Worries over which warranty to choose

Which? expert Richard Thomson warns that retailers make huge profits from selling extended warranties
Which? expert Richard Thomson warns that retailers make huge profits from selling extended warranties
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Warranties are a topic that comes up time and time again in your letters and emails to Streetwise.

From standard manufacturers’ guarantees, to extended insurance agreements, the market is overloaded with different forms of consumer protection.

So it’s easy to become confused about what is on offer, and what your rights are if something breaks down.

And it doesn’t help when companies advertise product guarantees, but don’t tell the whole story of how they work.

When Pam Gran, of London Road, in Cosham, Portsmouth, bought an Indesit fridge-freezer, it came complete with a large sticker advising her to ‘activate your FREE five-year parts guarantee NOW’.

Thinking she had stumbled across a complementary bonus feature, the 60-year-old called the manufacturer.

She said: ‘When I spoke to Indesit it was clear there was more to it than just getting free parts.

‘They told me the only people who would be supplied with parts were their engineers, and advised me to pay £96 for a five-year labour insurance plan.

‘I agreed but now I’m having second thoughts. The attitude of the call-centre person was that these products don’t last long, so I should make sure I’m protected.

‘But why shouldn’t they last? We pay enough for them.’

Pam has hit the nail square on the head: warranties are too often being used to make you pay for something which the retailer should be providing free of charge.

When Streetwise called Indesit to ask about its parts guarantee, just like Pam we were told that because one-off call-out and labour charges on average add up to more than £100, taking out their insurance makes financial sense.

The offer’s terms and conditions state: ‘All functional parts are guaranteed for five years. We only ask that these are fitted by our engineers. During the first year, our engineer’s time and labour are free.’

But as consumer rights expert Richard Thomson tells readers on almost a weekly basis, the Sale of Goods Act 1979 states that products must last a reasonable length of time.

Senior Which? researcher Tim Young believes the huge profits companies make from selling you extra protection contributes to ever-increasing repair costs.

‘Retailers want to sell extended warranties,’ he said. ‘Manufacturers know this and they don’t want to rock the boat.

‘So you don’t have to be too cynical to say it is in the manufacturers’ interests to hike up the cost of call-outs and repairs.’

But just because getting things fixed is expensive, that doesn’t mean extended warranties are good value for money.

‘The problem is that we don’t replace our appliances very often,’ said Pam. ‘So when we do come to buy something like this new, we’re unsure where we stand if it breaks down.’

Most products – including the Indesit fringe-freezer mentioned above – are covered by a manufacturer’s guarantee covering both parts and labour for the first year.

Even if they break down after 12 months it is still worth bearing in mind that under European law a minimum two-year guarantee should apply to the sale of all consumer goods everywhere in the EU.

So companies trying to sell you the ‘sorry but your guarantee expired yesterday’ line should always be challenged.

Under the Sale of Goods Act, if something is not of ‘satisfactory quality’ you have the right to have it replaced or repaired free.

If the retailer refuses to repair the goods, you may have the right to arrange for someone else to do the work and then claim compensation.

You have six years to take a claim to court for faulty goods, but if you end up in front of a judge, you may have to prove that the fault was present when you bought the item and not the result of normal wear and tear.

The Office of Fair Trading has just launched a survey to determine if long-standing consumer concerns about extended warranties are justified, so watch this space for the results when they are announced.