Passing the Automotive Warranty Rights Test After FTC vs. BMW

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True or False?

1.         An automaker or dealership can unilaterally require customers to purchase branded products and services to maintain warranty coverage.

2.         An automaker or dealership can require customers to use branded products and services to maintain warranty coverage if the products are provided free of charge.

3.         A dealership can deny warranty coverage due to a customer’s use of non-branded products and services if there’s a Technical Service Bulletin that says so.

4.         “Little guys” can win against big corporate automakers when they break the rules.

(Answers at end of article)

As evidenced by the Federal Trade Commission’s recent action against BMW for tie-in sales, obtaining justice requires both knowledge and the gumption to use it. Had the Automotive Oil Change Association (AOCA) not filed complaints against BMW and other automakers year after year for violating the Magnuson Moss Warranty Act, consumers and their aftermarket service providers would not be on the verge of relief via our favorite federal warranty law watchdog. Going forward, although the BMW case should make it easier to defeat tie-in sales, such practices are likely to continue, which makes knowing the rules and how to use them imperative.

Recap on the Rules

There are two ways for an automaker to require customers to use branded products and services. They can either provide the branded products and services for free or obtain a waiver from the Magnuson Moss Warranty Act’s prohibition against tie-in sales from the Federal Trade Commission. To obtain such a waiver, the automaker must first prove that a warranted vehicle can function properly only by using the branded product or service. If that hurdle is met, then the commission determines whether issuing a waiver is in the public interest. To date, no waivers have been issued to grant automakers or dealerships the right to make tie-in sales requirements for warranty coverage.

Since automakers/dealerships have no right to require tie-in sales, they must, therefore, prove engine damage to each vehicle on a case-by-case basis to deny warranty coverage over non-branded parts and services. Pointing to a Technical Service Bulletin isn’t proof. To acquire the evidence necessary to deny a customer’s warranty coverage over, for instance, the use of a non-OEM brand oil filter, a dealership would have to undertake a complete engine tear-down or dismantling by an expert technician capable of ruling out all of the other, likely non-filter-related, engine damage, including a malfunctioning engine check valve, a crooked oil filter face plate, basic lack of engine coolant and oil starvation caused by oil pump malfunction and/or gunk build-up from prolonged drain intervals. No evidence equals no rightful denial of warranty coverage. It’s that simple.

Standing Up for Your Rights

Obviously, an educated customer can challenge a warranty denial on the spot, but what if he or she doesn’t feel comfortable or capable of fighting with an automaker or dealership right then and there? While the dealership is typing up their warranty-busting bill, the customer can use their smartphone to tell the Federal Trade Commission what’s going on at: www.ftccomplaintassistant.gov/GettingStarted#crnt The commission offers an easy Q&A-style complaint form, as well as instant chat. It’s fast, easy and satisfying. If the customer prefers to file with local authorities, the National Association of Attorneys General offers a website linking to every state at: http://www.naag.org/naag/attorneys-general/whos-my-ag.php If a customer doesn’t want to file any kind of complaint, they can still support their cause by telling their aftermarket service provider about the warranty denial and providing copies of any relevant documents. And, as always, if a fast lube operator receives information about any of these cases, they should report it to AOCA headquarters immediately. 

[Answers: (1) false; (2) true; (3) false; (4) true.]

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