FTC Warns Manufacturers That 'Warranty Void If Removed' Stickers Are Illegal
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My father used to own a computer repair shop. Some of the computers were assembled by us, some were not. After a service was performed, there was a warranty (two months if memory servers).
What would happen is that people would pick their computer up, open it, do some stupid stuff, and then come back and try to claim the warranty. Best one was some guy that installed the CPU in a incorrect orientation on purpose, to see if it would "improve performance". Burned out the CPU and motherboard and tried to blame us. This was back at the Pentium Overdrive days.
So we started adding those stickers in the case itself. People would be free to remove them, but we would not honor any warranties if so.
As a consumer, I know it sucks. But I do know the other side, people will do really stupid things and then try to get others to clean up after them.
If someone performs their own oil change on their car and then a wheel falls off the manufacturer can't just say that you popped the hood open so the warranty is void. I'm not a big fan of car analogies but cars were the main reason this law was passed in the first place.
In principle this law applies to any purchase over $15 that has a written warranty agreement, but in reality most companies feel free to ignore it because few customers are even aware of the law and even fewer are going to bother going to small claims court over anything less than a few thousand dollars.
https://en.m.wikipedia.org/wiki/Survivorship_bias
No comment on whether things really are becoming lesser quality, but just so you know this exists.
Especially that products should last "as long as you expect them to last".
Take TVs for example - if you buy a 80" OLED for $500, it might be expected it'll only last 12-18 months. However if you purchased a 50" 4k TV for a few thousand dollars, the implied warranty might be 5+ years as it's a product of reasonable quality and cost.
The best bit about it is that if there is a major fault with the product, the remedies are: 1) Refund, 2) Replacement, or 3) Repair. And it is the consumer/purchaser's choice.
So if you purchased a TV for $5000 and then a fault causes it to blow up 5 years later, you can ask to get a full refund, even though the current street value might only be a few hundred dollars.
The benefit of this is it forces manufacturers to actually build quality products, knowing they are liable for full refunds if they fail.
It reduces the chance that they'll build "planned obsolescence" using cheap parts that might only last 12 months and 1 day (1 day past their "warranty").
A longer explanation is here: https://www.accc.gov.au/consumers/consumer-rights-guarantees...
That doesn't seem quite fair to the manufacturer to me. You got 5 years use out of the TV, even if it didn't last as long as you expected you still got value out of it and shouldn't deserve a full refund at that point.
That's exactly why the law was changed. The balance of power was initially on the manufacturer's side.
All they had to do was say "1 year warranty" and everyone was out of luck if/when it failed. Consumers were required to upgrade and buy a replacement product.
Now the balance of power is on the consumer's side.
Most of the time TVs will last 5+ years, but in the case where it doesn't, and lots fail early due to a manufacturing issue - then the cost (is rightly) put back on to the manufacturer.
It forces them to stand by their product, ensuring the quality is up to a good standard. They must use quality long lasting components and make sure their testing process is up to scratch. Otherwise they will be up for the cost to remedy that.
If they make sure their product doesn't fail early, the cost is minimal to them. So this changes their mindset in terms of the manufacturing and design processes.
You’re not “out of luck” when it fails, as it would be your fault for buying a shoddy (nonessential) product.
I paid $5000 for a good TV for 5 years. If after 2.5 years it breaks and they refund me $2500, which I am then forced to use to buy a shitty $2500 TV that will only last me 2.5 years, then effectively I paid $5000 for 2.5 years of good TV followed by 2.5 years of shitty TV, which is unfair to me.
If instead I take the $2500 and add my own $2500 to buy a new good TV for 5 years, then they instead switched the deal on me to 7.5K for 7.5 years, which is not what I originally signed up for, so it becomes an unfair bait and switch.
Not saying regulation is best answer here, just that the issue is more complex and "free market" likely isn't 100% solution.
My point was specifically a $500 TV that was 80" and OLED.
If all the current models with that specification are up around $5,000 - $10,000 or higher, and there is a model that sells for 1/10th the average price. An argument could be made that you could expect that might not last as long as one ten times higher.
The law is intentionally vague about time limits. "One could expect that a TV that costs ten times less than all the other competition, may not be built to the same quality as all the others which are much more expensive". There still isn't a specific time limit though.
And if it did fail within 2 years then you could probably make the argument that you expect a TV to last longer than 2 years.
To put the argument a different way - If you compare $5 kitchen knives at the local discount store vs $250 Japanese steel chef knives. You'd expect the $200 knives to last longer. As to how much longer, that's up to the person making the warranty complaint.
I also don't fully understand the need for laws to fix the "planned obsolescence" issue - if a manufacturer's products consistently broke shortly after the warranty expired (well before expected end of lifetime), why would anyone continue to purchase from that crap manufacturer...
It's expensive(ish) here anyway, mostly due to lack of competition. A country of 25m people surrounded by water, we're stuck with local manufacturers or importing (without local warranty).
> I also don't fully understand the need for laws to fix the "planned obsolescence" issue - if a manufacturer's products consistently broke shortly after the warranty expired (well before expected end of lifetime), why would anyone continue to purchase from that crap manufacturer...
Because maybe that's all the person can afford.
There's an information asymmetry - if a previously-reputable manufacturer starts cheaping out on quality to save money, consumers have no way of knowing until a few years later. And unfortunately this seems to be a common pattern.
What would hapoen to the disposible plates and utensils industries?
No it wouldn't? The law is that the product is required to last as long as the customer reasonably expects it to last, if it's explicitly advertised as lasting for 2 years then the customer can't reasonably expect it to last longer.
Not knowing upfront, for example. Assuming their one failure was simply unlucky. Pessimism (deciding all manufacturers design products this way). Lack of money. Seldom used product. Lack of selection. Assuming that it was that one product from manufacturer x instead of their entire line of 200+ products (and of course a few will miss). Researching and realizing product B was really manufactured by Y instead of X, unlike most of their other product lines. Realizing product B was made to be cheaper to sell at Walmart, so you weren't getting the "good" brand you thought you were. Negative review overload (all of them have faults, it seems).
So the people who buy first should just get shafted? That's a license to manufacturers to bring out as crappy products as possible, then just change brand name or do a buyout or something every few years. If you say it's ok to sell rubbish products, then that's what will happen. The Chinese consumer market is a prime example of this, quality control and consumer rights over there are practically nonexistent. The consumer market is a cesspit of scams, fakes, substandard and dangerous products.
Regulation in a democracy is actually a sign of a functioning free market. It's just consumers (voters) getting together and exercising their rights to negotiate terms with suppliers who otherwise would hold all the cards. Markets depend on fair access to information to function. Product standards simply ensure consumers know and understand the quality of the product they are buying, which as individuals we don't all have the ability or resources to determine. That's why commodities markets, one of the cornerstones of the free market economic system, are based on trading highly standardized goods because that's the only way to scale up trading volumes and market efficiencies at the level they operate at.
I'm surprised; in NZ it is the seller's choice which of the three to provide.
So I’m wondering how this law addresses this.
1. (serious) What recourse do customers have when the company says your warranty is void because you broke the seal? Because the tech on the phone isn't going to have the power to do anything, he's reading from the binder. (Edit really asking: I'm sure someone here will already know the formal complaint process) /edit
2. (sarcastic) How long before the companies get the law changed de jurie instead of just de facto?
Welcome to 21st century America.
Which is still more plaintiff-friendly than any jurisdiction in Europe.
https://www.washingtonpost.com/business/supreme-court-backs-...
Large corps are unlikely to even show up, meaning you win by default.
Not true - any time you take a big corp to small claims court, they're going to send a lawyer to represent them. You are suing an entity, not a person, and the entity will pick who represents them.
[1] http://leginfo.legislature.ca.gov/faces/codes_displaySection...
The Small Claims court is specifically designed to not be handled by lawyers, even for business and "large corporations" does it does not matter if they have a laywer on staff unless the judge waives the rule the Corporation must authorize a non-lawyer to act as it represnative for the purposes of Small Claims.
That could be any employee approved by the Board of Directors, so no they would not send the CEO, but they likely would send a person who is viewed as an expert or have detailed information to defend the corporation against the claim in a Small Claims environment which is far far far far less formal than a Normal Court room.
"Unless a judge grants permission, Attorneys and paralegals are excluded from appearing or participating with the plaintiff or defendant in a small claims suit."
* If you are suing an LLP, you are taking an action against an individual member of the partnership, thus they can appear as the defendant. Though 12.40.080 can be read as excluding attorneys regardless of their status as the defendant, I believe that has to be read in conjunction with the notice that the court issues under 12.40.060. The defendant is "direct[ed] and requir[ed ...]to appear personally in the small claims department", thus granting the permission described in 12.40.080(1). Even if that is not the case, it would seem inequitable to prevent the defendant appearing, thus I would expect the judge to grant permission to appear.
* If you are suing a larger company that ISN'T operating as an LLP, it would seem likely that they would have staff beyond the attorneys/legal paraprofessionals, thus they can represent the company.
* If you are suing a corporation that is truly made up of 100% legal professionals, that seems to be the case where things get somewhat murky, though that really does appear to be a corner case. The restriction in 12.40.080 is quite clear: "A corporation may not be represented by an attorney-at-law or legal paraprofessional", and I suspect it gets into the minutia of interpretation that I am not equipped to determine. However, I do note that 12.40.060 requires the defendant to appear, not _necessarily_ participate in the hearing. Thus, perhaps the hearing can proceed WITHOUT representation from the defendant, allowing the judge various options to achieve a equitable result (transfer the case to the district court where the restriction is lifted, issue a judgement if the facts are clear or it seems the company setup is deliberate in order to try and avoid the small claims court, summon employees as witnesses -- so even though they are not representing the company the facts of the claim can be established, make an order permitting a legal professional to represent the company--depends on the extent of judicial powers/making an equitable case to overrule the restriction etc.).
Note that this is just based on reading through the linked laws, and is likely wrong/inaccurate in some ways. However, it does appear that a law firm would have options beyond a default judgement.
12.40.080: http://app.leg.wa.gov/RCW/default.aspx?cite=12.40.080
12.40.060: http://app.leg.wa.gov/RCW/default.aspx?cite=12.40.060
> A corporation may not be represented by an attorney-at-law or legal paraprofessional except as set forth in RCW 12.40.025.
12.40.025 covers the transfer of cases from the district court to small claims, so for claims starting at the small claims level, the restriction appears pretty tight.
http://apps.leg.wa.gov/RCW/default.aspx?cite=12.40&full=true
For example, in California, "a corporation may appear and participate in a small claims action only through a regular employee, or a duly appointed or elected officer or director, who is employed, appointed, or elected for purposes other than solely representing the corporation in small claims court."
http://leginfo.legislature.ca.gov/faces/codes_displaySection...
What they can't do is send a lawyer employee whose sole job is small-claims-court litigation.
> (m) Nothing in this section shall operate or be construed to authorize an attorney to participate in a small claims action except as expressly provided in Section 116.530.
Here is the relevant part of section 116.530 [1]:
> (a) Except as permitted by this section, no attorney may take part in the conduct or defense of a small claims action.
> (b) Subdivision (a) does not apply if the attorney is appearing to maintain or defend an action in any of the following capacities:
> (1) By or against himself or herself.
> (2) By or against a partnership in which he or she is a general partner and in which all the partners are attorneys.
> (3) By or against a professional corporation of which he or she is an officer or director and of which all other officers and directors are attorneys.
So...it looks like for a corporation that is not a professional corporation, they cannot send an attorney even if that attorney is a regular employee.
That does raise an interesting question. What happens if a corporation is not a professional corporation, but every officer, director, and employee is an attorney? They would not fall under the 116.530(b) exception, and so would seem to all be excluded uner 116.540(m).
[1] http://leginfo.legislature.ca.gov/faces/codes_displaySection...
It's not so great for a $150 claim when you take into account the filing fee and the time it takes.
Can you reliably get the fee back? Still a giant hassle.
If that fails, you take your paper trail to small claims court. This can be challenging in different circumstances to serve the other party but courts can be pretty liberal here in California. I was watching cases one day and the person had served Microsoft by giving the summons to a Microsoft Store employee who worked in a kiosk at the mall. Microsoft hadn't shown up so they won their default judgement and went to the next step which was to put a judgement lien on the corporation's assets. (long before that actually happens their legal team will pay you your damages).
You could concurrently file a complaint with the FTC. It won't give you any money but it will add on to other complaints and that will eventually get action (like this article). Getting a registered mail letter from the FTC tends to get the attention of the right people.
As for your sarcastic question it is isn't that manufacturers have tried to get the laws changed, they have been unsuccessful. Support the 'right to repair' efforts when you run into them, talk to your representatives if you get a chance. That will keep the pressure to maintain the status quo.
Do try to avoid the term "lawsuit", though. If you do, any customer service rep that didn't sleep through training will hang up, leaving you free to converse with their legal department... Through snail mail.
Terminating that call is the civil equivalent to: "I have nothing to say officer, I want my lawyer." The customer support reps aren't being paid for their profound understanding of what to say without opening up the firm to liability. They are being paid to shut up, and fob you off to the legal department, in response to threats of legal action.
I've been involved in several issues where legal action was a valid threat. I can think of 5 occasions off the top of my head. These involved corporations and none were handled as you described and I've dealt with local government and corporations. Most were handled without court. All were dealt with acceptably in my favor.
Your suggestion would have wasted everyone's time and their money. It is simultaneously fictional and terrible advice. I promise you that your manager wants the option to handle these situations before they blow up into disasters
There's a reason why all businesses tend to some of the same solutions, because if you don't, you fail.
Once you escalate to that point, we took it seriously, and you don’t speak over the phone to a minimum wage representative. If someone threatened legal action over the phone I would tell them management will be in touch with legal details, and terminate the call immediately.
I’m not saying you won’t get a satisfactory resolution out of it, but it will almost certainly end the call immediately.
At that point, the onus is on management/legal to decide whether the threat is credible or not, but you don’t have a slightly above minimum wage kid getting everyone in trouble then.
I would expect a similar response from almost any CS representative for most companies.
Is it still possible for a manufacturer to refuse to honor a warranty if that is the case, namely that the device was damaged by a botched repair, and this just says that they can't make that determination based on a sticker alone?
An analogy with cars, where the same law already is being applied, will work. (Do we still do car analogies in 2018? And on sites which aren't Slashdot?) Suppose you get your brakes changed at some place which is well-known for brake repair. Then, later, your engine dies but the manufacturer's warranty should still be valid. Then, if the manufacturer wants to claim that the third-party brake repair is the cause of the engine failure (and thus that the warranty is invalidated), the burden of evidence is on them.
They will need to prove the failure was more likely than not caused directly by aftermarket part, I am actually surprised they are taking it that far instead of of just offer some kind of fractional settlement, i.e covering 80% of the repair or something.
Does anyone else read this to imply that Tesla got a letter?
This anecdote is only relevant in the sense that the sticker might not be on the hood of the car; remote control for AV system or keyless entry or tire pressure monitoring gadgets inside the wheels are definite possibilities.
They do not take very kindly to people even daring to connect to the diagnostic port on their cars, literally calling people on the phone (because of course their servers log everything you ever do with the car and they know who owns each car) and telling them to stop: https://teslamotorsclub.com/tmc/posts/610152/
It does not bode well for any sort of attempt to repair the things.
Of course, that's an easy one to answer. Tesla owns each car.
Not quite true, even if they sometimes act like it, but a lot of companies do try to make it this way. For instance, CHEP pallets: https://en.wikipedia.org/wiki/CHEP
Other than that, it's been a mixed bag. Personally I love what Musk has accomplished with SpaceX, but Tesla is more worrisome. The autopilot thing has been handled badly, their treatment of employees is apparently not stellar, and they seem to view their customers similarly to how Apple views theirs, only worse.
Time will tell how it all plays out. I would hesitate to call the odds either way, though; that is one unpredictable CEO.
Bankruptcy most likely, once the big boys get off their ass Telsa is done, at least as a Auto manufacturer.
5 years tops before they are on the verge, 10 years before they are either out of the Automobile Manufacturing market (licensing their name to one of the Big Car Companies who actually make the cars) or are bankrupt
Their Future may be in Technology (battery, Auto Pilot, etc) that they can sell to other companies, unless they refuse to do that in which case Bankruptcy
Hope you know a good electrical engineer.
Dealers were pressuring Manufacturers to make rules to prevent owners from allowing 3rd party independent mechanics from serving the cars, dealership (aka stealerships) saw the extreme profit that can be made on servicing thus wanting to have a captive market to ensure high profits with no competition.
They used the same augments "well these are complex machine and you just can have any old moron on the street working on them"
That argument failed decades ago, and it should remain a failure today. Telsa should not be allowed to lock out independent repair shops under the guise of "well these are complex machines and you need to be Electrical Engineer to understand them"
If only it was just Tesla, manufacturers of consumer electronics have gotten customers to buy this hook, line and sinker. The comments on this story and others related to third party repair services found on /r/Apple are filled with such anti-consumer garbage.
You are correct, that Tesla 'can' just refuse to follow the law. They might even be able to get away with it. In the same way that I can just go kill someone, and I might be able to get away with it too.
> "Unless warrantors provide the parts or services for free or receive a waiver from the FTC, such statements generally are prohibited by the Magnuson-Moss Warranty Act, a law that governs consumer product warranties. Similarly, such statements may be deceptive under the FTC Act."
It seems this rule only applies if the warranty services are not free. If the warranty covers free repair, they are still allowed to deny said free warranty if tampering is evident.
Extreme overclocking of the sort that can break your hardware should require soldering or external re-flashing of a firmware ROM.
You may also notice that I'm not advocating for "legislating engineering decisions"; though there are plenty of situations where engineering decisions obviously should be determined by legislation, this is more a question of after the fact liability to be worked out by the courts, which are generally pretty good at figuring out whether to place the blame on a user or on the engineers.
Both you and the manufacturer know if your customization was the likely cause of a failure or not. Life would be much simpler if everyone just admitted that and moved on.
https://hardware.slashdot.org/story/14/02/09/1828229/custome...
I think that a lot of people who agree with your statement aren't considering that running third party software on a device might inflict costly (or irreparable) damage on a product.
But if it is not, then yes they they should be.
And the burden of proof that says that the software caused the issue, should be in Apple.
Technically, they don't say that wetting the sticker will void your warranty, but if the sticker shows that it was wet, the manufacturer would have denied warranty coverage anyway.
Anyway, proof of misuse or consumer damage should void your warranty.
Perhaps the seal stickers should say, "Warranty inspection waived if this seal is intact."
What would that be good for?
Honestly. Now they have started applying pressure.
They can start sending fines later this year or next year.
But giving up? I can't seen an upside in that.