Consumers will receive more information about extended warranties on domestic electrical goods before they buy and greater rights to cancel agreements, Patricia Hewitt has announced.

The reforms are recommended in a Competition Commission report which concludes that the extended warranty market is unfair and uncompetitive.

Patricia Hewitt, trade and industry secretary, said: "Too often consumers are not made aware of the rights they are already entitled to and are pressured into taking out an extended warranty that can be almost as expensive as the product itself.

"Most electrical goods already come with a one-year guarantee. If consumers decide they need an extended warranty, I would advise them to shop around and check they're getting the best value for money.

"I have decided to accept the findings of the Commission and the approach proposed by the majority of the Commission's members for remedying the situation. Consumers will be given more access to information about the warranties and a longer period to cancel if they change their minds.

"I will ask the Office of Fair Trading to review the position in two years time. If they find that competition has not improved sufficiently by then, it might be necessary to take further action."

Forum Response: British Retail Consortium

A spokesman for the British Retail Consortium told ePolitix.com: "The important thing now in light of the report is to ensure that there is sufficient consultation with the industry on practicalities of some remedies to ensure that the viability of the market for a useful product customer's want is not destroyed."

Forum Response: Consumers' Association

Phil Evans, principal policy adviser at the Consumers' Association, said: "In the run up to Christmas many consumers will be buying electrical goods.

"These market reforms will make this the last Christmas of the warranty hard sell. Electrical retailers have the chance to enter into the Christmas spirit and treat customers fairly by implementing the reforms this weekend.

"Consumers' Association want to see retailers advertising the costs of warranties and those costs pinned to the products. Whether electrical retailers want to be Santa or Scrooge on warranty information is up to them; but the proof of the Christmas pudding will be in the eating."