Extended warranty?

Vladimir Platonow
Reporter from Agência Brasil

Rio de Janeiro – Extended warranties on products purchased by consumers have become increasingly common. At the time of purchase, many sellers offer this service, which extends protection beyond the one-year period legally provided by manufacturers. However, this strategy, created to benefit the customer, can end up causing difficulties when the product malfunctions.

Furthermore, in many cases, the sale of extended warranties is done in a disguised manner, without the consumer understanding that they are buying the service. This warning comes from the Municipal Secretary for Consumer Protection and coordinator of Procon Carioca, Solange Amaral.

"The consumer doesn't really know what it is. They buy a blender and buy something else [along with it], which constitutes a tied sale. They're offered insurance, which is no longer from the manufacturer or the store. It's a third party involved, an insurance company. And the consumer isn't clear about what they're paying for and what rights they have under this policy. The salesperson kind of suggests, pushes, forces the purchase of the extended warranty," explained Solange.

The legal director of the state Procon (consumer protection agency), Marcelo Moura, also warned about consumers' lack of knowledge regarding the conditions under which the benefits are offered. "In many situations, it includes restrictions, costs, and conditions for use that are not worthwhile. Most of the time, this is not explicitly stated at the time of contracting. As a rule, there are situations that are not advantageous. Generally speaking, it is not a beneficial product for the consumer," he warned.

With the aim of clarifying the situation for consumers and proposing changes to the extended warranty insurance market, the Superintendence of Private Insurance (Susep) and the National Consumer Secretariat (Senacon) published a joint decree in the Official Gazette on the 7th, expanding and altering the composition of a working group that must present suggestions on the matter within the next 20 days.

Also participating in the group are representatives from the Ministry of Development, Industry and Foreign Trade and the Ministry of Finance, as well as representatives from the National Confederation of General Insurance, Private Pension and Life Insurance, Supplementary Health and Capitalization Companies (Cnseg) and the Institute for Retail Development.