The Competition and Markets Authority (CMA), as part of routine monitoring, has discovered Argos has breached a legally binding agreement, or undertakings, involving the way the retailer sells extended warranties to customers who purchase domestic electrical products online.
A form of insurance, extended warranties afford consumers increased protection over and above the standard guarantee. An agreement signed by Argos in 2012 requires the company to provide a link to a price comparison website allowing buyers to compare the price of the warranty – something Argos apparently failed to do for a while.
“The CMA found that Argos was not displaying this link,” said the watchdog in a release, “and the company subsequently admitted it had not been doing so for more than a year. In total, Argos’s 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.”
The link has now been reinstated, with Argos agreeing to carry out regular internal checks to avoid further violations of the undertakings.
Commenting, CMA senior director of remedies business and financial analysis Adam Land had this to say: “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.”
The total goodwill payments, meanwhile, equate to e-gift cards worth £570,010.