In 2022, the Federal Trade Commission (FTC) made a significant announcement that reinforces consumer rights in the realm of product repairs and warranties. The FTC reached settlements with three prominent companies—Harley-Davidson motorcycles, MWE Investments (maker of Westinghouse-brand outdoor power generators), and Weber-Stephen Products (manufacturer of Weber grills)—after finding that they were illegally restricting consumer warranty rights. These companies were found to be in violation of the Magnuson-Moss Warranty Act, a federal law that protects consumers from deceptive warranty practices. In this blog, we will explore the details of these FTC settlements, what they mean for consumers, and the importance of knowing your rights when it comes to repairing products under warranty.
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 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 lawsuits allege 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.
The Proposed Settlements and What They Mean for Consumers
The settlements proposed by the FTC require these companies to cease making such statements that mislead customers about the voiding of warranties. As part of the settlements, the companies must:
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.
Disclaimer: The information provided in this blog post is for general informational purposes only and does not constitute legal advice. While we aim to provide accurate and timely information, the legal landscape can change, and the specifics of your situation may vary. Readers should not rely solely on the information presented herein without consulting a qualified attorney to obtain advice regarding their individual circumstances. The contents of this blog are not intended to create an attorney-client relationship, and receipt or review of this information does not constitute such a relationship. For personalized legal guidance, please contact an experienced lawyer licensed in your jurisdiction.
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