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FTC, Where Art Thou?: Appliance Manufacturers Routinely Invalidate Warranties if Customers Use Third-Party Repair Services

Summary:
By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans. Appliance repair is on my mind at the moment. Why? The dishwasher at our winter rental beach hideaway, where my husband and I have sequestered ourselves to avoid the pandemic, died last Friday. Leaving us to do the dishes. I know, I know, a first world problem. And a task I’ve done before, and no doubt will do many times again. We didn’t have a dishwasher in the flat we lived in for three years while my husband and I were both doing post-graduate studies in Oxford. Ditto for the over-priced Harvard University flat we lived in during three years of law school. Nor did I in the cabin in the woods where I lived during five winters spent as a ski bum

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By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.

Appliance repair is on my mind at the moment.

Why?

The dishwasher at our winter rental beach hideaway, where my husband and I have sequestered ourselves to avoid the pandemic, died last Friday.

Leaving us to do the dishes.

I know, I know, a first world problem. And a task I’ve done before, and no doubt will do many times again.

We didn’t have a dishwasher in the flat we lived in for three years while my husband and I were both doing post-graduate studies in Oxford. Ditto for the over-priced Harvard University flat we lived in during three years of law school. Nor did I in the cabin in the woods where I lived during five winters spent as a ski bum in Whistler, BC.

And long before any of these, my parents only acquired a dishwasher sometime during my middle school years, but it really didn’t make a dent in the dirty dishes our family of seven generated and which I, as the eldest, was charged with cleaning up. Our machine was temperamental, and  couldn’t handle pots or other heavily soiled items; even dinner plates needed to be more or less spic and span before they went into the dishwasher.

So, the last week of sudsing up has unleashed a flood of many memories. Like many others, I’ve been doing lots of cooking and baking while sequestered, and I’ve come to rely on the dishwasher. Which is suddenly not there.

So, with this as context, I was particularly receptive to yesterday’s press release from U.S .PIRG’s Nathan Proctor, the campaign director for their right to repair efforts. enclosing an updated survey US PIRG’s Education Fund has conducted of the repair policies of major appliance manufacturers,  Warranties in the VOID II.

Over to that report:

When you buy a new appliance, you have an expectation that it will work, at least for a few years. But sometimes, it breaks down quickly. So you call up the manufacturer to see about getting it fixed under your warranty. Sometimes they fix it, but other times they refuse. Sometimes their remedy takes so long you are forced to find another way to fix the product — or you might just give up and buy a new one.

In 2018, U.S. PIRG conducted a  study, Warranties in the Void, in which it found that most U.S appliance manufacturers claimed their warranties would be voided if consumers availed themselves of independent third-party repair services or self-repair. This despite Federal Trade Commission (FTC) guidelines affirming, according to U.S. PIRG’s latest report:

[g]enerally, the [Magnuson- Moss Warranty Act (MMWA)] prohibits warrantors from conditioning warranties on the consumer’s use of a replacement product or repair service identified by brand or name,”

(Jerri-Lynn here: The full report discusses some exceptions to this provision.)

Nonetheless, the 2018 report found that 45 of 50 manufacturers surveyed asserted a right to void warrantees in these conditions – despite the statutory prohibition- GOING SO FAR AS placING stickers on some products making this claim. The FTC that year warned six companies that placing stickers saying the “warranty would be void if removed” on their products is prohibited by existing warranty laws,  according to yesterday’s U.S. PIRG press release.

Now, as a result of the pandemic, the use of repair services has surged. Again, as per the most recent U.S. PIRG report:

“[g]enerally, the [Magnuson- Moss Warranty Act (MMWA)] prohibits warrantors from conditioning warranties on the consumer’s use of a replacement product or repair service identified by brand or name,” with some exceptions explored later in this report1.

So what’s the current state of play?

Alas, U.S. PIRG’s follow-up study found that virtually all appliance manufacturers continue to insist that use of third-party repair services invalidates their warranties:

Unfortunately, in our survey, conducted in the fall of 2020, we found that all of the 43 companies we surveyed indicated that warranty would be voided due to independent repair. These companies either had clauses in warranties which claimed repair would void coverage, or their warranties were unclear and their customer service representatives, when asked, stated that independent repair would void the warranty.

So, allow me to summarize and repeat: This state of affairs continues, despite that making a valid warranty dependent on forbidding independent repair is generally understood to be a violation of Magnuson-Moss.

I won’t get into praising the details of the U.S. PIRG report in this short post. Interested readers may do that themselves, by looking at the full report, to which I have linked above. Nor will I do more than mention how such putative warranty restrictions contribute to the waste crisis, by forcing consumers to jettison products that might otherwise be repaired.

I merely ask the simple question: where is the FTC on this issue?

Biden has tried to beef up that agency, by, for example, nominating antitrust expert and Big Tech critic Lina Khan to fill an empty commissioner’s chair.

As with so many other U.S. legal issues, the problem here isn’t the law itself.

The issue is enforcing it.

As we wait for states to enact right to repair laws – or not, with an Oregon measure yesterday once again dying in committee – the FTC could independently buttress right to repair efforts by tellingto manufacturers that making these spurious claims about voided warranties is simply not on.

So I ask again: FTC, where art thou?

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