimed to be in fear of losing their jobs if they did not sell sufficient numbers of extended warranties.

The Which report coincides with an ongoing investigation by Competition Commission into the sale of extended warranties worth an estimated 800m a year.

Unreliable claim

According to the Which report a salesperson at a major High Street store told a customer that the lifespan of dishwashers, washing machines and tumble dryers was "about three or four years."

However the survey showed washing machines - the most likely to break down of the three items - need a repair in only 17% of cases in the first five years.

Another salesperson said the pressure to sell warranties was "intolerable", adding that failure to reach sales targets often resulted in disciplinary action.

"If a salesperson tries to sell you a warranty, just say 'no'," said Helen Parker, editor of Which.

"They're usually too expensive, generally go unused and you'll probably get a better deal elsewhere."

In response, the UK's largest electrical retailer Dixons said that the report was "misguided and inaccurate."

Investigation

Last July, the Office of Fair Trading (OFT) reported the findings of a 10-month investigation into extended warranties.

It concluded that self-regulation in the industry had failed and condemned the tactics used by electrical retailers to sell warranties.

The OFT said one in five electrical appliances was sold with a warranty but that such policies typically add around 50% to the cost of the product.

The OFT has since referred sale of extended warranties to the Competition Commission.

The Commission is due to report in the summer.

See also:

22 Oct 02 | Business
15 Oct 02 | Business
03 Oct 01 | Business
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