CMA secures over £500,000 for Argos extended warranty customers

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Argos has agreed to fix the way it sells extended warranties to customers and provide a goodwill gesture to those who may have missed out on a better deal, following action from the CMA.

Extended warranties offer people the chance to pay for increased protection when buying products, over and above any standard guarantee. In 2012, Argos signed a legally binding agreement – or ‘undertakings’ – promising to provide a link to a price comparison website every time it offers an extended warranty for domestic electrical products online, so that customers can compare the price of the warranty.

As part of routine monitoring, the CMA found that Argos was not displaying this link and the company subsequently admitted it had not been doing so for more than a year. In total, Argos’ breach affected sales of over 400,000 extended warranties and 114,000 of those customers may have found a cheaper deal through the price comparison website, had they been prompted to shop around.

Argos will now contact all customers who may have missed out on a lower price and make them aware of the error. These people will have the option to cancel their Argos extended warranty and all will receive a goodwill gesture, amounting to over £500,000 in total. Argos has also reinstated the link to the website and agreed to carry out regular internal checks to avoid breaching the undertakings again.

Adam Land, CMA Senior Director of Remedies Business and Financial Analysis, said: “We welcome Argos’ promise to provide a goodwill gesture of over half a million pounds to customers who may have missed out on a cheaper extended warranty deal, after it failed to remind shoppers of their options.

“It’s only right that Argos is now taking steps to fix its error and make sure that something similar doesn’t happen in the future. Any breaches of this kind must be put right immediately, or we will take action.”

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