Concern over extended warranties

Gillian hands over our dossier to the commission chairman

By Gillian Lacey-Solymar Consumer Affairs Correspondent

The competition watchdog says it does have concerns about the extended warranties sold by many High Street retailers on electrical goods.

In the initial findings of its inquiry, the Competition Commission says there appears to be a lack of choice for shoppers.

It says it has found evidence that some shops are providing "misleading or incomplete" information when trying to sell the warranties.

"We have a public hearing on 25 April," says commission chairman Sir Derek Morris, "and if we need to consider remedies we would move on to that probably in May."

Pressure

The market is worth about £800m a year, but many shoppers complain of the pressure used in some stores to persuade them to take out a warranty.

Paul: "Uncomfortable"

Worker Lunch viewer Paul Feasey is among those who've been unhappy at the tactics used by some sales assistants.

"He just put on so much hard sell, we felt so uncomfortable we wanted to leave the shop - he would not take no for an answer," recalls Paul.

Gary McAvoy also feels the approach can be heavy-handed.

"It should be an option that's given and left at that," he says.

"They are pushing very hard and I believe it's all driven by sales for the salesperson."

As the commission's inquiry continues, Working Lunch has handed over a dossier of complaints from viewers, including some from shop assistants unhappy at the pressure sales techniques.

'Scale monopoly'

The companies so far under investigation include Dixons, Comet, Powerhouse, Argos, Littlewoods, MFI, Cornhill, Landmark, Pinnacle and London General.

The commission says there could be evidence of what it calls a "scale monopoly" involving Dixons.

This is because figures show the store has a 25% share of the electrical goods market.

The Office of Fair Trading has carried out investigations into extended warranties in the past, but the Competition Commission has greater powers.

It could:

bring in a statutory code of practice

put a ceiling on prices if it found they were too high

force stores to sell each other's warranties to offer a wider choice.