Action before reference
The OFT carried out a market study into the extended warranties on domestic electrical goods.
Reasons for reference
Date of reference: 2 July 2002.
The OFT has referred the market for the supply of extended warranties on domestic electrical goods to the Competition Commission (CC) for investigation. The OFT found that competition in the market did not appear to be working effectively and that consumers were not adequately informed or protected. Extended warranties typically can add around 50 per cent to the cost of an electrical good. Most extended warranties are sold by the large multiple electrical retailers.
The Competition Commission had 12 months to report to the Secretary of State on:
- whether, and in whose favour, a ‘monopoly situation’ exists in the sector
- whether that situation is being exploited or maintained
- whether any facts found during the investigation operate, or may be expected to operate, against the public interest and, if so,
- any remedies which it considers would address these detriments.
- Press release OFT orders investigation into extended warranties 2 July 2002
- Press release OFT advising shoppers to think before taking out extended warranties 22 October 2002
- Warranties advice (pdf 153kb) 30 October 2003
Information on the Competition Commission’s market investigation can be found on The National Archives website.
Consumers can compare the cost of extended warranties on the Compare Extended Warranties website.