Blitz on stores' 'rip-off' warranties

MINISTERS are poised to launch a clampdown on the sale of 'rip-off' extended warranties by High Street stores.

Consumers who buy new electrical items are encouraged to purchase the policies to 'insure' products. But the policies often cost up to half of the value of the electrical item.

The Competition Commission will today present its recommendations following an extensive investigation into Britain's £800m-a-year extended warranty market. The Department of Trade and Industry is expected to decide before Christmas how to stop the practice.

Shops could be forced to stop pressure-selling the policies. They may also be told to make it clear if items are already covered by the manufacturer's guarantee.

New rules would spell disaster for electrical giants. It is thought that up to 47% of pre-tax profits of firms such as Dixons come from the warranties.