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When you buy a new refrigerator or VCR, your first decision is which kind to buy. Your second is whether to pay extra for the service contract the salesperson is likely to be pushing.

There are plenty of reasons to resist.About 80 percent of service contracts go unused. They often duplicate the manufacturer's warranty. And if the company goes out of business, your contract may be worthless.

Now you can add another shortcoming to the list: Sometimes the service contract itself breaks down.

Marjorie and Harold Eller of Burlington, Ind., purchased a refrigerator from Sears in 1990 and paid an additional $150 for a maintenance agreement. When the refrigerator stopped working three years later, they called Sears for service and were told they'd have to wait at least a week for repairs, and maybe longer.

After hounding Sears for two days, "I finally had to call someone local and pay for the repairs myself," Marjorie says.

Sears would not give her a refund.

Larry Taylor, a former Sears employee who supervised a maintenance-agreement telemarketing department in Kokomo, Ind., says that after Sears centralized its service-dispatch operations in 1989, it took customers weeks, sometimes as long as six months, to get repairs that once had taken only a few days.

Indiana's attorney general has begun an investigation of Taylor's claims. Taylor also alleges that commissioned salespeople sometimes charged maintenance agreements to customers who did not want them. Dave Neuhauser of Kokomo says that after he bought a refrigerator in 1991, he found a $106 charge on his bill for a maintenance agreement he had never ordered.

Sears spokesman Bob McHenry says the complaints are sour grapes. He denies any systemic breakdown or wrongdoing and says that Sears established a central customer hotline in 1995 to deal with such problems.

But Sears and other retailers have faced related complaints before. In 1994 Macy's, Montgomery Ward and Sears all settled complaints with the FTC that they had not informed consumers about manufacturers' warranties before selling them service contracts.

In addition, the FTC issued a complaint against Montgomery Ward in 1988 for allowing salespeople to claim that appliances needed routine maintenance to function properly and that Ward's contracts covered such maintenance. In a settlement, the retailer agreed to stop making those claims.

Your best bet: Tune out the hard sell about peace of mind. A service contract just may give you more things to worry about.