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Old 12-05-2009, 07:19 PM
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The Magnuson-Moss Act provides some protection to both parties on a warranty claim but it is a bit vague and subject to interpretation. You'd think they wanted to guarantee lifetime employment for lawyers when they write these things.

However, here's a little bit about it and my interpretation on how it works:

According to the Report of the House of Representatives which accompanied the law (House Report No. 93-1197, 93d Cong 2d Sess.) the Magnuson-Moss act was enacted by Congress in response to the widespread misuse by merchants of express warranties and disclaimers. The legislative history indicates that the purpose of the Act is to make warranties on consumer products more readily understood and enforceable and to provide the Federal Trade Commission with means to better protect consumers.

The statute is remedial in nature and is intended to protect consumers from deceptive warranty practices. Consumer products are not required to have warranties, but if one is given, it must comply with the Magnuson-Moss Act.

So why was the Act made into law?

To understand the Act, it is probably best that the consumer be aware of Congress' intentions when they first passed it.

First of all, Congress wanted to make sure that consumers could get complete information about warranty terms and conditions up front and in their truest form. By providing people with a way of learning what warranty coverage is offered on a product before they buy, the Act actually gives them a way to know exactly what they should expect if something goes wrong, and it also goes a long way in increasing customer satisfaction.

Secondly, Congress wanted to make sure that people could compare warranty coverages before buying their cars because in doing this, consumers can choose a product that has the best combination of price, features, and warranty coverage to meet their individual needs.

Thirdly, Congress wanted to promote competition on the basis of warranty coverage alone. By making sure that consumers can get warranty information, the Act has practically forced dealers and manufacturers into hosting sales promotions on the basis of warranty coverage and this competition among companies has made it much easier for consumers to seek various levels of warranty coverage. (Are you seeing a trend yet?)

Finally, Congress wanted to strengthen the pre-existing incentives for companies to perform their warranty obligations in a timely and efficient manner so that it would be easier to resolve any consumer disputes with a minimum of delay and expense.

Because of this, the Act makes it easier for consumers to seek a private solution for any breach of warranty in the courts, but it also creates a foundation for companies to set up good operating procedures for resolving disputes inexpensively and informally, without litigation.

So basically, the act was written to insure that a manufacturer that provides a warranty honor that warranty and provide for quick and efficient resolution of warranty claims by the consumer. It obligates them to do so within the writings of the act and their warranty (i.e., no deceptive terms), be it a full or limited warranty.

Now, from the consumer side, how does this affect us?

The Act allows warranties to include a provision that requires customers to try to resolve warranty disputes by means of the informal dispute resolution mechanism before going to court.

The dispute resolution method must meet the FTC's Rule on Informal Dispute Settlement Procedures (the Dispute Resolution Rule). This does not guarantee that the dispute will be resolved in your favor, though.

The act grants rights to the manufacturer to enforce their warranty and the consumer to file warranty claims. It provides the parties an avenue to resolve those claims. If they cannot, the issue can be decided by arbitration. In this case, an objective third party reviews the evidence and makes a decision that is final and binding on both parties.

Interestingly enough, it does not grant automatic resolution of any claim in favor of the consumer. Both parties must prove their side of the claim.

So, if your truck breaks by reason of a modification that can be directly attributed to your mod (transmission failure caused by higher shifting points and you've installed a Predator and selected the firmer shift option), the manufacturer has no obligation to warranty the repair.

Conversely, if your truck breaks and your mod did not directly contributed to the failure (tailgate latch fails to hold the part in place, it flops open, hardware breaks and tailgate is damaged and you have installed a Predator) the manufacturer cannot disclaim your warranty. They have to prove (burden of proof lie with them in this case as they are disputing your warranty claim) that this happened.

In summary, the Predator program can be removed and your stock program re-installed over and over again. Current thinking is that it leaves no trace. Therefore, it would be hard for the manufacturer to prove (burden of proof lies with the party disputing the claim) that your transmission failed because you modified your truck.

It's complicated. It's not cut and dried. It's subject to how well either party can prove their case.

Last edited by erm; 12-05-2009 at 07:22 PM.
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