New Rules Allowing Online Disclosure of Consumer Warranties

November 15, 2016Alerts

The Federal Trade Commission recently amended its rules governing the disclosure of warranties on consumer products. Under the Magnuson-Moss Warranty Act of 1975, manufacturers are required to make their warranty terms available for review pre-sale and with the product. To meet these requirements, warrantors were required to include printed copies of their warranty terms with their products. The E-Warranty Act of 2015 modernized the Magnuson-Moss Warranty Act by allowing manufacturers to meet these requirements by pointing consumers to a website address.

Online Disclosure Requirements - Warrantors that choose to disclose their warranty terms online must comply with the following requirements: (1) provide consumers with the website address where the warranty terms can be found, as well as a non-digital method for requesting a copy of the terms, such as a phone number or mailing address; (2) provide a non-digital copy of the terms promptly and free of charge upon request; (3) ensure the terms are displayed and maintained online in a clear and conspicuous manner; and (4) include sufficient information with the product or on the website for the consumer to determine which terms apply. The amendments also clarify that, for online warranties, statutorily-mandated disclosures must be placed close to where the warranty text begins.

Retail Locations - For products sold at retail locations, warrantors must still ensure that their warranty terms are available for consumers to review, which can be accomplished by maintaining hard copies of the warranty terms at retail locations or providing consumers with online access to the warranty terms at retail locations.

Compliance - Warrantors must still comply with the Magnuson-Moss Warranty Act, which restricts how warranties are titled and prohibits certain warranty restrictions (such as prohibitions against “tie-in” sale requirements and restrictions on disclaimers of implied warranties). If you want to go paperless or simply have questions about whether your warranty terms comply with the Magnuson-Moss Warranty Act, please contact Jim Breitenbucher or Laura Hansen.