CONSUMER TIPS
From the Service Contract Industry Council

For Purchasing and Using
Service Contracts (Extended Warranties) for
ELECTRONIC DEVICES, HOME ENTERTAINMENT SYSTEMS AND APPLIANCES

Since 1988, the Service Contract Industry Council (SCIC) has worked with state legislatures nationwide to regulate the licensing of service contract providers and to implement stringent financial safeguards to protect consumers and providers. 

WHEN PURCHASING:

• Most service contracts (extended warranties) are sold face-to-face at the point of sale by the retailer and are administered and serviced by independent, licensed and insured third-party providers.
• Service contracts can be purchased on the spot or days after the product purchase, which gives consumers time to review the terms and research the provider. 
• Consumers should avoid purchasing a service contract if they feel overly pressured by sales personnel.    
• Consumers should not buy a service contract if the provider refuses or cannot supply a copy of the contract terms and conditions <i>prior</i> to purchase.
• Consumers should be alert to and cautious of service contract providers who use unsolicited mass marketing techniques, such as direct mail and telemarketing (e.g., “robo-calls”).
• Many reputable service contract providers offer their products for sale on the Internet and outreach to potential customers via e-mail.  As with any vendor, consumers are urged to research the reliability and soundness of companies with whom they do business (see below).

ONCE PURCHASED:

• Most service contracts (extended warranties) come with a free-look period that gives consumers 30 days from time of purchase to review the details of the contract and receive a complete refund upon cancellation.
• Locate the contract administrator and/or obligor’s name on the contract and research the company with a local state insurance commissioner and/or Better Business Bureau.
• Read the provisions carefully to become familiar with all coverage, exclusions, and terms and conditions.Carefully fulfill all contract obligations, such as proper product handling, maintenance, voltage requirements, etc.
• Keep contract paperwork, original receipt(s), and all maintenance records in a secure, easy-to-access location.
• Use the service contract for even small covered repairs to maximize the function and value of products.
• A list of consumer goods service contract providers who are members of the Service Contract Industry Council (SCIC), a non-profit trade association representing the service contract industry, is available here.

Consumer Protections:
Most service contracts remain valid if a retailer closes for business.  This is due largely to the SCIC’s efforts to regulate the industry on a state-by-state basis with laws mandating licensing and stringent financial responsibility requirements for companies obligated to perform under a service contract. 

Consumer Benefits
Service Contracts can help consumers cut through red tape and save money with pre-qualified service technicians, technical assistance, and/or product replacements for goods including TVs, computers, laptops, cell phones, music systems, appliances, etc.

Service Contracts also provide small business owners and home office professional enhanced protection for their office and capital equipment, including IT service and high-tech support for computers, printers, copiers, networking equipment, telephonics, etc.

About the SCIC
Established in 1989, the Service Contract Industry Council is a national trade association that educates consumers about service contracts and extended warranties, and has developed and promotes model legislation with provisions designed for consumer protection and industry standards.  SCIC members sell approximately 80% of the service contracts sold in the U.S. for consumer goods, home and motor vehicles.