Currys has been told that it must make extended warranty terms clearer to shoppers after the regulator found that its sales practices could be misleading.

Extended warranties offer people the chance to pay for increased protection when buying products, over and above the standard guarantee.

Under a legal order issued by the CMA’s predecessor, the Competition Commission, all electrical retailers selling extended warranties are required to provide accurate information to customers so they can make informed decisions about whether the extra cover is worth buying.

But a mystery shopping exercise at Currys found a quarter of staff tested could not provide accurate information on whether cosmetic damage was covered. For example, they were told products would be replaced if they were damaged but still worked, when this was not the case.

The CMA also found that a fifth of staff were unable to provide shoppers with a quote, which is a legal requirement before selling these kinds of warranties.

The CMA has since been working with Currys to improve the way it sells this type of warranty. The retailer is now making several changes, including introducing extra training for staff; and posters and leaflets around its shops will be clearer in explaining what is and isn’t covered.

Currys will also implement a new monthly mystery shopping programme to make sure its staff abide by the rules.

Adam French, Which? consumer rights expert, said: “This is a welcome move and we look forward to seeing Currys PC World swiftly implementing these changes to ensure customers are armed with the correct information when making a decision about extended warranties.

“We would also urge customers to read the terms and conditions before buying an extended warranty as their right to return, repair or replace an item may already be covered under the Consumer Rights Act.”

What to consider before taking out an extended warranty

• Extended warranties are optional – you don’t have to buy one
• You might be covered already, so check other insurance products such as home contents
• Think about whether you really need protection. Would it be more cost effective to buy a replacement than pay for an extended warranty?
• There might be better options than buying an extended warranty. For example, if you have lots of gadgets, it might cheaper to buy multiple item insurance
• If you want to purchase an extended warranty, you don’t need to decide at the time you buy
• You can shop around. Check comparison sites for the best price and features