Consumer Blog
Extended warranty or extended service contract?
We've all seen those postcards that arrive in the mail saying "YOUR FACTORY WARRANTY IS ABOUT TO EXPIRE!" When AG Nixon sued several of the companies that send those in March, one of the alleged violations was that they were claiming to offer "extended warranties."
And when the AG announced a settlement with one of them in August, one of the conditions was that National Dealers Warranty stop referring to its products as extended warranties, and call them what they are: extended service contracts.
So what's the difference? Under Missouri law, a warranty can only be issued by the manufacturer of a product. These companies are not associated with manufacturers, so they can't possibly offer a warranty.
Same with those "home warranty" companies that you pay to be there for you in case you need appliance repair, plumbing or electrical help, a new furnace, etc. That product should be called an extended service contract.
Technorati Tags: automobiles, extended service contract, shopping and spending, solicitation, extended warranty, moagoconsumer, consumer protection
Posted by on September 12, 2008 6:39 am :: Comments (3) :: Permalink
3 Responses to "Extended warranty or extended service contract?"
says:
September 26, 2008 10:52 am
It is significant, though maybe only a syntactic observation, that there be noted clarification over the word "extended." Typically, a "Service Contract" is not an "extension" of anything. A Service Contract is an agreement between a consumer and the Service Contract provider to, upon payment in full of the contract premium, pay for the cost of repair or replacement of covered mechanical parts or systems that fail. Naturally, this is a very simplified statement of what a Service Contract is, but the point is to note that it is typically a separate and distinct agreement which is uniquely distinguished from the warranty a manufacturer provides. As such, the term "extended" is not applicable, even in the since where the manufacturer itself oftentimes offers a Service Contract of its own. Were that not the case, not only would non-manufacturer Service Contract providers not suggest the purchase of a contract to run concurrent with, (though typically longer than), the manufacturer's warranty, but neither would the manufacturer's Service Contract run concurrent with, (and also typically longer than), the original manufacturer’s warranty.
says:
October 17, 2008 7:49 am
I continue to be billed by National Dealer Warranty service even though I cancelled in writing within the time allowed. I have disputed this charge with my credit card company and NDWS has denied receiving my cancellation letter. I again cancelled by certified mail and NDWS continues to charge my account. This has been going on for nearly 2 months. Can your office help me. Marie Baril
says:
October 17, 2008 9:57 am
To Marie:
You should file a consumer complaint with the Attorney General's Office. Our Consumer Protection Division investigators will work to try to resolve the situation.
