SEMA eNews Vol. 18, No. 25, June 18, 2015

FTC Strengthens Prohibitions Against Unfair Warranty Denials

By SEMA Washington, D.C., Staff

The Federal Trade Commission (FTC) has reviewed its rules, guides and interpretations under the Magnuson-Moss Warranty Act—the law governing warranties issued for consumer products, including automobiles and auto parts. The FTC outlines information manufacturers and sellers must supply to consumers regarding warranty coverage, and provides guides to help advertisers avoid unfair or deceptive practices. 

The FTC restated most of its existing rules for enforcement of the law and expanded the rules with respect to two issues. First, the FTC clarified that warranty language is deceptive if it implies that warranty coverage is conditioned on the use of specified parts or services.

The FTC provided the following example: “a provision in the warranty, such as “use only an authorized ‘ABC’ dealer” or “use only ‘ABC’ replacement parts,” is prohibited where the service or parts are not provided free of charge pursuant to the warranty.”

Second, the FTC confirmed that the law applies to warranties that would limit ordinary repair and maintenance options as well as warranties that would limit the ability to install specialty equipment. 

For more information, contact Ashley Ailsworth at ashleya@sema.org.

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