On September 6, 2016, the Federal Trade Commission (“FTC”) announced that it will be adopting amendments to its regulations under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act (“Magnuson-Moss Act”). The revisions enact key provisions of the E-Warranty Act, signed into law by President Obama in September 2015. The amendments will allow manufacturers and suppliers to satisfy written warranty requirements by making their written warranties accessible online, subject to certain requirements protecting consumers. Specifically, the amendments make changes to the FTC’s Pre-Sale Availability Rule and Disclosure Rule.
The Pre-Sale Availability Rule describes methods warrantors and sellers may use to provide warranty terms to consumers prior to sale. The revised rule gives warrantors the option of providing warranty terms in an accessible digital format on the warrantor’s website, provided that the warrantor also: (i) informs consumers of how to obtain warranty terms in a clear and conspicuous manner on the product, packaging or manual; (ii) provides a hard copy of the warranty terms promptly and free of charge upon request by consumer; (iii) ensures warranty terms posted online are clear, conspicuous, and remain accessible to consumers; and (iv) sufficiently informs consumers of the warranty terms in a way that allows the consumer to readily identify the terms that apply to the specific warranted product.
The Disclosure Rule already requires warrantors to disclose any limitation on the duration of implied warranties on the face of the warranty; however, to comply with the Ewarranty Act, the FTC has revised the definition of “on the face of the warranty” to include an option for a warranty posted online. The new definition is revised to include: (i) on the first page of the warranty, if the warranty is printed on one or more sheets of paper; (ii) on the page on which the warranty text begins, if the warranty is printed as part of a larger document; or (iii) in close proximity to the location where the warranty text begins, if the warranty is on a website or otherwise displayed electronically.
The new rules went into effect on October 17, 2016. A copy of the Act may be found here.