The Supply of Extended Warranties on Domestic Electrical Goods Order 2005
| Jurisdiction | UK Non-devolved |
| Citation | SI 2005/37 |
| Year | 2005 |
2005 No. 37
COMPETITION
The Supply of Extended Warranties on Domestic Electrical Goods Order 2005
Made 11th January 2005
Laid before Parliament 12th January 2005
Coming into force 6th April 2005
Whereas the Director General of Fair Trading1, in exercise of the power conferred on him by sections 47(1), 49(1) and 50(1) of the Fair Trading Act 19732(“the Act”), made a monopoly reference on 2 July 2002 and, in response to the reference, the Competition Commission made a report entitled: “A report on the supply of extended warranties on domestic electrical goods within the UK”3(“the Competition Commission Report”);
Whereas the Secretary of State, in accordance with section 91(2) of the Act4, published a notice on 18th November 2004 stating her intention to make this Order, indicating the nature of the provisions to be embodied in it and stating that any person whose interests were likely to be affected by it and who was desirous of making representations in respect of it should do so in writing before 20th December 2004;
And whereas the Secretary of State has considered the representations received;
Now, therefore, the Secretary of State, being the appropriate Minister under section 56 of the Act, in exercise of the powers conferred on her by sections 56(2) and 90(2) and (7) of, and paragraphs 1, 9 and 12A of Schedule 8 to, the Act5, and for the purpose of remedying or preventing the adverse effects specified in the Competition Commission Report, hereby makes the following Order:
Citation commencement and interpretation
1.—(1) This Order may be cited as the Supply of Extended Warranties on Domestic Electrical Goods Order 2005.
(2) This Order shall come into force on 6th April 2005.
(3) In this Order—
“domestic electrical good” means a product designed to be connected to an electricity supply or powered by batteries and used for domestic purposes, but does not include watches, jewellery or fixed installations (other than integrated appliances);
“domestic electrical good cover” means cover which at least provides cover against the cost of repairing or replacing a domestic electrical good in the event of a breakdown and which may also provide additional cover against eventualities such as accidental damage, loss or theft and assistance in setting up and operating a domestic electrical good;
“extended warranty” means a contract for domestic electrical good cover entered into by a consumer for monetary consideration;
“further relevant information” means information indicating in general terms—
(a) the relevant statutory rights of a consumer relating to the purchase of a domestic electrical good and where further information may be obtained in relation to such rights,
(b) that extended warranties may be available from other persons,
(c) that household insurance may be relevant to the purchase of a domestic electrical good,
(d) that an extended warranty does not have to be purchased at the same time as a domestic electrical good,
(e) any cancellation and termination rights pursuant to article 8,
(f) the nature of the financial protection provided to a consumer who purchases an extended warranty offered by the supplier in the event of the provider going out of business, and
(g) whether or not an extended warranty offered by the supplier will be terminated in the event of a claim being made;
“offer” includes an invitation to treat;
“provider” means the person who enters into a contract with a consumer for the provision of an extended warranty;
“supplier” means a person who offers to supply a consumer with an extended warranty, either directly or on behalf of a third party, at the same time as offering to supply a consumer with a domestic electrical good (to which that extended warranty relates) or immediately subsequent to the sale of a domestic electrical good (to which that extended warranty relates); and
“Tax” means Value Added Tax or Insurance Premium Tax.
(4) For the purposes of articles 3 to 6, the price and duration of an extended warranty that is applicable to a range of domestic electrical goods shall be treated as displayed, advertised or published in close proximity to that range if the price and duration may be seen when looking at any of the domestic electrical goods in that range.
Scope of Order
2. Article 8 (cancellation and termination rights) shall not apply to the supply of extended warranties that are distance contracts to which the Directive 2002/65/ECof the European Parliament and of the Council concerning the distance marketing of consumer financial services6applies.
Obligation to display the price of an extended warranty, provide further relevant information and provide a written quotation: in store
3.—(1) Whenever a supplier displays the price of a domestic electrical good in store, the supplier shall—
(a)
(a) subject to paragraph (2), display the price and duration of one applicable extended warranty adjacent to the price of the relevant domestic electrical good or, where the price and duration of that applicable extended warranty apply to a range of domestic electrical goods, in close proximity to that range, in a manner that—
(i) is clear and legible; and
(ii) makes clear that the purchase of an extended warranty is optional;
(b)
(b) ensure that leaflets providing further relevant information are prominently displayed in a manner that ensures, so far as is reasonably possible, that they are likely to come to the attention of consumers, and that such leaflets are freely available to consumers;
(c)
(c) subject to paragraph (3), provide a written quotation for an extended warranty in accordance with paragraph (4)—
(i) upon request by a consumer if the request is made at the same time or immediately subsequent to the sale of the domestic electrical good to which the extended warranty relates; and
(ii) in any case before a consumer purchases an extended warranty if that purchase is made at the same time or immediately subsequent to the sale of the domestic electrical good to which the extended warranty relates.
(2) Paragraph (1)(a) shall not apply where the price of the domestic electrical good is displayed on—
(a)
(a) a device used for ascertaining whether a domestic electrical good is in stock; or
(b)
(b) an automated self-service machine used for purchasing a domestic electrical good.
(3) Paragraph (1)(c) shall not apply where—
(a)
(a) the price of an extended warranty is £20 (inclusive of Tax) or less; or
(b)
(b) the extended warranty is purchased through an automated self-service machine.
(4) The written quotation referred to in paragraph (1)(c) shall prominently state—
(a)
(a) the price and duration of the extended warranty and the domestic electrical good to which it relates;
(b)
(b) that the extended warranty can be purchased at the price quoted in the written quotation for a period of 30 days (or more if that is the case) beginning with the day on which the written quotation is issued;
(c)
(c) that extended warranties may be available from other persons;
(d)
(d) that the extended warranty does not have to be purchased at the same time as the domestic electrical good to which it relates;
(e)
(e) the consumer’s...
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