The contracts issued by Warranty Administration Services are used by about 300 UK car dealers.

Following a complaint to Shropshire Trading Standards, the OFT found that some of the warranty terms were potentially unfair and were part of a long and complex contract, which could have confused consumers about their rights.

In response Warranty Administration Services has agreed to key alterations to its terms and conditions.

Terms which ruled out the possibility of a refund in all circumstances and allowed the dealer to cancel the agreement without having to give a reason have been dropped.