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May 2, 2018

Consumers don’t have to use genuine parts to maintain a warranty, FTC says

by John_A

The United States Federal Trade Commission (FTC) called out six technology companies for their deceptive warranty practices, giving each firm 30 days to correct its practices to be in compliance with U.S. laws. We previously reported that the FTC sent letters to six companies warning them that the use of the “warranty void if removed” stickers are illegal, and thanks to recently uncovered letters from Motherboard‘s Freedom of Information Act request, we now know the names of the companies. In addition to the use of deceptive stickers, Asus, HTC, Hyundai, Microsoft, Nintendo, and Sony were also warned that the warranty language on their websites is in violation of U.S. laws.

“This letter places you on notice that violations of the Warranty and FTC Acts may result in legal action,” the letters, dated April 9 and authored by FTC associate director of marketing practices Lois Greisman, read, citing the 1975 Magnuson-Moss Warranty Act as justification.

Restrictions placed on a product requiring it to be used with official accessories — including games, software, and hardware peripherals like power supplies — for the warranty to be honored are illegal. A company cannot, for example, void your warranty if you use a third-party or unlicensed power supply.

In its letter to Microsoft, for example, the FTC called out Microsoft’s warranty language, which states that the company “is not responsible” and that the warranty “does not apply if your Xbox One or accessory is repaired by anyone other than Microsoft.” This, according to the FTC, violates U.S. laws. In Hyundai’s case, the FTC took note of the auto manufacturer’s service clause on its website, which states that “the use of Hyundai Genuine Parts is required to keep your Hyundai manufacturer’s warranties and any extended warranties intact.”

“In addition, claims by a warrantor that create a false impression that a warranty would be void due to the use of unauthorized parts or service may, apart from the Warranty Act, constitute a deceptive practice under Section 5 of the FTC Act,” Greisman wrote.

After reviewing the warranty language on the manufacturers’ websites, the FTC gave these companies 30 days to be in compliance

The FTC’s latest move is consistent with its previous actions, like clarifying the law to state that jailbreaking or rooting phones, tablets, and smart TVs is not only legal, it does not void the entire warranty. These modifications, the agency noted, are protected so as long as they are not the cause of a specific damage that the consumer wants to get repaired under an existing warranty.

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