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FTC Warns Manufacturers Against Conditioning Warranty Coverage on Use of Specific Parts or Services

Posted Thursday, April 19, 2018 by Kyle Straughan

On April 10, the Federal Trade Commission sent warning letters to six unspecified major companies that market and sell automobiles, cellular devices and video gaming systems in the United States. The FTC was warning the companies that their statements that consumers must use specified parts or service providers to maintain their warranties are generally prohibited by the Magnuson-Moss Warranty Act.

Pursuant to the act, warrantors can only make such statements if they provide the parts or services for free or receive a waiver from the FTC. The FTC also cautioned that such statements may be considered deceptive under the FTC Act. The FTC provided examples of the behaviors in question, and commentators used those passages to determine that it is likely that among those contacted were Hyundai, Nintendo, and Sony; whose websites use close to or identical language to that provided by the FTC.

As a warning, the FTC has requested that each company review its promotional and warranty materials to ensure that the materials in question do not state or imply that warranty coverage is conditioned on the use of specific parts or services. Any company currently engaged in the practice is advised to revise its practices to comply with the law, and the FTC will be reviewing the companies’ websites after 30 days. Any failure to correct any potential violations may result in law enforcement action.

It should be noted that this does not necessarily apply to situations wherein the DMCA tampering provisions prohibit repair outside of authorized organizations.

FTC Warns Manufacturers Against Conditioning Warranty Coverage on Use of Specific Parts or Services ›› Ruttler Mills PLLC