Consumers stand to lose a total of £50m in the run up to Christmas if they buy extended warranties from electrical retailers, according to Warranty Direct.

The insurer claimed consumers pay on average 38% more for a policy over the counter. The company is now urging consumers to 'shop around' to avoid being ripped off by miss-selling.

Managing director of Warranty Direct Duncan McClure-Fisher, said: "Extended Warranties need to be demystified. People need to realise there is absolutely no need to rush into buying a policy there and then."

The news comes at the busiest time of the year for warranty sales, with a quarter of all electrical products sold during November and December. The research shows that only 1 in 8 people are aware they have can buy a policy after the point of sale.

McClure-Fisher added: "Every product comes with at least 12 months cover from the manufacturer, so in reality you only need to worry about extending protection the following year."

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