Earlier this week, the Federal Trade Commission (“FTC”) sent warning letters to six (6) major companies that market and sell automobiles, cellular devices, and video gaming systems. The FTC indicated that it has concerns about the companies’ statements that consumers must use specified 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, and may be deceptive under the FTC Act. The FTC has requested that each company review its promotional and warranty materials to ensure that they do not state or imply that warranty coverage is conditioned on the use of specific providers, and, if necessary, modify such materials. The warning letters state that the FTC will review the companies’ websites after thirty (30) days and that failure to correct any potential violations may result in an enforcement action.
Takeaway: Companies should review and, if necessary, update their product warranties for compliance with the Magnuson-Moss Act and the FTC Act, as these recent warning letters may signal additional enforcement by the FTC.