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FTC Puts Manufacturers on Blast Over Shady Warranty Policies

By George Khoury, Esq. on April 13, 2018 | Last updated on March 21, 2019

When it comes to consumer electronics, like computers, smart phones, or pretty much anything that holds a charge, even if it rolls on four wheels and is powered by fossil fuel, the FTC has a strong warning for manufacturers: Don't void warranties over third party repairs.

While a manufacturer can void a warranty if a third party, or product owner's own, repair is faulty, it can't void a warranty just by sheer virtue of the fact that an "unauthorized" person worked on the product, or if non-OEM parts were used for the repair. Although the FTC did not name names, at least not yet, the web-sleuths over at Ars Technica were able to put words into a Google searchbar and figure it out.

Who's Who of Bad Warranty Policies

The FTC provided some quoted language as examples, and attempted to anonymize the examples. However, as Ars Technica pointed out, the language matched up perfectly to language in the warranties for Hyundai, Nintendo, and Sony. Notably, Ars was only able to name three of the six major companies that the FTC contacted.

As for Hyundai, their warranty required that all replacement parts be official Hyundai parts. Nintendo asserted that their warranty would be voided simply for using their products with other products not licensed or sold by them. And Sony, makers of the Play Station, Play Station 2, Play Station 3, and Play Station 4, apart from winning a gold star in creative naming, were warned that voiding their warranty if the "warranty sticker" is broken is illegal.

Of Defiance and Compliance

As the FTC warns, if the companies do not change their policies within 30 days, the agency may take legal action. It explained that the policies and warranties were easily found on the companies' websites, and that they will be checking again after the warning period expires.

Companies that did not receive warning letters from the FTC may want to take a look at whether any of their policies look like the ones described by the FTC in order to avoid a potential action.

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