What the Magnuson-Moss Act Does Not Require for Businesses

In order for you to be able to understand how the Act affects you as a businessperson, it is important first to understand what the Act does not need from you.

First of all, the Act does not require that any business to provide a written warranty. The Act allows businesses to decide whether or not to warrant their products in writing. Although let me just say that it is just good business to do so.

However, once a business decides to offer a written warranty on a consumer product, it must follow those statutes of the Act.

Secondly, the Act does not apply to oral warranties of any kind. Only written warranties are covered by the Act. Thirdly, the Act does not apply to any warranties that are made on services. They only cover warranties that are made on goods.

However, if your warranty covers both the parts provided for a repair and the labor involved in making that repair, the Act does apply to you.

Finally, the Act does not apply to any warranties on products that are sold for resale or for commercial purposes. The Act covers only warranties on consumer products. This means that only the warranties that are made on tangible property normally used for personal, family, or household purposes are covered. You should note that applicability of the Act to a particular product does not, however, depend upon how an individual buyer will use it.

What the Magnuson-Moss Act Requires

When the Magnuson-Moss Warranty Act was passed, Congress specified a number of requirements that warrantors are obligated to meet. Congress also directed the FTC to adopt some rules that are designed to cover other requirements.

The FTC adopted three Rules under the Act, which are: the Rule on Disclosure of Written Consumer Product Warranty Terms and Conditions (the Disclosure Rule), the Rule on Pre-Sale Availability of Written Warranty Terms (the Pre-Sale Availability Rule), and the Rule on Informal Dispute Settlement Procedures (the Dispute Resolution Rule).

Not to mention, the FTC has issued an interpretive rule that helps to clarify certain terms and explains some of the provisions of the Act. This section is going to summarize all of the requirements under the Act and the Rules. The Act and the Rules set up three basic requirements that may apply to you, either as a warrantor or a seller. These rules are as follows:

1. As a warrantor, you must designate, or title, your written warranty as either full or limited in a clear way.

2. As a warrantor, you have to state certain specified information about the coverage of your warranty in a single, clear, and easy-to-read document.

3. As a warrantor, you must make sure that your warranties are available where your warranted consumer products are sold so that consumers can read them before buying your product.

The titling requirement, which is established by the Act, basically applies to all written warranties on products that cost more than $10. However, the disclosure and pre-sale availability requirements, which were established by FTC Rules, apply to ALL written warranties on products costing more than $15.

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