Published May 23, 2019, Dealer’s Voice –Dealers today have hundreds of consumer products that they offer for sale that have a manufacturer warranty. Retailers typically rely upon the product manufacturers to provide customers with all the terms of warranties, but they should keep in mind that federal law places the burden on the seller to offer consumers information regarding the warranties on the products they offer.
The FTC‘s Pre-Sale Availability Rule requires all sellers of consumer products that cost more than $15.00 to make the text of the warranty available to prospective buyers for review prior to their purchases so that they can make fully informed decisions. Dealers can comply with the Rule by either: (1) displaying the warranty in close proximity of the warranted product; or (2) providing it to the prospective customers upon request prior to the sale and placing signs around the store letting consumers know that they can obtain the warranties by asking for them,
The Rule also requires warrantors to provide sellers with all the warranty materials necessary for the sellers to comply with its obligations. The E-Warranty Act enacted in 2016 allows warrantors to post the terms of their warranties online and similarly allows sellers the ability to comply by making the complete text of warranties available to prospective buyers electronically, but only if the warrantor of the product provides the warranty terms “in an accessible digital format” on the warrantor’s website.
If a warrantor elects this option, it must: (1) provide the consumer with the warrantor’s website where the warranty terms can be accessed and reviewed, and provide the phone number, mailing address, or other reasonable non-Internet based means for the consumer to request a copy of the warranty terms; (2) provide a hard copy of the warranty terms promptly and free of charge upon the request of a consumer or seller; (3) ensure that the warranty terms are posted in a clear and conspicuous manner and “remain accessible to the consumer” on the warrantor’s website; and (4) provide sufficient information to allow the consumer to readily identify the warranty terms that apply to the specific warranted product.
Although the E-Warranty Act appears to provide a clear path for dealers to comply with the rule, some vehicle manufacturers do not provide warranty terms for all of their products online or otherwise, thereby potentially exposing dealers to liability. We urge dealers to verify whether the manufacturers of the products that they sell are complying with their obligations to supply all required warranty information.