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Public Affairs

P.O. Box 1989
West Palm Beach, FL 33402-1989
(561) 355-2754
FAX: (561) 355-3819
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Palm Beach County
Board of County

Mary Lou Berger

Hal R. Valeche
Vice Mayor

Paulette Burdick

Shelley Vana

Steven L. Abrams

Melissa McKinlay

Priscilla A. Taylor

County Administrator

Verdenia C. Baker

"An equal opportunity
Affirmative Action Employer"

Electronic Press Release

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Extended Warranties Warrant Caution

In today’s difficult economy, some retailers are filing bankruptcy under Chapter 11. This allows time to acquire financing, pay off creditors, reduce debt, and make other changes to avoid going out of business. If you buy any products during this limbo period, be wary. Stores in financial difficulty are not required to reveal an impending bankruptcy, and they can still sell extended warranties on their products, even though they may not be around to back it.

Extended warranties are offered on home electronics, computers, appliances, used automobiles and other products that can be expensive to repair. But the term “extended warranty” itself is a misnomer. An extended warranty is really a service contract. If the replacement/repair coverage comes free with the product, then it is a warranty. If you pay extra for it, it is a service contract.

Here are some things to keep in mind when considering purchasing a service contract:

  • Some consumer agencies recommend against buying service contracts because the manufacturer’s warranty is usually sufficient. Manufacturer warranties are typically good for 90 days up to several years, depending on the item.
  • A store’s service contract often overlaps the manufacturer’s warranty. For example, if you purchase a three-year service contract, but the warranty covers the first year, you are only gaining two more years of coverage. Consider buying a service contract at the end of the manufacturer’s warranty period.
  • Many sales people earn high commissions on service contracts, and high-pressure tactics are often used.
  • The service company may be different from the retailer selling the warranty. Ask who will actually repair/replace your item and any related costs, such as shipping. Read any printed information available from the store and do some Internet research.
  • While it is usually possible to cancel a warranty, there often are numerous steps to getting your money back. A refund may be full or prorated, and there may be a cancellation fee. If the warranty cost was included in your financing, refunds may be applied to the loan.

To learn more about extended warranties and service contracts, call Consumer Affairs at 561-712-6600 for a company report or get it online at:

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