The latest word on warranties

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Look at those lists of the most admired companies in America and what do you notice about them? Great products, for sure. But many also enjoy stellar reputations for service after the sale. When a buyer is confident you’ll stand by your product, you’ve probably created a customer for life. One measure of that is how you honor your obligations under the Magnuson-Moss Warranty Act. The FTC just made a few changes in that area. Is a warranty check-up warranted for your company?

The Magnuson-Moss Warranty Act has been around since 1975 and the FTC has Rules, Guides, and Interpretations in place. What’s the difference between the three? The Rules require certain disclosures, specify that warranty information must be available to consumers before they buy, and set standards for any informal dispute settlement provisions in a warranty. The Guides help advertisers avoid unfair or deceptive practices. The Interpretations offer the FTC’s views on the terms of the statute itself.

But rules and guides shouldn’t stay on the books “just because.” That’s why the FTC systematically reviews them to make sure they’re still doing the job. We asked for your feedback about how the Warranty Act is working in the real world. Based on what we learned, the FTC announced that for the most part, the Rules and Guides will remain in place in their current form. But the Commission made a few tweaks to the Interpretations you should know about.

First, the revised Interpretations clarify that implied tying is prohibited. Specifically, warranty language that leads a consumer to believe that a warranty is conditioned on the use of specified parts or service violates the law. Second, the Interpretations also clarify that the Warranty Act applies to service contracts if they’re regulated by states as insurance – unless the Warranty Act directly conflicts with the state law. Everything else in the Rules, Guides and Interpretations remains the same.

If you haven’t given much thought to warranties in a while, here’s a recap of what else the FTC has been doing. In 2010, FTC staff issued an advisory opinion about warranties on parts from places other than “authorized” dealers. In 2013, a staff survey revealed that some online retailers were selling electronics and appliances without first disclosing complete warranty information. We sent warning letters to companies reminding them to review their sites to make sure they provide complete information about product warranties before consumers make online purchases, as required by the FTC’s Pre-Sale Availability Rule. A few months ago, we announced a proposed settlement with BMW of North America, charging that its MINI division illegally conditioned warranty coverage on use of its parts and services.  And we just published new information for car owners about auto warranties and routine maintenance.

If your business offers warranties, here are some steps to consider:

  • Read your warranties to see if they prohibit a consumer from using other sellers’ parts or services – or if consumers might read your warranty to imply that.  Conform your policies to the just-announced clarifications to the Warranty Act’s Interpretations.
  • Check your website to make sure your warranties are posted close to the warranted products.
  • Review your warranties and service contracts to ensure all material terms and conditions are disclosed clearly and conspicuously.
  • Read the FTC’s brochure, A Businessperson’s Guide to Federal Warranty Law.
     

Comments

I thought a product that was over a thousand dollars had a implied warranty for after the warranty was up.

HTC Mobile Telephone company warranty breached the USA Federal Trade Law. All problem with the equipment were subject to arbitration and injustice law forbidden the consumer right . I ask that the FTC investigate this improprieties from the Taiwan company on America soil

I purchased a 1 year old, low mileage Chevy Blazer from Apple Chevrolet. The bank that they picked to do the car loan insisted on a long warranty which I was only too happy to pay an additional $1200.00 for with GM. It was a 75,000 mile warranty with GM on a Blazer with 19,000 miles on it. I also qualified for a VIP program with free oil changes, a loaner car etc.

Long story short, every major system broke down and had to be replaced with a fight, driving to different Chevy dealers until I finally started using a local, NYS licensed mechanic who was honest and did excellant work. GM would give him a hard time about approving repairs. He ran a small shop and did not have time to be put on hold for literally hours. Finally the transmission went and GM sent in their regional person and without telling me, they stole my car from the shop and didnt return it for two weeks in the dead of winter. I had no way to get to work and was a single mom with 2 very active daughters, (US Swimmers, Winter Track & Field), food shopping etc. They never gave me a reason but would not fix it. The Blazer had 72,000 miles on it!. I even took it to another licensed shop that just fixed transmissions, clutches and more. They verified that the transmission needed replacing as well as Anthony from Anthony Automotive. It would cost out of pocket, 4,000.00. I could go on and on, regarding disgusting treatment at Apple Chevrolet, they stole the wheel locks off my Blazer and would not give them back, made me pay for my oil changes when I had the VIP program. I will never, ever buy a GM manufactured vehicle again and neither will any member of my family.

Hi,I feel your pain!sense no one posted anything on this subject i will !You are in the right place here!Cause reading all this stuff about warranty work like the Magnusson Moss Act! You can Sue Who ever sold that extended warranty and Win Hands Down With NO Problems!Take Them All to Small Claims Court!

I bought a 2015 rav 4 in new rochelle oct 13th that was dealer certified, had 5,700 miles on it, has spent more time in the shop than me driving it, with starter issues.....its just UNREAL..........has been to the shop 4 times since I got it...and been there for a week at a time.. my local dealership has been great trying to diagnose the problem, so far no luck

I purchased a Ridgid Pressure Washer in May of 2010 along with several other tools. The main selling point was the Lifetime Service Agreement(LSA). I registered all products with Ridgid. I have used the LSA on Drills and Batteries with no problem. Recently my pressure washer started leaking fuel. I contacted Ridgid and they tell me they never offered the LSA on the pressure washer. I sent them copies of the paper work I received when I purchased the pressure washer which shows 3 year warranty(LSA eligable) and copies of emails from Ridgid where they acknowledge the LSA. They agreed to repaired the pressure washer this time, but will not honor the LSA. They said it was a TYPO. Why did I get an email back acknowledging that the LSA would be effective in 10 to 12 weeks and never received anything stating that the LSA was not available. I would have carried the pressure washer back, because I paid a higher price to get the LSA. Companies should not be able to change warranty status after the item has been purchased and registered.

Is there any similar protection for commercial products or services, such as draft beer system installations?

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