It’s Now Easier to Provide Consumer Warranties
Did you know a new law is making it easier for a warrantor to effectively communicate its warranty to consumers? This change in the law is designed to protect consumers but may very well influence the law for sales of non-consumer products.
The E-Warranty Act amends the Magnuson-Moss Warranty Act, a federal statute that mandates requirements for warranties provided for consumer products. (Depending on the nature of the sale, a window may or may not fall within the definition of “consumer product.”)
Until recently, the MMWA Pre-Sale Disclosure Rule required warrantors to have a physical copy of the warranty text available for consumers to review prior to purchase. The E-Warranty Act, which amends this, allows a warrantor to comply by posting the warranty terms on its website as long as the warrantor also provides consumers with a non-Internet based method for obtaining a copy of the warranty (e.g. phone or fax number). Additionally, the warrantor must provide information on how a consumer can obtain the warranty terms directly on its product, product packaging or product manual. The Act also permits certain sellers to provide warranty terms in an electronic format available for review prior to a sale.
The FTC recently proposed two amendments to the MMWA to assist warrantors in complying with the new law, and is seeking public comment on the proposals by June 17, 2016. (Click here for the full press release.) The first proposal amends the Pre-Sale Availability Rule in line with the terms described above.
The second proposal is more of a surprise. It amends The Disclosure Rule, which identifies information that must be contained in warranties for consumer products and requires the warrantor to use simple language in a simple document.
The FTC proposes that any disclosure required to appear “on the face” of a warranty posted online or electronically—including limitations on the length of implied warranties—must appear in close proximity to the beginning of the text of the warranty terms. This is more restrictive than the current definition of “on the face,” which only requires the disclosure to be made on the first page of warranty text. If approved, I suspect this amendment will require many to rearrange the text of their warranties before placing the warranty on the website.
What do you think about the E-Warranty Act? Review the poll results, post your comments, and/or email your thoughts on the subject.
Survey Results for 06/15/2016:
Do you think the E-Warranty Act will affect your business?
Yes, in a positive way
Yes, in a negative way