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FTC Releases Magnuson-Moss Violation Letter to Hyundai

Source: Auto Care Association

The Federal Trade Commission (FTC) sent a compliance warning letter to Hyundai Motor America last month regarding possible violations of the Magnuson-Moss Warranty Act. The letter explains that the act prohibits warrantors of consumer products from conditioning (tying) their written warranties to a consumer’s use of any article or service that is identified by brand, trade or corporate name (e.g., “original equipment only”).

The letter also warns: “Warranty language that implies (FTC emphasis) to a consumer acting reasonably under the circumstances that warranty coverage requires the consumer to purchase an article or service identified by brand, trade or corporate name is similarly deceptive and prohibited.”

Specifically, the FTC referenced this Hyundai website statement as problematic:

“The use of Hyundai genuine parts is required to keep your Hyundai manufacturer’s warranties and any extended warranties intact.”

The FTC left open the option that they may take “legal action” and gave Hyundai 30 days to review and revise their materials, which will then be subject to FTC staff review.

In a May 4 joint press release, the Auto Care Association, Automotive Oil Change Association and Tire Industry Association expressed the “hope that the FTC action will serve as a wake-up call to the vehicle manufacturers and their authorized service providers about the act’s anti-tying provisions; and will also help educate consumers that they can have their vehicles maintained by their trusted independent technician using high quality non-original equipment parts without fear of voiding their new car warranty.”

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