What counts as a written warranty under the Act?

A written affirmation of fact or written promise that the material or workmanship is defect free or will meet a specified level of performance over a specified period of time, or a written undertaking to refund, repair, replace, or take other remedial action, qualifies if it becomes part of the basis of the bargain between a supplier and a buyer for purposes other than resale. A product information disclosure without a specified time period to which it relates is not a written warranty, because the time period is part of what makes a statement a warranty.

Which products does the Act cover?

The Act covers written warranties on tangible personal property normally used for personal, family, or household purposes. A product that is also used commercially can still be covered, since automobiles and typewriters used for both personal and commercial purposes come within the definition of consumer product. Where coverage is unclear, any ambiguity will be resolved in favor of coverage.

Is a retailer responsible for a manufacturer's warranty it only passes along?

Generally not, if the retailer does no more than sell the product and the warranty identifies the manufacturer as the warrantor. The seller's own conduct can change that result, because other actions and written and oral representations of the supplier in connection with the offer or sale of a warranted product may obligate that supplier under the Act.

Does a general satisfaction-guaranteed policy have to be labeled full or limited?

No, if it is a general policy on customer satisfaction that is not subject to any specific limitation, though it remains subject to FTC enforcement. Such statements remain subject to the Act's enforcement provisions and to Section 5 of the FTC Act. The exemption does not reach policies with an express limitation of duration or a limitation of the amount to be refunded.

Can a warrantor deny a claim when an outside shop's work caused the damage?

Yes, if the warrantor can demonstrate that the defect or damage was caused by the unauthorized article or service. What the Act bars is conditioning the warranty itself on authorized service or parts, so a provision such as “This warranty is void if service is performed by anyone other than an authorized ‘ABC’ dealer” is prohibited where the service or parts are not covered by the warranty.

Can the FTC collect money from a business for a first violation of the Warranty Act?

In the 2022 Harley-Davidson matter, the Commission's position was that the Warranty Act authorizes only injunctive relief for first-time violations, not monetary remedies for injured consumers. Earlier matters did end in payments, but those orders also addressed FTC Act deception allegations, such as Gateway's advertising about refunds of shipping charges.

Can a consumer warranty require binding arbitration?

The FTC's position is that it cannot, though federal appellate courts have disagreed. FTC regulations implementing the Act have barred arbitration agreements in consumer warranties that would result in binding decisions since 1975. The FTC reaffirmed that view in a final rule it issued in 2015. Commissioner Ohlhausen, dissenting in 2015, noted that two federal appellate courts had held that the Act does not prohibit binding arbitration.

WarrantiesAct or rule

Magnuson-Moss Warranty Act

Berkeley Robinson, Managing Attorney at Robinson Law Firm PLLC

Author

Berkeley Robinson, Esq.

Managing Attorney, Robinson Law Firm PLLC

Berkeley has served as the go-to counsel for many scaling businesses in a transactional and litigation management capacity. Before becoming an attorney, Berkeley grew sales teams, ran online marketing campaigns, and did everything else an entrepreneur does—and still does today as the founder of two online businesses.

Definition

Magnuson-Moss Warranty Act is the federal statute, enforced by the FTC, that regulates consumer warranties and the procedures used to resolve warranty disputes. Source: Complaint, In re MWE Investments, LLC (FTC Aug. 11, 2022) Its duties fall on suppliers who offer written warranties on consumer products. Source: 16 C.F.R. § 700.3

Key legal rules

A business covered by the Magnuson-Moss Warranty Act has these duties:

No warrantor may condition the continued validity of a warranty on the use of only authorized repair service and/or authorized replacement parts for non-warranty service and maintenance, other than an article of service provided without charge under the warranty or unless the warrantor has obtained a waiver under section 102(c) of the Act. Source: 16 C.F.R. § 700.10
Warranty language that implies to a consumer acting reasonably in the circumstances that warranty coverage requires the consumer's purchase of an article or service identified by brand, trade or corporate name is similarly deceptive. Source: 16 C.F.R. § 700.10
Written warranties on consumer products manufactured after July 4, 1975, and actually costing the consumer more than $10, excluding tax, must be designated either “Full (statement of duration) Warranty” or “Limited Warranty”. Source: 16 C.F.R. § 700.6
For products costing more than $15, a warranty must disclose, clearly and conspicuously in a single document in simple and readily understood language, a clear description and identification of the products, parts, characteristics, components or properties it covers and, where necessary for clarification, excludes. Source: Complaint, In re Harley-Davidson Motor Company Group, LLC (FTC)
The seller of a consumer product costing more than $15 that is sold with a written warranty must make the text of the warranty readily available for examination by prospective buyers, either by displaying it in close proximity to the product or by furnishing it on request before sale and posting signs advising buyers that it is available. Source: Complaint for Permanent Injunction, Monetary Judgment, and Other Relief, FTC v. Vroom, Inc., No. 4:24-cv-2496 (S.D. Tex.)
A warrantor may not disclaim implied warranties, because the Act contains a prohibition against the disclaimer of implied warranties. Source: Analysis of Proposed Consent Order to Aid Public Comment, In re Gateway 2000, Inc. (FTC)
The remedy under a full warranty must be provided to the consumer without charge, and if the warranted product has utility only when installed, a full warranty must provide the installation without charge. Source: 16 C.F.R. § 700.9 A full warrantor may still impose a duty to remove, return, or reinstall where it can demonstrate that the duty meets the standard of reasonableness. Source: 16 C.F.R. § 700.9
A violation of the Warranty Act, or a rule under it, constitutes a violation of Section 5(a)(1) of the Federal Trade Commission Act. Source: Complaint, In re MWE Investments, LLC (FTC)

For the sake of space, this page lists only the primary rules related to this term that most businesses should follow. More may apply to your situation, and your unique facts affect how they apply.

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Why these rules exist

The Act's broad purposes are to improve the adequacy of warranty information available to consumers, and thereby facilitate consumer choice, to prevent deception, and to improve competition in the marketing of consumer products. Source: Complaint, In re MWE Investments, LLC (FTC Aug. 11, 2022) The pre-sale availability duty serves the first purpose directly, because it ensures that consumers have complete and accurate warranty information available prior to sale so that they can make fully informed purchasing decisions. Source: Complaint for Permanent Injunction, Monetary Judgment, and Other Relief, FTC v. Vroom, Inc., No. 4:24-cv-2496 (S.D. Tex.)

The tying prohibition addresses a different failure. When the Commission's then-Chairman supported the provision in 1973, the concern was a warranty used to tie supplementary products or services to the warranted product, which leaves the consumer in the undesirable posture of losing his warranty protection if he purchases the supplementary items from another and perhaps less expensive source, even if he does so in complete ignorance of the warranty's provisions. Source: Statement of Chair Lina M. Khan, In the Matter of Deere & Company, Commission File No. 2110191 (Jan. 15, 2025)

Enforcement examples

In re Renault U.S.A., Inc. (new-car limited warranty)

In re Renault U.S.A., Inc., FTC Dkt. C-2960, Order, Appendix A (Apr. 26, 1979)

Renault's limited warranty ran 12 months or 12,000 miles, with additional drive-train coverage for 24 months or 24,000 miles. Source: In re Renault U.S.A., Inc., FTC Dkt. C-2960, Order, Appendix A (Apr. 26, 1979) Yet its implied-warranty paragraph limited implied warranties on the drive train to 12 months or 12000 miles, which is shorter than the written drive-train coverage. Source: In re Renault U.S.A., Inc., FTC Dkt. C-2960, Order, Appendix A (Apr. 26, 1979)

Outcome. Renault agreed with the FTC to write owners a corrective letter, which told them the Act does not allow implied warranties to run for a period shorter than the express written limited warranty. Source: In re Renault U.S.A., Inc., FTC Dkt. C-2960, Order, Appendix A (Apr. 26, 1979) The same letter told owners that, because of Renault's error, they had drive-train implied warranties for as long as four years, depending on state law. Source: In re Renault U.S.A., Inc., FTC Dkt. C-2960, Order, Appendix A (Apr. 26, 1979)

In re David F. McCready (Rust Evader corrosion device)

Analysis of Proposed Consent Order to Aid Public Comment, In re David F. McCready (administrative complaint issued Aug. 30, 1995)

The complaint alleged that RustEvader Corporation and McCready violated Section 102(c) of the Magnuson-Moss Warranty Act with a warranty that was conditioned on the consumer having the Rust Evader inspected every two years and that required the consumer to pay for the inspection. Source: Analysis of Proposed Consent Order to Aid Public Comment, In re David F. McCready (FTC)

Outcome. The proposed consent order would prohibit McCready from future violations of Section 102(c). Source: Analysis of Proposed Consent Order to Aid Public Comment, In re David F. McCready (FTC) It would also require McCready to pay $200,000 to fund redress for consumers who purchased the device. Source: Analysis of Proposed Consent Order to Aid Public Comment, In re David F. McCready (FTC)

In re BMW of North America, LLC (MINI passenger cars)

In re BMW of North America, LLC, Final Decision and Order (Oct. 21, 2015)

The FTC's complaint alleged that language in the MINI Warranty Statement conditioned warranty coverage on the consumer's use of genuine MINI parts and MINI dealers for maintenance and repair work. Source: Analysis of Proposed Consent Order To Aid Public Comment, In re BMW of North America, LLC, FR Doc. 2015–06903 (Mar. 26, 2015) In one alleged instance, owners had to show regular maintenance by having a MINI dealer place a stamp in the warranty booklet before a warranty claim would be approved. Source: Analysis of Proposed Consent Order To Aid Public Comment, In re BMW of North America, LLC, FR Doc. 2015–06903 (Mar. 26, 2015)

Outcome. The final order bars BMW from conditioning any written or implied warranty on the use of an article or service identified by brand, trade, or corporate name, unless the Commission has granted a waiver beforehand. Source: In re BMW of North America, LLC, Final Decision and Order (FTC Oct. 21, 2015) The order also required BMW, within 60 days of entry, to send a notice by first class mail to MINI owners still covered by the limited warranty whose Service and Warranty Information Statement contained the challenged statements. Source: In re BMW of North America, LLC, Final Decision and Order (FTC Oct. 21, 2015)

In re MWE Investments, LLC (Westinghouse portable generators)

In re MWE Investments, LLC, Decision and Order, Docket No. C-4774 (Aug. 11, 2022)

MWE Investments offered purchasers of its portable generators a limited written warranty that, according to the complaint, conditioned coverage on the use of genuine MWE Investments parts and accessories. Source: Complaint, In re MWE Investments, LLC (FTC Aug. 11, 2022) The warranty's exclusions, for instance, reached generators that use non-MWE replacement parts. Source: Complaint, In re MWE Investments, LLC (FTC Aug. 11, 2022) The complaint further alleged that MWE did not provide genuine parts or accessories free under the warranty and did not seek a waiver from the FTC. Source: Complaint, In re MWE Investments, LLC (FTC Aug. 11, 2022)

Outcome. The order permanently restrains and enjoins MWE from conditioning a warranty for a consumer product costing more than five dollars on the use of a brand-identified article or service, absent a free provision or a Commission waiver. Source: In re MWE Investments, LLC, Decision and Order, Docket No. C-4774 (FTC Aug. 11, 2022) The order also requires MWE to state in any warranty that taking the product to an unaffiliated repair shop will not void the warranty and that using third-party parts will not void it. Source: In re MWE Investments, LLC, Decision and Order, Docket No. C-4774 (FTC Aug. 11, 2022)

In re Harley-Davidson Motor Company Group, LLC (motorcycles)

In re Harley-Davidson Motor Company Group, LLC, Decision and Order, Docket No. C-4778 (Oct. 21, 2022)

The complaint alleged that Harley-Davidson's limited written warranty conditioned coverage on the use of genuine Harley-Davidson parts and accessories. Source: Complaint, In re Harley-Davidson Motor Company Group, LLC (FTC) It also alleged that Harley-Davidson did not provide genuine replacement parts free under the warranty and did not seek a waiver from the FTC. Source: Complaint, In re Harley-Davidson Motor Company Group, LLC (FTC) A separate count alleged that the warranty failed to set out fully what is covered and excluded, and instead directed owners to check with a local dealer to understand the coverage. Source: Complaint, In re Harley-Davidson Motor Company Group, LLC (FTC)

Outcome. The order permanently restrains and enjoins Harley-Davidson from issuing a written warranty for a consumer product costing more than fifteen dollars that fails to disclose clearly and conspicuously in a single document what the warranty covers and, where needed, excludes. Source: In re Harley-Davidson Motor Company Group, LLC, Decision and Order, Docket No. C-4778 (FTC Oct. 21, 2022) The order also requires Harley-Davidson to notify eligible customers by mail or email with a notice. Source: In re Harley-Davidson Motor Company Group, LLC, Decision and Order, Docket No. C-4778 (FTC Oct. 21, 2022)

FTC v. Vroom, Inc. (online used-vehicle seller)

FTC v. Vroom, Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief, No. 4:24-cv-2496 (S.D. Tex.)

The complaint alleges that Vroom offered a written warranty with used vehicles costing more than $15 and failed to make its text readily available for examination by prospective buyers. Source: Complaint for Permanent Injunction, Monetary Judgment, and Other Relief, FTC v. Vroom, Inc., No. 4:24-cv-2496 (S.D. Tex.) According to the complaint, Vroom presented the warranty only in the deal package sent to finalize the transaction, after consumers had chosen a vehicle, provided personal documents and information, and paid a deposit. Source: Complaint for Permanent Injunction, Monetary Judgment, and Other Relief, FTC v. Vroom, Inc., No. 4:24-cv-2496 (S.D. Tex.)

Outcome. The FTC asked the court to enter a permanent injunction against future violations of the Pre-Sale Availability Rule, among other rules. Source: Complaint for Permanent Injunction, Monetary Judgment, and Other Relief, FTC v. Vroom, Inc., No. 4:24-cv-2496 (S.D. Tex.)

In re Gateway 2000, Inc. (personal computers)

Analysis of Proposed Consent Order to Aid Public Comment, In re Gateway 2000, Inc.

The complaint alleged that Gateway violated the Disclosure Rule and the Pre-Sale Rule issued under the Act. Source: Analysis of Proposed Consent Order to Aid Public Comment, In re Gateway 2000, Inc. (FTC) It also alleged that Gateway's warranties disclaimed all implied warranties, contrary to the Act's prohibition. Source: Analysis of Proposed Consent Order to Aid Public Comment, In re Gateway 2000, Inc. (FTC)

Outcome. Gateway agreed to a one-time payment of $289,429.05 to the U.S. Treasury to settle allegations that it falsely and deceptively advertised that a consumer's shipping charges would be refunded under its 30-day money-back guarantee. Source: Analysis of Proposed Consent Order to Aid Public Comment, In re Gateway 2000, Inc. (FTC) The draft order separately prohibits Gateway from failing to comply with the Disclosure Rule and from failing to comply with the implied-warranty provision. Source: Analysis of Proposed Consent Order to Aid Public Comment, In re Gateway 2000, Inc. (FTC)

Exposure

The usual outcome of an FTC warranty case is an injunction with notice and reporting duties. The MWE Investments order permanently restrains and enjoins the company from the conduct it covers. Source: In re MWE Investments, LLC, Decision and Order, Docket No. C-4774 (FTC Aug. 11, 2022) The Harley-Davidson order does the same. Source: In re Harley-Davidson Motor Company Group, LLC, Decision and Order, Docket No. C-4778 (FTC Oct. 21, 2022) The Harley-Davidson order terminates 20 years from the date of its issuance, or 20 years from the most recent date a complaint alleging a violation of the order is filed in federal court, whichever comes later. Source: In re Harley-Davidson Motor Company Group, LLC, Decision and Order, Docket No. C-4778 (FTC Oct. 21, 2022) The MWE Investments order has the same 20-year structure. Source: In re MWE Investments, LLC, Decision and Order, Docket No. C-4774 (FTC Aug. 11, 2022) The BMW order terminates on October 21, 2035, or twenty years from the most recent date that a complaint alleging a violation of the order is filed in federal court, whichever comes later. Source: In re BMW of North America, LLC, Final Decision and Order (FTC Oct. 21, 2015)

Because a violation of the Warranty Act, or a rule under it, constitutes a violation of Section 5(a)(1) of the FTC Act. Source: Complaint, In re MWE Investments, LLC (FTC) Money exposure depends on which statute the Commission proceeds under. In the Harley-Davidson matter, the Commission told a commenter that the Warranty Act only grants it authority to seek injunctive relief for first-time violations, and not monetary remedies for injured consumers. Source: FTC Response to Public Comment, In re Harley-Davidson Motor Company Group, LLC, FTC File No. 212-3140 (Oct. 21, 2022) Commissioner Chopra made a related point in 2021, observing that it is not simple for the FTC and state attorneys general to obtain civil penalties or other monetary relief from large firms that violate the law. Source: Prepared Remarks of Commissioner Rohit Chopra Regarding a Motion to Adopt a Policy Statement on Repair Restrictions Imposed by Manufacturers and Sellers (July 21, 2021)

Some matters nonetheless ended in payments, in orders that also addressed FTC Act deception allegations. Gateway agreed to pay $289,429.05 to the U.S. Treasury. Source: Analysis of Proposed Consent Order to Aid Public Comment, In re Gateway 2000, Inc. (FTC) The proposed order in the McCready matter would require a $200,000 consumer redress fund. Source: Analysis of Proposed Consent Order to Aid Public Comment, In re David F. McCready (FTC) In its Vroom complaint, the FTC asks the court to award monetary and other relief within its power to grant. Source: Complaint for Permanent Injunction, Monetary Judgment, and Other Relief, FTC v. Vroom, Inc., No. 4:24-cv-2496 (S.D. Tex.)

FAQs

1.Complaint. Complaint, In re MWE Investments, LLC (FTC Aug. 11, 2022)
2.16 CFR 700.3. 16 C.F.R. § 700.3
3.16 CFR 700.10. 16 C.F.R. § 700.10