Manufacturers: Be Careful of Restricting Your Customer's Right to Repair Your Products

Under the Magnuson-Moss Warranty Act, companies that offer warranties for consumer products that cost more than $5 can’t condition their warranties on a consumer using a specific brand-name replacement part or a specific repair company. For example, you cannot void your warranty if the consumer buys parts from another company or gets service from an independent repair company. According to the Federal Trade Commission (which protects the public from deceptive or unfair business practices and from unfair methods of competition) it is a deceptive trade practice for a company to create the misleading impression that a consumer will void their warranty by using unauthorized parts or service.

According to the FTC, "Consumers deserve choices when it comes to repairing their products, and independent dealers and repair shops should have a fair chance to compete for their business."

The FTC recently sent warning letters to eight companies regarding consumer's restrictions on repairing previously purchased goods.

What should your business do?

Conduct a warranty assessment at your company. If it’s been a while since you’ve reviewed your warranties, now would be a good time to make sure you’re complying with the law. Remember that the FTC evaluates your statements from the perspective of reasonable consumers. As a result, consider what you convey to consumers expressly and by implication.

If you can establish that the particular article or service is necessary to make the product function properly, follow the procedure in the law. The Magnuson-Moss Act gives companies the right to seek a waiver from the FTC. Here’s what Section 2302(c) of the law says: “[T]he prohibition of this subsection may be waived by the Commission if: (1) the warrantor satisfies the Commission that the warranted product will function properly only if the article or service so identified is used in connection with the warranted product, and (2) the Commission finds that such a waiver is in the public interest.” Of course, savvy companies seek a waiver before the FTC raises concerns about their warranty practices.   

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