Around the Industry: FTC Approves Final Consent Order Against BMW of North America

Following a public comment period, the Federal Trade Commission has approved a final consent order against BMW of North America LLC, whose MINI division allegedly violated the Magnuson-Moss Warranty Act by telling consumers BMW would void their warranty unless they used MINI parts and MINI dealers to perform maintenance and repair work.

In March 2015, BMW agreed to settle FTC charges through its MINI division. It violated a Warranty Act provision that prohibits companies from requiring consumers — in order to maintain their warranties — to use specific brands of parts or specified service centers unless the part or service is provided to the consumer without charge.

The consent order, which will remain in effect for 20 years, prohibits BMW from violating the Warranty Act regarding any MINI division goods or services. It also bars BMW, regarding the sale of any MINI division good or service to say in order to ensure a vehicle’s safe operation or maintain its value, owners must have routine maintenance done only by MINI dealers or MINI centers without substantiating the representation with competent and reliable scientific evidence. BMW must not misrepresent any material fact about warranty or maintenance requirements of any good or service and is required to notify affected MINI owners of their right to use third-party parts and service without voiding warranty coverage unless BMW provides such parts or service for free. BMW is also required to post the notice on its website.

The Commission vote approving the final consent order was 4-0.