Exposed: the 'brutal rip-off' behind hi-tech goods cover
Published 23/02/2012 | 05:00
ADDITIONAL warranties for goods sold by major electrical retailers can add up to 40pc to the purchase price -- but promised benefits may not materialise, an Irish Independent investigation has found.
The warranties are insurance policies for repair or replacement cover on products, and sometimes also cover accidental damage or theft.
However, the Consumers' Association of Ireland (CAI) is warning that some warranties could be a "brutal rip-off".
And the Irish Independent found one leading retailer provided highly misleading information about warranties in-store last week.
On investigating extended warranties at PC World, the Irish Independent was told that a €149 policy to insure an iPad2 worth €487 against damage and breakdown for two years also covered theft in the first year.
However, this turned out not to be the case, as we later established PC World does not offer theft cover on iPads.
Another PC World sales assistant also quoted €139 for a three-year insurance "Coverplan" for a Samsung TV priced at €569.99 and that this would cover theft. However, theft is only covered by their "Premier Coverplan" policy, that would cost €179 for three years or €239 for five.
A printed breakdown of insurance terms and costs wasn't available in-store at PC World when requested, nor was it available on the company website.
That meant we only got the full terms and conditions from DSG Ireland, the Irish subsidiary of Dixons that owns PC World and Currys.
DSG Ireland managing director Declan Ronayne later said the company would ensure correct information was given out regarding theft cover in future.
Mr Ronayne said PC World and Currys here would "take a similar approach to the UK" in terms of improving the information about extended warranties.
The UK's Office of Fair Trading (OFT) this month secured legal commitments from Dixons, Currys, Argos and Comet to improve the way they sell extended warranties in Britain.
Last night, CAI chief Dermott Jewell advised consumers to carefully check whether they needed the additional cover.
"Many problems will be covered by the manufacturer's warranty anyway, and we've heard complaints of people not getting the extra benefits when they need them," he said.
"Staff often sell these on commission at the counter when you've no time to consider if you really need them, and the information provided can be extremely lacking, yet with a huge price tag."
Both PC World and Argos said they did not pay staff commission for selling warranties.
Argos said it would support any initiative by the Government to investigate the warranties market in Ireland.
Prices and information about Argos replacement product warranties are available in their catalogue, with more details available on leaflets in-store. The Financial Services Ombudsman's Bureau said it had received around 40 complaints about insurance on computers since 2007, but these were against the insurer rather than the retailer. About half of these cases were settled.
The National Consumer Agency said it had received 157 calls about warranties and guarantees in the past six months, relating to kitchen appliances, laptops, TVs, DVD players and other items.
A spokesman said: "We welcome the decision by some retailers to improve their warranty information and in general we would urge all retailers to ensure that information relating to warranties and guarantees is clear, transparent and readily available."