Dixons Store Group has taken a battering from the Advertising Standards Authority after using scare tactics to get customers to sign up for an extended warranty.
The company, which has been warned about over-zealous warranty sales techniques in the past, embarked on a rolling direct mail campaign from its Mastercare subsidiary to customers whose cover was about to expire.
The text stated: “Repair costs can be very expensive – a replacement compressor could cost you £194”. On the right-hand side of the mailing, a text box stated “Warning: If your fridge/freezer breaks down after the warranty expires, you could face major repair bills, such as £194 for a replacement compressor… or even the full cost of a new fridge/freezer, if yours is beyond repair!”.
But one recipient challenged whether the mailing exaggerated the likely repair costs and was misleading. Responding to ASA enquiries, Dixons said it had obtained a quote from a large independent white-goods work provider for £247.03, which was higher than the cost indicated in the mailing and it considered the example was therefore “conservative”.
However, the ASA noted Dixons had obtained only one quote and it did not reflect the repair cost stated in the direct mailing. Concluding that it was misleading, the watchdog ruled the mailing must not appear again in its current form and told Dixons to ensure sufficient care was taken when estimating repair costs in future.
