The Magnuson-Moss Act
Protecting tweakers, tuners, and other users of aftermarket equipment.
FANNING FEARS
You want to upgrade your vehicle with aftermarket equipment, but you’re worried about putting the vehicle’s warranty at risk. It’s no wonder. How many times have you heard someone of a dealership say that installing aftermarket equipment automatically voids the warranty? This common misconception has been repeated often enough to be widely believed – though it is completely false.
Fact: Dealers don’t like warranty work, because it pays less than normal repair work. By promoting the myth that aftermarket equipment automatically voids warranties, some dealers avoid such low-paying work. Instead, they attempt to charge customers the prime service rate for work which is rightfully done under warranty.
THE TRUTH
Most vehicle owners are not aware they are protected by federal law: the Magnuson-Moss Warranty – Federal Trade Commission Improvement Act of 1975. Under the Magnuson-Moss Act, aftermarket equipment which improves performance does not void a vehicle manufacturer’s original warranty, unless the warranty clearly and conspicuously states that aftermarket equipment voids the warranty. Most states have warranty statutes, as well. Which provide further protections for vehicle owners.
In other words, that means a dealer can’t wiggle out of his legal warranty obligation merely because you install aftermarket equipment. To find out if any aftermarket equipment automatically voids your vehicle’s warranty, check the owner’s manual. It is likely the language you are looking for appears under a heading such as “What Is Not Covered” Although the language seems negative, remember your vehicle manufacturer is simply saying he does not cover the aftermarket products themselves. He is not saying that the products would void the vehicle warranty.
VEHICLE DEALERS OBLIGATIONS
Suppose your modified vehicle needs repairs while still under warranty. Without analyzing the true cause of the problem, the dealer attempts to deny warranty coverage. He made his decision simply based on the fact that you’ve installed aftermarket equipment – a convenient way to dodge low-paying warranty work.
An example of how ridiculous this can get is the man who was denied warranty coverage by a dealer on his power door locks, because he had improved his exhaust system! Sounds nuts? It really happened – because that man did not know his rights and challenge the dealer’s decision.
Fact: A dealer must prove – not just say – that aftermarket equipment caused the need for repairs before he can deny warranty coverage on that basis.
YOUR RIGHTS
Point out to the dealer the provision of the Magnuson-Moss Act- Require that he explain to you how the aftermarket equipment caused the problem. If he can’t – or his explanation sounds questionable – it is your legal right to demand he comply with the warranty.
Fact: If you are still being unfairly denied warranty coverage, there is recourse. The Federal Trade Commission, which administers the Magnuson-Moss Act, monitors compliance with warranty issues. Direct complaints to the FCT at (202) 326-3128.
FEDERAL LAW
‘In order to improve the adequacy of information available to consumers, prevent deception, and improve competition in the marketing of consumer products, any warrantor warranting a consumer product to a consumer by means of a written warranty shall. . .fully and conspicuously disclose in simple and readily understood language the terms and conditions of such warranty. Such rules . . . require inclusion in the written warranty of any . . . exceptions and exclusions from the terms of the warranty.’ – Magnuson-Moss Warranty & Federal Trade Commission improvement Act, Section 2302(a)
BMW Settles FTC Charges that Its MINI Division Illegally Conditioned Warranty Coverage on Use of Its Parts and Service
BMW of North America LLC has agreed to settle Federal Trade Commission charges that its MINI Division violated the Magnuson-Moss Warranty Act by telling consumers that BMW would void their warranty unless they used MINI parts and MINI dealers to perform maintenance and repair work.
In an administrative complaint, the FTC alleged that BMW, through its MINI Division, violated a provision in the Warranty Act that prohibits companies from requiring that consumers – in order to maintain their warranties – use specific brands of parts or specified service centers (unless the part or service is provided to the consumer without charge).
“It’s against the law for a dealer to refuse to honor a warranty just because someone else did maintenance or repairs on the car,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “As a result of this order, BMW will change its practices and give MINI owners information about their rights.”
The proposed order settling the FTC’s complaint prohibits BMW from violating the Warranty Act and the FTC Act in connection with any MINI Division good or service. The settlement also:
- bars BMW, in connection with the sale of any MINI Division good or service, from representing that, to ensure a vehicle’s safe operation or maintain its value, owners must have routine maintenance performed only by MINI dealers or MINI centers, unless the representation is true and BMW can substantiate it with reliable scientific evidence; and
- requires BMW to provide affected MINI owners with information about their right to use third-party parts and service without voiding warranty coverage, unless BMW provides such parts or services for free.
The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through April 20, 2015, after which the Commission will decide whether to issue the order on a final basis. Interested parties can submit written comments electronically.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad.
