Wednesday, April 11th 2018

United States FTC Cracks Down on Predatory Warranty Conditions

The Federal Trade Commission staff has sent warning letters to six major companies that market and sell automobiles, cellular devices, and video gaming systems in the United States.

The letters warn that FTC staff has concerns about the companies' statements that consumers must use specified parts or service providers to keep their warranties intact. Unless warrantors provide the parts or services for free or receive a waiver from the FTC, such statements generally are prohibited by the Magnuson-Moss Warranty Act, a law that governs consumer product warranties. Similarly, such statements may be deceptive under the FTC Act.
Each company used different language, but here are examples of questionable provisions:
  • The use of [company name] parts is required to keep your . . . manufacturer's warranties and any extended warranties intact.
  • This warranty shall not apply if this product . . . is used with products not sold or licensed by [company name].
  • This warranty does not apply if this product . . . has had the warranty seal on the [product] altered, defaced, or removed.
"Provisions that tie warranty coverage to the use of particular products or services harm both consumers who pay more for them as well as the small businesses who offer competing products and services," said Thomas B. Pahl, Acting Director of the FTC's Bureau of Consumer Protection.

FTC staff has requested that each company review its promotional and warranty materials to ensure that such materials do not state or imply that warranty coverage is conditioned on the use of specific parts of services. In addition, FTC staff requests that each company revise its practices to comply with the law. The letters state that FTC staff will review the companies' websites after 30 days and that failure to correct any potential violations may result in law enforcement action.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook (link is external), follow us on Twitter (link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.
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19 Comments on United States FTC Cracks Down on Predatory Warranty Conditions

#1
Xzibit
Finally FTC is standing up for the seals



Corsair should parody this with the ASPCA but they probably miss use the seals too.
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#2
evernessince
Great, now get rid of warranties only being available to the 1st owner. Makes zero sense why a company gets out of it's warranty commitment because you decide to buy a video card from your friend.
Posted on Reply
#4
Steevo
eidairaman1
Been in the Forums All Day here.

www.techpowerup.com/forums/threads/ftc-warns-companies-void-if-removed-stickers-are-lillegal.243216/
Covering the part about not being forced to buy and use only OEM parts is a bigger thing, Nintendo is in hot water over switch current draw, and their over specification charging. Imagine being told by Nintendo your new dead switch isn't covered after it dies from a charger that meets specification but Nintendo didn't. Or Dell voiding your warranty for adding a video card that meets the 75W PCIe limit, but their board isn't capable of it, or their power supply dies and kills everything.
Posted on Reply
#5
evernessince
Steevo
Covering the part about not being forced to buy and use only OEM parts is a bigger thing, Nintendo is in hot water over switch current draw, and their over specification charging. Imagine being told by Nintendo your new dead switch isn't covered after it dies from a charger that meets specification but Nintendo didn't. Or Dell voiding your warranty for adding a video card that meets the 75W PCIe limit, but their board isn't capable of it, or their power supply dies and kills everything.
Wow, have companies become that anti-consumer? That's just gross incompetence, whether intentional or not. I guess it works though. I mean HSBC laundered money for all the big drug cartels and they got away with it for pretty much nothing.
Posted on Reply
#6
RejZoR
evernessince
Great, now get rid of warranties only being available to the 1st owner. Makes zero sense why a company gets out of it's warranty commitment because you decide to buy a video card from your friend.
I always wondered about that in USA. Here in my country, only thing you had to do was to hand over the purchase receipt with the item and the person buying it could use warranty like it was the first purchase.
Posted on Reply
#7
laszlo
  • This warranty does not apply if this product . . . has had the warranty seal on the [product] altered, defaced, or removed.
correct will be:
  • This warranty does not apply if this product . . . has had the warranty seal on the [product] altered, defaced, or removed;to avoid this we'll give you another two seals
Posted on Reply
#8
Vayra86
RejZoR
I always wondered about that in USA. Here in my country, only thing you had to do was to hand over the purchase receipt with the item and the person buying it could use warranty like it was the first purchase.
Same here, for a country so big on free markets you'd expect better customer protection to be honest. Its staggering what I hear not only from the US but also other countries in terms of warranty and how a customer is treated. Lots of short term quick wins and zero long term investment in a customer base. Its so stupid.
Posted on Reply
#9
TheGuruStud
Please, govt isn't going to do a damn thing about auto dealers/manuf lying to customers claiming they have to use their fluids. It happens every day at every dealer for decades, now. Or when they deny legitimate warranty claims every single day at every single dealer (although kia is pretty legitimate).

Cars are junk and everyone knows it. You think the govt is going to crack down on GM? Bwahhahaha. They're all butt buddies. They killed over 100 people and nothing happened. They stole almost 7 billion from taxpayers (in collusion of course) and nothing happened.

What a joke. This is some Obama level lip service.

Wake me up when something is even done about John Deere.
Posted on Reply
#10
sergionography
Steevo
Covering the part about not being forced to buy and use only OEM parts is a bigger thing, Nintendo is in hot water over switch current draw, and their over specification charging. Imagine being told by Nintendo your new dead switch isn't covered after it dies from a charger that meets specification but Nintendo didn't. Or Dell voiding your warranty for adding a video card that meets the 75W PCIe limit, but their board isn't capable of it, or their power supply dies and kills everything.
Well i think there must be a fair middle ground somewhere. The company warrants a product for you in case there are defects and ensure it will work as designed for a certain amount of time, so its a testimony about them being sure about their product etc. Rather than being insurance that covers user failures or misfortunes. if you add or switch parts you have practically tweaked and changed the factory design, so by extension whatever happens to the product becomes a mystery because the product was running out of spec. Surely there are many good examples of oems however just taking advantage and finding an easy way out, your example however about the gpu is just a bad one. I dont believe an oem should be responsible for your blowing up the power supply by adding a gpu that it simply wasnt designed to handle.
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#11
DeathtoGnomes
evernessince
Wow, have companies become that anti-consumer? That's just gross incompetence, whether intentional or not. I guess it works though. I mean HSBC laundered money for all the big drug cartels and they got away with it for pretty much nothing.
The consumer always has to pay a premium for service that is usually not good. Intel and their speed stepping is the same thing, small increases to sucker the consumer to buying "top of the line" CPU's. The reason the consumer gets shafted in the usa (small letters) here is because of how lobbying works, the more money it throws at those that matter the more they can guarantee things will result in their favor.

So seeing the FTC make this ruling is fodder for the consumer, it looks like a smokescreen.
Posted on Reply
#12
Fx
Vayra86
Same here, for a country so big on free markets you'd expect better customer protection to be honest. Its staggering what I hear not only from the US but also other countries in terms of warranty and how a customer is treated. Lots of short term quick wins and zero long term investment in a customer base. Its so stupid.
It wasn't always this way. Many things have gradually declined with time and this is but one of them.
TheGuruStud
Please, govt isn't going to do a damn thing about auto dealers/manuf lying to customers claiming they have to use their fluids. It happens every day at every dealer for decades, now. Or when they deny legitimate warranty claims every single day at every single dealer (although kia is pretty legitimate).

Cars are junk and everyone knows it. You think the govt is going to crack down on GM? Bwahhahaha. They're all butt buddies. They killed over 100 people and nothing happened. They stole almost 7 billion from taxpayers (in collusion of course) and nothing happened.

What a joke. This is some Obama level lip service.

Wake me up when something is even done about John Deere.
Yeah... pretty much and it won't be getting better any time soon.
Posted on Reply
#13
RejZoR
Vayra86
Same here, for a country so big on free markets you'd expect better customer protection to be honest. Its staggering what I hear not only from the US but also other countries in terms of warranty and how a customer is treated. Lots of short term quick wins and zero long term investment in a customer base. Its so stupid.
There is still a lot of crap even in Europe. Some vendors have international warranty, but most don't. For example, if I buy ASUS motherboard in Germany, I have to send it to Germany, I can't go to a local distributor. Which sucks major balls, especially since postal costs are ridiculous in my country. For international packages of larger weight (for example a beefy heatsinked graphic card) you can pay from 20-30€ just for shipping to the service center. If something costs 100€ you almost start thinking if it's even worth it...
Posted on Reply
#14
erixx
great news!

RejZor, I feel your pain, I have had Asus+Germany warranty issues (shop= Caseking) and I will never go back to them! A stinking pile of morons.
Posted on Reply
#15
texas64
MSI here in the US puts those stickers on their AIO machines and laptops... Hopefully they will stop now.
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#16
Ahhzz
texas64
MSI here in the US puts those stickers on their AIO machines and laptops... Hopefully they will stop now.
nope. because they still sell the devices overseas, and they can enforce those stickers there.
Posted on Reply
#17
lexluthermiester
Steevo
Or Dell voiding your warranty for adding a video card that meets the 75W PCIe limit, but their board isn't capable of it, or their power supply dies and kills everything.
You mean HP? Dell stands behind their products solidly. and for that matter so does Nintendo.
Posted on Reply
#18
evernessince
texas64
MSI here in the US puts those stickers on their AIO machines and laptops... Hopefully they will stop now.
Unfortunately I don't think they will stop. They may not be able to void your warranty with those stickers anymore but that won't stop people from thinking it will. Remember, while they may not be able to enforce their anti-consumer policies, they can still make people believe they have less rights than they actually do. If the government wants these stickers to completely go away, it would have to make the stickers themselves, not just the policies, to be illegal. There are many other deceptive warranty tactics that can be used that aren't completely illegal yet either (like shrinkwrap warranties).
Posted on Reply
#19
DeathtoGnomes
evernessince
Unfortunately I don't think they will stop. They may not be able to void your warranty with those stickers anymore but that won't stop people from thinking it will. Remember, while they may not be able to enforce their anti-consumer policies, they can still make people believe they have less rights than they actually do. If the government wants these stickers to completely go away, it would have to make the stickers themselves, not just the policies, to be illegal. There are many other deceptive warranty tactics that can be used that aren't completely illegal yet either (like shrinkwrap warranties).
its like driving up to a stop sign, there are those that will completely stop and everyone else wont.
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