Desensitising the consumer
Are we paying through the nose for unnecessary warranties? - desensitising the Consumer
There is an altogether more serious, insidious and completely ignored effect of the trend which has developed in the last 15 years or so of purchasing additional warranties as part of consumer-product packages. Consumer legislation at least since 1979 has imposed a duty upon retailers that the goods which they sell must be of merchantable quality. This requirement has more recently been mainly re-badged so that goods must now be "satisfactory". This has been taken by the courts to mean that a product must work and must remain working for a reasonable period of time. On the basis that the courts are unlikely to expect consumers to re-invest £500 or so every couple of years or even three or four years in a new television or washing machine or what have you or much larger sums in a motorcar, nor have to spend substantial sums on keeping those products working during those first few years of use, it is reasonable to say that most Consumers are already adequately protected by Consumer legislation and certainly well beyond the perceived norm of the "1 year guarantee".
The routine selling pf extended warranties has reduced consumer awareness to a point where purchasers now typically resign themselves to their fate when their fridge freezer breaks down a year and a day after purchase and curse themselves for not having availed themselves of an additional warranty at the time they bought the thing. So insidious and complete is the new culture that even shop staff including managers, and even Head Office Customer Service departments have no knowledge of consumer statutory rights and will in all honesty inform their customers that after a year all of their rights will have expired without the purchase of extra insurance. If one attempts to explain to a shop sales attendant that "I expect the shop to remain responsible for at least two or three years, so no thank you", one is viewed aggressively and with disbelief.
The extended warranty has produced an unmerited benefit of a £500 million per annum market for insurers. It has reduced pressure on manufacturers to maintain the quality of longevity in their products. It has reduced incentives for retailers to insist on the highest standards of production as both of these two parties are freed from the burden of having to bear the cost and inconvenience of providing replacements and repairs.
The victim of course is the consumer who by accident or design has been foisted with a con by a very willing triumvirate of producer, retailer and insurer. The con, of course is not merely an over-priced insurance cover but that the consumer has now been brainwashed into thinking that without such a cover there is no other solution. It is in this way that the extended warranty is an expensive rip-off yet this aspect is never remarked upon by any commentator including The Times and this further demonstrates how complete the new culture of consumer unawareness has become. There needs to be a re-awakening of the Consumer sense of the Consumer Right and the problem that the OFT and the Competition Commission really need to consider is the problem of the selling of duplicate rights.