Deceptive Warranty Claims Persist Three Years After FTC Warnings
An update to a 2018 PIRG report finds more than three dozen manufacturers warned by the FTC are still pushing illegal “Void if Removed” warnings.
Manufacturers of consumer goods received a stern warning from the U.S. Federal Trade Commission (FTC) in 2018 over deceptive practices regarding product warranties that violate federal law. Those warnings don’t appear to have done much good.
A new report out from the US Public Interest Research Group (US PIRG) finds that virtually all the manufacturers cited in a 2018 report on the deceptive warranty claims continue to illegally void warranties performed by independent repair providers, in violation of the federal law.
Conditioning a warranty to forbid independent repair is a violation of the Magnuson-Moss Warranty Act, a 1975 federal law that governs warranties on consumer products. The law establishes standards for manufacturer-issued warranties and disclaimers, with the goal of eliminating unfair or misleading claims.
In its original report from 2018, PIRG surveyed 50 major manufacturers of devices and found violations at 45 of the 50 companies they surveyed. Those firms either had clauses in warranties which claimed repair would void coverage. In other cases, warranty language was unclear or customer service representatives told PIRG employees posing as consumers that independent repair would void the warranty.
Warranties in the Void II, released on Thursday (PDF), revisits that 2018 study. In it, the group concluded that all the manufacturers it surveyed continued to insist, three years later, that independent repairs would void manufacturer warranties, in violation of federal law.
All 43 manufacturers PIRG surveyed in the fall of 2020 stated that they void
warranty coverage due to independent or self repair. In addition, three manufacturers surveyed by PIRG in 2020 didn’t make warranty information accessible prior to purchase -- another violation of federal law. The manufacturers’ illegal behavior took many forms, PIRG found. Of the 43 manufacturers surveyed by PIRG in 2020, all of them said in writing or via customer support personnel that they would inform consumers they would automatically void the warranty if their products receive “unauthorized” repairs. Eleven written warranties PIRG staff reviewed contain language to dissuade consumers from trying self-repair or independent repair at the expense of their warranty.
For example, documentation for Waterpik’s Complete Care electric toothbrushes claim that “If product is opened/disassembled for ANY reason warranty is VOID,” a clear violation of Magnuson-Moss.
Support chats from manufacturers including LG, Whirlpool and Panasonic are also included in the report and provide evidence that consumers are getting inaccurate information about what manufacturer warranties cover. In the chats, consumers are told that only repairs done by “authorized repair technicians” are allowed under the warranty. Magnuson-Moss specifically prohibits that kind of exclusive contract.
Following the 2018 PIRG report, the FTC sent stern warning letters to six major electronics firms: Microsoft, Nintendo, Sony, HTC, Asus, and Hyundai regarding illegal practices, including affixing “Warranty Void if Removed” stickers to products to warn owners and independent repair shops from servicing the devices, according to reporting by Vice. Those letters appear to have changed behaviors at the named companies, according to Nathan Proctor of US PIRG. Tests of the affected firms regarding warranty terms have yielded “the right answers,” Proctor told Fight to Repair.
Which raises the question of whether the underlying problem is lax FTC enforcement of federal warranty law, rather than recalcitrant manufacturers?
In short, “yes.”
Advocates of right to repair laws at both the state and national level say that the country’s main consumer protection agency has been asleep at the wheel when it comes to enforcing federal consumer protection laws like Magnuson-Moss. The FTC seemed poised to wade back in to issues around manufacturer warranties in 2019 when it sponsored a workshop, Nixing the Fix, to focus on restrictions on repair. Since then, however, there have been no further actions or rule making based on the findings of that event.
PIRG is trying to turn up the heat, noting that the COVID pandemic and its associated delays and supply disruptions has underscored the importance of repair to consumers. A report the group released in January pegged the savings to American families from robust repair options that extended the useful life of electronics at $40 billion annually.
"The FTC has completely failed to enforce the law,” Proctor told Fight to Repair. “They need to wake up and do their jobs."
The FTC, Waterpik and LG did not immediately respond to a request for comment from Fight to Repair. We will update our story when and if comments become available.