You did your homework, researching the market before buying a refrigerator, VCR or personal computer. But, just when you thought all the decisions were made, a salesperson asks if you want to purchase a service contract or extended warranty.
This consumer guide provides information about what service contracts are, types of coverage available, what you should know before you buy a service contract, and what to do if you have a problem.
The Bureau of Electronic and Appliance Repair regulates service contractors who sell service contracts for the repair of consumer electronic equipment and appliances in California.
Service contracts, sometimes called extended warranties or maintenance agreements, are bought separately from the product. Similar to insurance policies, these contracts assure consumers that should something go wrong with a product, their investment is protected at a fraction of the cost of out-of-pocket repair work. Initially, service contracts were offered and sold by the manufacturer of the product, or by the retailer who sold the product. But, due to the complexity of administering an extended service plan, a growing number of retailers and manufacturers are turning to third-party firms to handle the programs. These firms are paid by retailers and manufacturers to handle the day-to-day responsibilities of managing service contracts and providing assistance to the consumer.
These plans begin on the date the customer purchases the product and its extended warranty from the retailer.
Extension plans extend the manufacturer's warranty for a specified period, usually 90 days to up to one year.
Also known as "primary protection" plans, these programs insure only the product's major component, such as the picture tube in a television, and generally do not include labor costs.
Comprehensive programs or plans cover all parts and labor for a specified period of time, such as one, three or five years.
Oriented toward products selling for under $100 retail, replacement programs guarantee product replacement if the item should fail during the term of the plan.
Under deductible programs, the consumer is responsible for a certain amount of money, such as the first $50 in repairs. Once repairs exceed that amount, the coverage becomes effective.
The Department of Consumer Affairs, through the Bureau of Electronic and Appliance Repair, regulates service contractors who sell service contracts for the repair of consumer electronics and appliances in California. The Department can fine violators or revoke or suspend their registration. The law further protects consumers by requiring that service contractors provide the service guaranteed in the service contract. An additional protection for consumers requires that service contractors provide financial backing for the service contracts issued. If you have a problem with a service contract you have bought, try to resolve it with the contract seller or administrator, or the company performing the repairs. If you cannot resolve the problem, call the Department's Consumer Information Center toll-free at 1-800-952-5210.
The Bureau of Electronic and Appliance Repair also registers and regulates electronic and appliance repair dealers. If you would like more information about the Bureau, write or call: Department of Consumer Affairs
Bureau of Electronic and Appliance Repair
4244 S. Market Court, Suite D
Sacramento, CA 95834
916-999-2041
