United States: FTC Proposes Rules To Enforce The E-Warranty Act Of 2015

The Federal Trade Commission has released for comment, proposed amendments to the FTC's rules under the 1975 Maguson-Moss Warranty Act, as required by the E-Warranty Act of 2015. The proposed amendments chiefly would amend the Maguson-Moss Pre-Sale Availability Rule. That Rule requires sellers of consumer products costing more than $15 to make any written warranty that comes with the product available for examination by prospective purchasers prior to sale, and requires warranty issuers to take certain steps to enable the sellers to meet that obligation.

The proposed amendments for the first time would permit sellers to make the warranty terms available to prospective purchasers via electronic means if the warrantor provides the warranty terms on its Internet website. Specifically, if the warrantor (i) provides the warranty terms in an accessible digital format on its Internet website, (ii) informs consumers in its product manual, on the product itself, or on the product packaging, that the warranty terms are on its website, (iii) makes it possible for consumers to readily identify on the website the warranty terms for the product the consumer purchased, and (iv) informs consumers of a phone number, mailing address or other non-Internet means to request a hard copy of the warranty free of charge, the seller can then display the warranty to prospective purchasers electronically either in close proximity to the product, or upon request if the availability of the electronic warranty is prominently disclosed in store signage. Electronic accommodation is also proposed for catalog, mail order, and in-home sellers.

To this writer, at least, there appears to be a disconnect between the E-Warranty Act, which required the FTC to enact rules permitting digital distribution of the warranty upon sale, and the FTC's proposals, which would amend the Pre-Sale Availability Rule. Indeed, as indicated above, the proposed amendments confusingly refer to "the product the consumer purchased" in a rule about pre-sale availability.

Perhaps some of this will get hashed out in the comments, which are due June 17, 2016.

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.