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The Federal Trade Commission (FTC) has released an FTC Consumer Alert entitled "Auto Warranties, Routine Maintenance and Repairs: Is Using the Dealer a Must?" in response to a complaint filed by the Automotive Aftermarket Industry Association (AAIA), Automotive Oil Change Association (AOCA) and the Tire Industry Association (TIA).
The FTC Alert was distributed in response to a letter sent by AAIA, AOCA and TIA charging that Honda had issued a release that appeared designed to give car owners the impression that their warranty right would be jeopardized if they used "aftermarket" parts. The Aug. 20, 2010 Honda release stated that "only by purchasing Honda Genuine parts through an authorized U.S. Honda dealer can you be assured of the replacement part's authenticity, reliability and compatibility."
In a subsequent letter to the FTC, AOCA and AAIA charged that the Honda statement was "in direct conflict with the Magnuson-Moss statute," which prohibits the conditioning of a warranty on the use of the manufacturer's brand products.
"Since such OEM missives often confuse consumers into giving up their right to choose independent automotive service providers like fast lubes, AOCA immediately challenged Honda's statement under the Magnuson Moss Warranty Act," said Gordon Tayler, communications manager at AOCA. "As part of AOCA's ongoing discussions with the Federal Trade Commission regarding this issue, AOCA surveyed the membership to determine how many 2011 Honda vehicles were serviced at fast lubes in the fall of 2010 versus how many 2010 Honda vehicles were serviced in the fall of 2009. The results demonstrated a devastating 70 percent decrease."
The FTC's consumer alert, among other things, makes clear that OEM vehicle warranties cannot be voided by the mere use of independent parts and services, and stipulates that the burden of proof is on the OEM and/or dealer who tries to claim an independent part or service provider caused a problem that would void warranty coverage.
"We're urging everyone to post the full statement on their business websites and make copies readily available to their in-store customers," Taylor said. (A copy of the statement is available here.)
"We are pleased that the FTC has put out valuable guidance to U.S. car owners regarding their rights under their new car warranties," said AAIA president and CEO, Kathleen Schmatz. "Vehicle manufacturers like Honda continue to put out misleading information that confuses car owners as to their ability to choose where and with what parts their vehicle is serviced and still protect their new vehicle warranty. Most surveys have shown that absent the warranty, the vast majority of consumers choose the independent aftermarket based on quality, price and convenience; and this FTC Alert will ensure they will have the peace of mind to exercise that choice."
The FTC Alert spells out a key provision of the Magnuson-Moss Warranty Act that it is illegal for manufacturers or dealers to claim that a consumers warranty is void or to deny warranty coverage simply because someone other than the dealer provided service. The alert states that an independent technician, a retail chain shop or even the car owner can do routine maintenance and repairs on their vehicle, without jeopardizing their new car warranty.
However, AOCA warns that the task of defending the lube industry against OEM attacks is unfinished. For starters, the FTC declined to find Honda in direct violation of the Magnuson-Moss Act, saying in a letter (a copy of which is available here), "we interpret the American Honda position statements to state that American Honda will not deny warranty coverage for the mere use of an unauthorized part, but rather for damage or defects caused by those parts."
"Although the Federal Trade Commission's recent action is a victory for fast lubes, it is not the end of the story. Honda did not receive an official reprimand from the government because the language they used was deemed ambiguous enough to squeeze around the Federal Trade Commission's current interpretation of the law," Taylor said. "Such language could not be seen as ambiguous if the government understood what we understand about the day-to-day customs and practices of the automotive service industry. Therefore, the investigation continues."
Taylor urged lube operators to contact the association immediately should they come across any of the following:
•Customer statements regarding the requirement of using a dealership and/or OEM parts.
•Situations regarding actual dealership claims that independent service or parts caused a problem that would make necessary repairs fall outside warranty coverage.
•Problems with OEM parts, both functional and practical (cost and availability).
•Functional problems with independent parts.
"This information is vital," Taylor said. "It will be used to address the ongoing situation with Honda and other OEMs, as well as the Federal Trade Commission's upcoming review of the entire Magnuson Moss Warranty Act regulation."
