FTC warns companies that void warranties over using third-party services

Published April 11, 2018

The days of reading the small print to see whether a repair or new part for your ailing laptop will void its warranty may be coming to an end. The FTC has officially warned several companies that their policies of ceasing support when a user attempts “non-approved” repairs or servicing are likely illegal.

It’s the sort of thing where if you buy a device or car from a company, they inform you that unless you use approved, often internally branded parts, you’re voiding the warranty and your item will no longer be supported by the company.

The idea is that a company doesn’t want to be on the hook when a user replaces an old, perfectly good stick of RAM with a new, crappy one and then comes crying to them when the computer won’t boot. Or, in a more dire situation, replaces the brakes with some off-brand ones, which then fail and cause an accident. So there’s a reason these restrictions exist.

Unfortunately, they’ve come to encompass far more than these dangerous cases; perhaps you replace the RAM and then the power supply burns out — that’s not your fault, but because you didn’t use approved RAM the company takes no responsibility for the failure. The result is consumers end up having to buy components or servicing at inflated prices from “licensed” or “approved” dealers.

“Provisions that tie warranty coverage to the use of particular products or services harm both consumers who pay more for them as well as the small businesses who offer competing products and services,” explained Thomas Pahl, from the FTC’s Bureau of Consumer Protection, in the announcement.

The agency gave several examples of offending language in customer agreements, blanking out the names of the companies. Ars Technica was quick to connect these with the major companies they correspond to: Hyundai, Nintendo and Sony. Here are the statements the FTC didn’t like, with the company names in bold where they were blank before.

The use of Hyundai parts is required to keep your . . . manufacturer’s warranties and any extended warranties intact.
This warranty shall not apply if this product . . . is used with products not sold or licensed by Nintendo.
This warranty does not apply if this product . . . has had the warranty seal on the PS4 altered, defaced, or removed.

It’s one thing to say, don’t overclock your PS4 or we won’t cover it. It’s quite another to say if the warranty seal has been “defaced” then we won’t cover it.

“Such statements generally are prohibited by the Magnuson-Moss Warranty Act,” the FTC announcement reads, and in addition “may be deceptive under the FTC Act.” The companies have 30 days to modify their policies.

This could be a major win for consumers: more repairs and service locations would be allowed under warranty, and modders of game consoles may be able to indulge their hobby without trying to hide it from the manufacturer. That will depend on the new phrasing of the companies’ policies, but this attention from the FTC will at the very least nudge things in the right direction.