For more information contact federal trade commission at (202) 326-2222
Has either of these situations happened to you? Are you concerned of adding after market accessories (i.e. H.I.D. headlights, car alarm, iPod integration, etc.) not purchased and installed by the dealer? Are you concerned it will void the car's warranty? It is important for our customers to know their rights under the antitrust laws so they can assure that such purchase will in no way affect the warranty on their cars.
For a manufacturer (or its authorized representative) to condition a warranty on the purchase and use of its own parts or service.
For a manufacturer (or its authorized representative) to refuse to honor a warranty unless the manufacturer can show that an aftermarket accessory is the cause of a particular malfunction otherwise covered by the warranty.
According to the Report of the House of Representatives which accompanied the law (House Report No. 93-1197, 93d Cong 2d Sess.) the Magnuson-Moss act was enacted by Congress in response to the widespread misuse by merchants of express warranties and disclaimers. The legislative history indicates that the purpose of the Act is to make warranties on consumer products more readily understood and enforceable and to provide the Federal Trade Commission with means to better protect consumers.
The statute is remedial in nature and is intended to protect consumers from deceptive warranty practices. Consumer products are not required to have warranties, but if one is given, it must comply with the Magnuson-Moss Act.
The Magnuson-Moss Act contains many definitions:
Sellers of consumer products who make service contracts on their products are prohibited under the Act from disclaiming or limiting implied warranties. (Remember also that sellers who extend written warranties on consumer products cannot disclaim implied warranties, regardless of whether they make service contracts on their products.) However, sellers of consumer products that merely sell service contracts as agents of service contract companies and do not themselves extend written warranties can disclaim implied warranties on the products they sell.
The Act provides that any warrantor warranting a consumer product to a consumer by means of a written warranty must disclose, fully and conspicuously, in simple and readily understood language, the terms and conditions of the warranty to the extent required by rules of the Federal Trade Commission. The FTC has enacted regulations governing the disclosure of written consumer product warranty terms and conditions on consumer products actually costing the consumer more than $15. The Rules can be found at 16 C.F.R. Part 700.
Under the terms of the Act, ambiguous statements in a warranty are construed against the drafter of the warranty.
Likewise, service contracts must fully, clearly, and conspicuously disclose their terms and conditions in simple and readily understood language.
Warrantors cannot require that only branded parts be used with the product in order to retain the warranty. This is commonly referred to as the "tie-in sales" provisions, and is frequently mentioned in the context of third-party computer parts, such as memory and hard drives.
Under a full warranty, in the case of a defect, malfunction, or failure to conform with the written warranty, the warrantor:
In addition, the warrantor may not impose any duty, other than notification, upon any consumer, as a condition of securing the repair of any consumer product that malfunctions, is defective, or does not conform to the written warranty. However, the warrantor may require consumers to return a defective item to its place of purchase for repair.
The Magnuson-Moss Warranty Act does not invalidate or restrict any right or remedy of any consumer under any other federal law, nor does the Act supersede the Federal Trade Commission Act as it pertains to antitrust actions.
The Act does not invalidate or restrict any right or remedy of any consumer under state law. The Act is not the dominant regulation of consumer product warranties, and while it prescribes certain disclosures and restricts certain limitations on warranties, it leaves other warranty law untouched.
Although the Act covers warranties on repair or replacement parts in consumer products, warranties on services for repairs are not covered.
The federal minimum standards for full warranties are waived if the warrantor can show that the problem associated with a warranted consumer product was caused by damage while in the possession of the consumer, or by unreasonable use, including a failure to provide reasonable and necessary maintenance.
The Act is meant to provide consumers with access to reasonable and effective remedies where there is a breach of warranty on a consumer product. The Act provides for informal dispute-settlement procedures and for actions brought by the government and by private parties.
The FTC has been mandated by Congress to promulgate rules to encourage the use of alternative dispute resolution, and full warranties may require mediation and/or arbitration as a first step toward settling disputes.
In addition, the federal government has the authority to take injunctive action against a supplier or warrantor who fails to meet the requirements of the act.
Finally, consumers may seek redress in the courts for alleged violations of the Magnuson-Moss Act. A consumer who has been injured by the noncompliance of a supplier may bring an action in federal court if the amount in controversy is over $25, or a class action if the number of class plaintiffs is greater than 100. If the jurisdictional amount, or number of plaintiffs, do not meet these thresholds, an action under the act may be brought only in state court. Moreover, one of the key aids to the effectiveness of the Act is that a prevailing plaintiff may recover reasonable costs of suit, including attorney fees.