FTC Calls Out PC Makers for Unfair Warranty Practices Like “Warranty Void If Removed” Stickers, Demands Revised Approach

The Federal Trade Commission has sent letters to major PC companies, asking them to review their warranty policies and the “language” used in them.

FTC practices such as “Warranty Void If Removed” stickers prevent consumers from exercising their rights

Nowadays, claiming warranties from manufacturers has become a problem for many consumers due to uncertain policies and strict RMA conditions. We have seen on several occasions on public forums users sharing their negative experiences when claiming warranties, which has created a negative impact on the markets, especially regarding the image of big tech companies. However, it seems that the FTC has decided to intervene in the situation, sending letters to ASRock, Zotac, and Gigabyte, asking them to review their warranty and promotional materials.

The FTC specifically raised concerns about the “warranty void if removed” statement and told companies that it violated the Magnuson-Moss Warranty Act. Here’s what it had to say:

These warning letters warn companies that restricting consumers’ right to repair is a violation of the law. The Commission will continue its efforts to protect consumers’ right to repair and independent dealers’ right to competition.

– Samuel Levine, director of the FTC’s Bureau of Consumer Protection

The letters to five of the companies warn that FTC staff are concerned about the companies’ statements that consumers must use specified parts or services to keep their warranties intact. Unless warrantors provide the parts or services free of charge or receive a waiver from the FTC, such statements are generally prohibited by the MMWA. Similarly, such statements may be misleading under the FTC Act.

The letters were sent to ASRock, Zotac and Gigabyte, companies that market and sell gaming PCs, graphics chips, motherboards and other accessories.

– FTC Press Release

The FTC’s position here is very bold and the regulator’s decision is entirely justifiable, given that such warranties not only jeopardize consumers’ rights, but also prevent them from engaging in a repair/replacement process. The Magnuson-Moss Warranty Act requires manufacturers to clearly and conspicuously disclose the terms and conditions of their warranties in writing, and it also prevents the warranty from becoming void in the event of self-repair by the consumer. However, this practice is not at all common practice in the industry, and the FTC is indeed right on this point.

The regulator had already taken similar action in 2018, sending similar letters to Nintendo, Sony, and Microsoft regarding gaming consoles. It will be interesting to see whether the companies mentioned by the FTC will revise their warranty policies in light of the incident, but it is likely that consumers will come out on top.

Source of information: FTC