Consumers let down by high street stores mis-representing extended warranties

Which? sent mystery shoppers into some of the UK’s biggest high street stores to investigate how staff sell extended warranties, and discovered that little has improved since the Office of Fair Trading (OFT) last year found consumers were not getting enough information to make informed decisions.

Our investigation found:

  • Some of the information and advice given by sales staff was exaggerated, confusing and plain wrong in some cases.
  • Currys/PC World tried to sell our shoppers a warranty on 11 out of 12 occasions with some staff saying that it covered ‘everything’ and one employee incorrectly claiming it would even cover pulling the door off your washing machine at a party. It doesn’t cover weather and water damage and problems due to ‘neglect and misuse’.
  • John Lewis did the best, only failing our test on one visit by claiming that the warranty was a ‘binding contract’ that we couldn’t cancel. A warranty that lasts more than a year and hasn’t been claimed on can always be cancelled.

Which? thinks many extended warranties don’t offer value for money. Most products are already covered by a manufacturer’s warranty of one or two years, and the Sale of Goods Act gives consumers the rights to return a product if it develops a fault. Consumers can also often get more comprehensive cover through their home insurance policy, although this may increase premiums.

Which? executive director, Richard Lloyd, said:

“Some high street retailers are making inaccurate and exaggerated claims about extended warranties to get people to purchase cover they may not need.

“Retailers should make sure their staff provide accurate information so consumers can decide whether to buy an extended warranty. We also want extended warranties to be regulated by the Financial Conduct Authority.”

Notes to editors:

1.    Which? mystery shoppers visited five high street retailers (Currys/PC World, John Lewis, Richer Sounds, Tesco, and independent stores under the umbrella group Euronics) 12 times each, asking about a TV or washing machine. We didn’t talk about a warranty unless it was first offered by the salesperson. Where staff attempted to sell us a warranty we rated that visit as a pass, unhelpful or fail:

PASS: accurate information given.

FAIL: where, in our opinion, they incorrectly stated consumer rights in relation to the warranty, or materially exaggerated what the warranty covered, or its benefits, compared with protection the consumer would automatically get, for example, under a manufacturer’s warranty.

UNHELPFUL: where we felt information was inadequate and more likely to confuse.

 

To see a copy of the full investigation, please visit the downloads section

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