Sales of Service Contracts and Extended Warranties Strong Despite Economy

TALLAHASSEE, Fla., Nov. 12 /PRNewswire/ -- Consumers remain committed to
purchasing service contracts (sometimes referred to as extended warranties),
particularly for electronic products and appliances, according to the Service
Contract Industry Council (www.go-scic.com).

N.E.W. Customer Service Cos recently reported "the percent of people who added
a service contract to their purchase increased by 10 percent this year." The
trend is expected to continue through the holiday buying season and into the
New Year.

"Consumers are seeking to spend wisely, tend to be more risk averse and are
less willing to absorb the cost of an unexpected product repair or
replacement," said SCIC Executive Director Timothy Meenan. "Coupling a
service contract with a purchase helps consumers and gift-recipients keep
products longer and performing well after a limited manufacturers warranty
expires."

Facts:
-- Consumers are expected to spend $1.3 billion on extended warranties
for
electronics and appliances this holiday season. (Source: Warranty
Week)
-- 26% of consumers plan to purchase computers and video games, 13% game
consoles, and 12% home electronics, up 3% from 2008. (Source:
Deloitte)
-- 70% of consumers find service contracts inexpensive compared to repair
costs. (Source: Consumer Reports)

-- In 2008, 42 percent of consumers bought a warranty for their laptop or
desktop computer, an increase from 37 percent in 2007. (Source: IDC)

Consumer Tips

-- Service contracts come with a 30-day, free-look period and can be
purchased with the product or usually within a certain period of time
after product purchase.
-- Read the provisions carefully to become familiar with all coverage and
exclusions.
-- Locate the contract administrator and/or guarantor's name on the
contract and research the company with the State Insurance Commission
and Better Business Bureau.
-- 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.
-- Utilize the service contract for all covered repairs to maximize the
function and value of products.

-- Do not buy a service contract if the sales person refuses to or cannot
supply a copy of the contract terms-and-conditions prior to purchase.

Consumer Protections
Most service contracts remain valid when 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 stringent financial responsibility
requirements for companies obligated to perform under a service contract.

About the SCIC
Established in 1989, The Service Contract Industry Council is a national trade
association that educates consumers about service contracts 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.

SOURCE SCIC

Jane Meehan Lanzillo for SCIC, +1-617-244-0448, jmlanzillo@rcn.com