THOUSANDS of Scots have been left with warranties for electrical goods that are not worth the paper they are written on.
The collapse of electrical goods firm PowerHouse also hit PowerPlan which sold repair service contracts to ScottishPower customers, among others.
And PowerHouse customers who paid for goods and were waiting for them to be delivered have also been left out of pocket.
This is the latest in a long line of crashes that have left hundreds of thousands of customers without protection against big repair bills.
PowerPlan was set up to provide service agreements to customers buying electrical goods, such as washing machines, tumble dryers and dishwashers.
Its retail arm was sold to PowerHouse, Britain’s third biggest electrical chain, three years ago. PowerHouse went bust last month, closing 93 of its 223 stores.
Although the company was bought by New Zealand electrical firm Pacific Retail Group, the new owner has not taken over PowerHouse’s liabilities. Its Extracare and Easycare warranties ceased to exist when it went into receivership.
PRG intends to keep the PowerHouse brand, but it has no obligations to existing customers – either those who have not received goods they paid for or those who are left with worthless warranties. The MacDonald Partnership, liquidators of PowerHouse, said the collapse of PowerPlan was a direct result of the collapse of the electrical retailer.
A spokesman for MacDonald’s said the position on warranties was unclear, but hoped a rescue deal could be set up.
Doug MacDonald, director of the MacDonald’s Partnership, said: “This is a complex case, but we believe we may have initial workable solutions for PowerPlan’s customers.”
Consumer regulatory groups and the Office of Fair Trading have criticised warranties for being unnecessary, expensive and poor value for money.
The OFT revealed the average washing machine repair cost between £45 and £65, yet a five-year warranty cost £150 to £300.
Shoppers spend £800million a year on extended warranties and this is expected to hit £1billion by 2006.
But when companies such as electrical retailers Tempo and PC manufacturers Tiny went bust, hundreds of thousands of people were left without protection. THOUSANDS of Scots have been left with warranties for electrical goods that are not worth the paper they are written on.
>From The Glasgow Evening Times