The OFT has today launched a short market study into extended warranties for domestic electrical goods such as televisions, washing machines and computers.

The study will focus on whether competition for warranties is sufficiently effective to ensure consumers get value for money in a market worth well over £750million.

Today's announcement follows an OFT review of aftermarkets for domestic electrical goods which was launched in November 2010. During this review, some parties raised credible concerns that competition is limited by retailers' advantage in being able to sell warranties at the same time as they sell domestic electrical goods. There were also more general concerns that warranties are not good value for money.

This is consistent with an OFT evaluation in 2008 which showed that the Supply of Extended Warranties on Domestic Electrical Goods Order 2005, introduced to improve competition, was by that time only addressing around £19million per year of an estimated annual consumer detriment of £366million.
At the same time, the OFT has decided against launching a market study into repairs of domestic electrical goods. This is because it did not receive sufficient evidence to support initial concerns that manufacturers may be restricting competition for repairs by.......Read more HERE