retail fin retail finance nance Win Wa W the


they have been accused of being part contributor to ‘Rip-Off Britain’, which sired a Competition Commission enquiry. T r The results showed that warranties didwarranties did represent value to customers but w potentially being mis-sold, leading to a swathe of new regulations around the selling of war


being the brunt of consumer media attacks. Over the years ave been accusedofbeing part tributorto p-Off Br


arranties are no str bi th


being thebrun media attacks


ties aren at


‘Ri


aCom etip tionC mmisso he esults wed thatsho


ri


ntof c nsumer er the y


er to ye


wh sionenquiry


hichsir y.


esent value to customers but were potentially being mis-sold, leading to a swathe of new regulations around the selling of warranties. But while the Competition Commission findings, new regulations andwregulations and subsequent Office of Fair Trading (OFT) reports have consistently given warranties a generallyarranties a generally clean bill of health, the consumer media is still attacking the sec or on a regular basis


. But while the


ommission findings, new subsequent Office of F


e consistently i en wavg


clean bill of health, the consumer media is still attacking the sector on a regular basis. Last month sawthe BBC V ser


Last month saw the BBC TV series Watchdog highlight minor mis-selling practices in a number of C


chdog


highlight minor mis-selling practices in a number of Currys stores, and October’s issue of consumer magazine Which? includes a report entitled ‘The Great Extended Warranties Rip-Off’. In the article, Which? asks if readers are ide by high street st


ys st , and O Which and suggests yy


entitled he Great Ex ended being taken raroffo


y you sho


against the chance ou wiy problem that the war


ant s issue of


h? includes a r ranties R


n the ar ticle Which? asks if readers ar ‘being taken for a ride by high street stores’ and suggests ‘why you shouldn’t pay over the odds for ‘peace of mind’’, claiming that ‘the cost of ex ended war


odds ffo peace of mind , claiming that the cost of extended warranties often doesn’t stack up against the chance you will actually have a problem that the warranty can fix’. That is arguably at odds with what


ouldn’t payotpay over the ften doesn’t stack up


ll actually ha e a y can fix


That is arguably at odds with what consumers believ , as the r


ar


Add in those with longer term warranties,, or rolling service contrac , and the numbers of UK customers that ha e bought, and indeed value, warranties is v


o state that 12.5m people in the UK ha purchased a warranty or care plan on an electrical item in the past three years. er t mwar


trical item in the past three y dd in those with longe


Around £1bn is spent on electrical goods warrranties in the UK every year,, so there is an enormous disconnect between the perception of the consumer media and the r of the consumer media and the reality.


olling service contracts, and the numbers of UK customers that have bought, and indeed value, warranties is very large indeed. Around £1bn is spent on electr anties in the UK ev mous disconnect bet


y large indeed y y


so there is an 26 | www w..innov ova ivvativeelectricalre veele ic calretailing..co.ukco..u or


Octobers issue of Which? includes an investigation into extendedwarrra


ctober’’s s iss sue ofWhich? Wh


includes an investigation into extended warranties


October2013 October 2013


consumers believe, as the report goes on to state that 12.5m people in the UK have chased a warr y or ca t


eC rading (OFT)r) r warranties Warranties ha ties av


fire from consumer media - but eadersandWatchdo wholepicture?


e fromc nsumer media - bu areWhichWhich? read vie


s getting the wh nostranger


ge to ar Chriistmas sales vin Gillth


e have come under mor s andWatchdog


lan, the managing diridi or off ite up to 40% of its


viewers getting the whole picture? Pre-Christmas sales


Kevin Gillan, the managing director of warranty provider Squaretrade, notes that the compan


mobile d


ranty provider Squaretrade, notes that the company will write up to 40% of its annual warranty business over the busy pre- istmas period - and that this year will be d one ffo devices.


annual warranty business over the busy pr Christmas period - and that this year will be a record one for warranties on tablets and mobile devices


or warranties on tablets and


ith children w being encouraged -no even required - to bring tablets into school there is a great need for warranty product that effectively covers these expensive


- t fo or warran pryt oduc ely covers these expensiv


“With children now being encouraged - or even required o bring tablets into school, there is a g that eff c


or


indowon ar


ndowon rr n


es ha ecomeuneundermore dog


w on


products, not only against failure, but also in case of dr


, knocks and damage he says I w mnot convinced Wthe Which? ar . ould elik e


products not only against failur , but also in case of drops, knocks and damage,” he says. “I’m not convinced the Which? article understands these concerrns and I would lik o see Which? going into a lot more detail in these r


transpar


of g eat war f the war


y on the subject, as ther y pr


ts out ther


o consumers in the run-up to Christmas Squaretrade will be offering a product through Huddle, encompassing two years’ accidental damage cover on tablets fofor £30.


understands these concerns and I would like to see Which? going into a lot more detail in these reports. I would like to see a lot more transparency on the subject, as there arre a lot of great warranty products out there.” Of the warranty deals likely to be on offer to consumers in the run-up to Christmas, Squar


y deals likely tobeonoff ffe ing a pr


t thr


Huddle, encompassing t o y damage cover on tablets for £30. The company is also embar tising initiatives that higg


atr


The company is also embarking on a raft of advertising initiatives that highlight the benefits of cover on these devices, including showing ts dropped and chewed b y pets The


ft tof ghlight the benefits


of cover on these de vices, including showing products dropped and chewed by pets. The move highlights the huge growth in warranty ts ffo


“Smartphones and tablets are not cheap and under a lot of risk, particularly when in the hands of children outside of the home,” he ents are looking ffo


move highlights the huge g owth in warrant products for smart devices - a trend that Kevin Gillan sees continuing, as tablets becomeGillan sees continuing, as tablets become ubiquitous inside and outside of the home. “Smartphones and tablets ar


the hands of children outside of the home says. “Parents are looking for a cost-effective way of ensuring that if the worst happens, then these devices will be fixed, replaced or , r that they will get their money back quickly and I w


ubiquitous inside and outs and under a lot of ri , parsk ys


or a cost


that they will get their mone y back quickly and efficiently. I would like to see Which? better understand these concerns and the warranty products available to addrress them.” The Which? report concentrates on thecentrates on the value of traditional warranties on TVs and major domestic appliances. It suggests that e ‘fairly reliable and op a fault you


then these devices will be fix efficiently. ould like o st a


understand these concer ts vailable o addrt t conc


The Which? r


value of traditional warran major domestic appliances such electr


even when they do develop a fault you’re often covered elsewhere ‘.


such electr ical goods ar ‘fair even when they do develo ften cov ed elsewher


nties on e . I f


s and eliable and see Which? bett


ns and the warrant ess them.


ffe ing that if the w orst happens


or smartdevices - end that K side of the home rticular


ffe


to see a lot mor ea e a lot


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