Warranty warnings: Don’t interfere with consumers’ right to repair

The Nixing the Fix Report to Congress, the Commission Policy Statement on Repair Restrictions Imposed by Manufacturers and Sellers, and law enforcement actions against companies charged with illegally restricting customers’ right to repair should make the FTC’s position on the subject clear: Consumers deserve choices when it comes to repairing their products, and independent dealers and repair shops should have a fair chance to compete for their business. FTC staff just sent warning letters to eight companies, raising concerns about whether their practices are hindering consumers’ right to repair their products and reminding them of their obligations under the Magnuson-Moss Warranty Act and the FTC Act. Is it time for a Magnuson-Moss compliance check at your company?

Under the Magnuson-Moss Warranty Act, companies that offer warranties for consumer products that cost more than $5 can’t condition their warranties on a consumer’s use of any article or service – for example, a repair service – identified by brand, trade, or corporate name, unless: 1) the warranty states the article or service will be provided to the consumer for free, or 2) the warrantor has been granted a waiver by the FTC. In addition, it’s a deceptive practice under the FTC Act for a company to create the misleading impression that a consumer will void their warranty by using unauthorized parts or service.

Letters to air purifier sellers aeris Health, Blueair, Medify Air, and Oransi and treadmill company InMovement raise staff concerns about the companies’ statements that consumers must use specified parts or service providers to keep their warranties valid.

Letters to ASRock, Zotac, and G.B.T. – companies that sell gaming PCs, graphics chips, motherboards, and other accessories – warn about their use of stickers that say “warranty void if removed” in locations that hinder consumers’ ability to perform routine maintenance and repairs on their products.

In the letters, FTC staff urges the companies to review their warranties in light of the Magnuson-Moss Act and the FTC Act and, if necessary, revise their practices accordingly. Staff will take another look at their written warranty and promotional materials in 30 days.

What should other businesses take from this action?

Conduct a warranty assessment at your company. If it’s been a while since you’ve reviewed your warranties, now would be a good time to make sure you’re complying with the law. Remember that the FTC evaluates your statements from the perspective of reasonable consumers. As a result, consider what you convey to consumers expressly and by implication.

If you can establish that the particular article or service is necessary to make the product function properly, follow the procedure in the law. The Magnuson-Moss Act gives companies the right to seek a waiver from the FTC. Here’s what Section 2302(c) of the law says: “[T]he prohibition of this subsection may be waived by the Commission if: (1) the warrantor satisfies the Commission that the warranted product will function properly only if the article or service so identified is used in connection with the warranted product, and (2) the Commission finds that such a waiver is in the public interest.” Of course, savvy companies seek a waiver before the FTC raises concerns about their warranty practices.