The Australian Competition and Consumer Commission (ACCC) has accepted an enforceable undertaking from Virginia Surety Company (VSC) after a review of extended warranty sales.

The regulator says certain marketing practices have potential to mislead customers, particularly around the true value of warranties beyond rights and remedies already available.

VSC, which is underwriter for The Warranty Group, has agreed to:

• engage with retailers to revise extended warranty brochures to include additional information
• provide consumer law compliance training to its representatives and retailer staff
• monitor retailers’ extended warranty selling practices and, if necessary, take remedial action to improve those practices. 

VSC is the second underwriter to commit to these steps, following similar measures agreed with Lumley in December last year.

“The ACCC welcomes the approach of VSC and will continue to urge other industry participants to adopt similar measures to improve extended warranty selling practices,” ACCC Commissioner Sarah Court said.

“Misleading representations made by large retailers about extended warranties are a priority enforcement area for the ACCC.

“Where appropriate, the ACCC will take enforcement action to address concerns.”

VSC told insuranceNEWS.com.au it welcomes the ACCC’s focus on the extended warranty industry.

“Over the past nine months VSC has been working closely with the ACCC to set a new industry benchmark for the promotion and supply of warranty plans,” a spokesman said.

“We recognise that more could be done to ensure Australians fully understand the terms and conditions of the warranty plans they purchase.”