Consumers Association steps up war of words with Dixons
Pressure tactics commonly used to sell extended warranties, says pressure group
February 27 2003
The Consumers’ association has linked electricals retailer Dixons to pressure tactics used to sell extended warranties.
The war of words between the UK’s biggest electricals retailer and the consumer campaigning group has escalated ahead of a Competition Commission statement of issues on the practice of selling extended warranties, due on Friday.
Warranties represent a major source of income for electricals retailers, but the CA has campaigned against them, claiming they represent poor value for money.
In a detailed response to a letter from Dixons chief executive John Clare earlier this month, CA director Sheila McKechnie said: “We are a research-based organisation and are far less interested in what companies tell us they do than what we find they do in practice.”
McKechnie defended the CA’s claim that electrical products are generally much more reliable than in the past, based in research among its members. The CA has said this makes extended waranties poor value for money for most consumers.
She added that the association’s shoppers “have reported various pressure tactics and misleading claims being used on a regular basis to try and persuade them to buy extended warranties. On a number of occasions they have used undercover audio recorders during their shopping trips, to enable us to substantiate their experiences.”
With CA shoppers buying from Dixons various store chains several times a week on average, “their experiences are likely to be a reasonably good reflection of the sales techniques used in your stores. Evidence from them and a variety of other sources would indicate that it is certainly not unknown for salespeople in Dixons’ Group stores to use the kind of tactics mentioned,” said McKechnie.
Both the CA and Dixons have provided formal evidence to the Competition Commission inquiry. The statement of issues will give retailers a chance to respond ahead of a full report later this year.
