What is the Magnuson-Moss Warranty Act of 1975 and Why it is Powerful for Consumers

Consumers are often victims of fraud or misrepresentation in the quality of consumer (personal, family or household) goods and in how they are intended to perform. To protect consumers, federal legislators passed the Magnuson-Moss Warranty Act (Act) in 1975.

Warranties are promises by sellers that the material or workmanship is defect-free or meets a certain level of performance over a certain time. If not, the seller promises to repair or replace the product or provide a refund.

Congress wanted to encourage sellers to provide written warranties to assure consumers and to foster competition for the best products. Although sellers are not required to provide written warranties, many consumers will be skeptical of products that do not have one. Further, Congress wanted all parties to have a quicker and less costly method of resolving disputes and to allow consumers an easier path to a remedy for breach of warranty lawsuits in the courts.

If a company does provide a written warranty, it must comply with the Act. There are 3 basic requirements:

1. Designate the warranty as limited or full2. State certain specified information in the language that is comprehensive but clear and easy to read and understand3. Ensure that warranties are available for consumers to read before buying the product in stores where the products are sold

A warrantor must also describe:

 The legal remedies available

 Time under which its obligations will be performed

 The time it will perform once notice of defect or malfunction is received

 Properties of the product that are not covered

The Act makes deceptive language inapplicable such as promising maintenance or repair service where none is given or which the seller had no intention of providing.

Disclaimers and Modifications

The Act does not apply to products sold for commercial purposes or for resale. Any written warranty cannot modify an implied warranty, which applies to all consumer products. For instance, an implied warranty of merchantability assures that the product is guaranteed to work for its intended purposes. WVa § 46A-6-107 does not allow sellers to avoid this by a disclaimer advising the buyer that the product is sold “as is” unless it is for resale.

If the warrant is designated as “limited,” the seller can limit the warranty to a certain time such as 2-years. Full warranties may not be time-restricted or limited.

Tie-In Sales not Permitted

Tie-in sale provisions are not permitted. These are clauses wherein the seller requires that you buy an additional item to be used with the subject product or that it only be serviced by its own factories or else the warranty is voided. It can state that its warranty does not cover repairs poorly done at facilities other than its own. A seller can also use a tie-in provision so long as it first convinces the Federal Trade Commission (FTC) that a tie-in product is necessary for the proper performance of the product.

Remedies

The Act makes it easier for consumers to seek remedies. However, a seller can require arbitration or other informal resolution measures before a lawsuit may be filed. If no informal resolution is achieved, the consumer may then file for breach of the warranty in federal or state court though major cases are often brought as federal class-action lawsuits. A prevailing plaintiff may recover reasonable attorney’s fees and costs.

The FTC has a Dispute Resolution Rule comprising certain criteria if a seller has an informal dispute mechanism such as arbitration. The arbitration entity must adhere to the following:

 Have written procedures

 Be free of charge

 Inform the parties when in receipt of a dispute claim

 Allow parties to present supporting documents and rebut each other's points

 Be adequately funded and staffed so as to resolve disputes quickly

 Resolve disputes by written opinion within 40 days of submission of a dispute

 Be nonbinding unless the parties both agree to be bound

 Keep complete records

 Be audited annually

If you have a question breach of warranty for goods you’ve purchased, give us a call. At Wolfe, White & Associates we know the law and how to help protect consumers. Call us at 304-245-9097 for a free consultation.

Steven S. Wolfe, Esq.swolfe@wolfelawwv.com