On September 15, 2016, the FTC adopted final amendments to its Magnuson-Moss Warranty Rules, to give effect to the E-Warranty Act of 2015. The amendments will become effective October 17, 2016.
The amendments will allow warrantors to utilize their websites to satisfy their obligations (i) to disseminate their warranties to consumers who purchase the warranted product and (ii) to assist sellers to make the warranty terms available for pre-sale inspection by consumers, subject to certain conditions. These conditions are discussed below.
Under the amendments, warrantors will be able to disseminate the warranty in an "accessible digital format on the warrantor's Internet Web site" if the warrantor:
- Provides information to the consumer that will inform the consumer how to obtain warranty terms by indicating, in a clear and conspicuous manner, in the product manual or on the product or product packaging: (A) the Internet website of the warrantor where such warranty terms can be reviewed, and (B) the phone number, the postal mailing address of the warrantor, or another reasonable non-Internet based means for the consumer to request a copy of the warranty terms;
- Provides a hard copy of the warranty terms promptly and free of charge upon request by a consumer or a seller made pursuant to (i) above;
- Ensures that the warranty terms are posted in a clear and conspicuous manner and remain accessible on the warrantor's website; and
- Provides information with the product or on the website sufficient to allow the consumer to readily identify the warranty terms that apply to the particular warranted product.
Sellers may obtain copies and provide them to consumers for pre-sale inspection by printing them from the warrantor's website or requesting a hard copy (at no cost) from the warrantor. Sellers may also display the terms electronically in the store. Importantly, the amendments do not allow sellers to refer consumers to an Internet website to satisfy their pre-sale availability obligation. Consumers must have the ability to view the full warranty terms at the store. The amendments also set forth what catalog and door-to-door sellers must do when the warrantor has chosen to disseminate its warranty on its website.
Currently, warrantors must provide sellers the warranty materials sellers need to meet their pre-sale disclosure obligation by providing copies of the warranty, providing warranty stickers, tags, signs, or posters, or printing the warranty on the product's packaging. The amendments do not alter the duties of warrantors who do not choose to employ an online method to supply warranty terms.
The amendments also require that if a warranty is posted online, any limitations it imposes on the duration of implied warrantees and the corresponding sentence stating that some states do not allow limitations on how long an implied warranty lasts, must appear close to the beginning of the warranty text.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.