The Office of Fair Trading is preparing to reveal the finding of a lengthy investigation into the extended warranties market.
The warranties differ from ordinary contents insurance as they protect against electrical items breaking down rather than being stolen or damaged. The OFT has been examining whether tougher rules introduced in 2005 have been followed.
The Daily Mail and Which carried out their own investigations into whether people who bought such policies actually made a claim. Poor value deals included a Dixons warranty for a plasma TV where the warranty cost the equivalent of 35% of the purchase price, but the TV had only a 6% chance of breaking down during the cover period. Even policies for a less reliable product, such as a fridge-freezer with a 20% chance of a break-down proved expensive, with Dixons charging nearly 60% of the purchase price for the warranty.
Financial experts warned consumers to explore other options such as setting money aside in a rainy day fund, and checking their legal rights which may entitle them to repair for goods even outside of the manufacturer's warranty period.
