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FOR IMMEDIATE RELEASE |
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State
Rep. Tim Mahoney |
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Mahoney to reintroduce bill to simplify service contracts for consumers
HARRISBURG, Jan.15 – State Rep. Tim Mahoney, D-Fayette, will again introduce legislation that would provide consumers who are buying service contracts a plain-language explanation of the contract they are signing.
Mahoney said that under his proposal, all service contracts offered to consumers would have to include a simple explanation, or disclaimer, of what is in the contract directly above the signature line and in 14-point, boldface type. The legislation would cover service agreements with retailers and other businesses that sell, service, repair or replace consumer goods.
Mahoney said many retailers offer so-called extended warranties, which are, in reality, service contracts since they do not extend the original warranty but offer future repair service for an additional, up-front fee. The Fayette County legislator said current federal law defines a warranty as a repair or replacement guarantee that accompanies a purchased product at no additional cost.
He said these service contracts are offered to consumers as a way to ease worries over making an expensive purchase.
"When residents are making big-ticket purchases, they need to understand the details of any contracts they are signing," Mahoney said. "My proposed bill would give people a better understanding of these service contracts because the language in them can sometimes be confusing to try and figure out."
Mahoney's legislation would also require the Web site address of the Federal Trade Commission, www.ftc.gov, to be listed on the disclaimer line of service contracts. The Web site provides information on various factors consumers should consider when entering into a service contract.
Pennsylvania law currently provides limited protection for consumers who purchase service contracts.
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