FTC Settlements: Protecting Your Right to Choose Repair Options for Warrantied Products
Updated: Oct 29
Historical information notice: This article preserves the context of its original publication on 08/26/2024. Laws, policies, procedures and fees may have changed. Consult a qualified attorney about current requirements and your circumstances before acting.
In 2022, the Federal Trade Commission challenged warranty restrictions by Harley-Davidson, MWE Investments and Weber-Stephen Products. The matters were resolved through consent orders finalized on 10/27/2022. This article discusses the consumer repair and warranty issues raised in those proceedings.
Understanding the Magnuson-Moss Warranty Act
The Magnuson-Moss Warranty Act, enacted in 1975, is a federal law that governs warranties on consumer products. The primary goal of the Act is to protect consumers from deceptive warranty practices and ensure they receive clear and accurate information about warranty terms. A critical aspect of the Act is that it prohibits companies from conditioning warranty coverage on the consumer’s use of any article or service identified by brand, trade, or corporate name unless such article or service is provided for free under the terms of the warranty.
In simple terms, this means that companies cannot void your warranty or refuse warranty coverage solely because you used a part made by another company or because you opted to have repairs or services performed by an independent repair shop or performed them yourself. Companies are, however, allowed to deny warranty coverage if a third-party part or service actually caused the defect or damage.
The restriction in 15 U.S.C. § 2302(c) also allows an FTC waiver when the statutory conditions are met. Its text states that the prohibition “may be waived by the Commission”. A company’s own assertion that branded parts are necessary is not itself an FTC waiver.
The FTC's Actions Against Harley-Davidson, MWE Investments, and Weber-Stephen Products
According to the FTC, Harley-Davidson, MWE Investments, and Weber-Stephen Products were illegally restricting consumer choices by implying that warranties would be void if consumers used independent repair shops or third-party parts. The FTC's administrative complaints alleged that these companies violated the Magnuson-Moss Warranty Act by misrepresenting the conditions under which their warranties would be voided.
Specifically, these companies informed customers that their warranties would become void if they did not use the company’s parts or services or if they chose an independent repair shop over an authorized dealer. Such practices are prohibited under the Act because they unfairly limit the consumer’s ability to choose where and how to repair their products, potentially increasing repair costs and reducing the accessibility of repair services.
Final Orders Approved on 10/27/2022
FTC announcement of the final orders, dated 10/27/2022.
The FTC approved final consent orders in these three matters on 10/27/2022. By this article’s original publication in 2024, these were no longer merely proposed settlements. The orders addressed warranty restrictions alleged by the FTC; the complaints and consent orders should be distinguished from a contested judicial finding.
Stop Misleading Customers: They are prohibited from telling customers that using third-party parts or repair services will void their warranties.
Revise Warranty Terms: They must revise their warranty terms to clearly state that using an independent repair shop or third-party parts does not void the warranty.
Inform Customers: The companies are required to inform all customers with products under warranty about the terms of the settlement, ensuring consumers are aware of their rights.
For example, the revised warranties will now include language such as: “Taking our product to be serviced by a repair shop that is not affiliated with or an authorized dealer of [Company] will not void this warranty. Also, using third-party parts will not void this warranty.”
What This Means for You
The FTC’s actions are a strong affirmation of your rights as a consumer. If you own a product that is under warranty, you have the right to choose where you get it repaired—whether that is at the dealership, an independent shop, or even by doing it yourself—without the risk of voiding your warranty, as long as the work does not cause any further damage or defects covered by the warranty.
These settlements serve as a reminder to companies that they must comply with the law and respect consumers' rights. It also highlights the FTC’s commitment to enforcing laws that protect consumers from unfair and deceptive practices.
What to Do if Your Warranty is Wrongly Voided
If you are ever informed that your warranty will be voided, or has been voided, because you chose to use a third-party part or an independent repair shop, you should report it to the FTC. You can file a complaint at ReportFraud.ftc.gov.
By reporting such incidents, you help the FTC identify and address violations of the law, ensuring that companies adhere to fair practices and that consumers are protected.
Conclusion
The recent FTC settlements with Harley-Davidson, MWE Investments, and Weber-Stephen Products are a victory for consumer rights, emphasizing the importance of choice in product repairs and maintenance. It is crucial for consumers to be aware of their rights under the Magnuson-Moss Warranty Act and to take action if those rights are infringed. The FTC remains vigilant in its efforts to protect consumers and uphold the principles of fair trade and transparency.
Legal Disclaimer. Originally published: 08/26/2024. This article provides general information only and is not legal advice for any particular matter. Laws, policies, procedures, fees and agency practices may change; their application depends on the facts and jurisdiction. Consult a qualified attorney about your circumstances before acting on this information. Reading this article or contacting Blumsack & Canzano does not, by itself, create an attorney-client relationship. Past results do not guarantee future outcomes. This material may be considered attorney advertising in some jurisdictions.
