FTC Calls Out Nintendo, Microsoft, And Sony For Their Illegal 'Warranty Void If Removed' Stickers

from the STICKER-ILLEGAL-IF-DEPLOYED dept

Early last month, the FTC took a small step towards enforcing a decades-old law. The 1975 Magnuson-Moss Warranty Act forbade manufacturers from placing repair restrictions on electronic devices costing over $5. This means the little stickers claiming "warranty void if removed" are not just bullshit. They're also illegal.

Forty years of "void if removed" stickers being plastered on tons of consumer electronics means the law has done little to prevent manufacturers from placing repair restrictions on consumers. The language is so ubiquitous consumers assume tinkering with their purchased products will instantly void warranties. Many also believe taking their electronics to anyone but the manufacturer (or manufacturer-approved repair shops) for service will similarly remove warranty protections.

The fact is that the burden rests on manufacturers to prove any tinkering or third-party repair voided the warranty's coverage. Of course, given the number of restrictions and exceptions contained in electronic device fine print, chances are doing anything to anything is probably gives manufacturers the "evidence" they need to duck out of warranty obligations.

The press release by the FTC did not name the six manufacturers targeted by these cease-and-desist letters. Motherboard has now unmasked these lawbreakers, thanks to an FOIA request. And they're pretty much exactly who you think they are.

Motherboard has obtained copies of the letters via a Freedom of Information Act request and has learned the names of the six companies that were warned. They are Sony, Microsoft, Nintendo, Hyundai, HTC, and computer hardware manufacturer ASUS.

The letters were sent by Lois Greisman, the FTC’s associate director of marketing practices, on April 9; the FTC has given each company 30 days to change its official warranty policies and says that it may take legal action against the companies.

Conspicuously missing from this list is Apple, which is perhaps the most overbearing in its insistence that anything not specifically performed by Apple techs voids warranties. Apple has taken steps over the years to prevent owners from attempting their own repairs or seeking assistance from third party repair services. It has aggressively fought "right to repair" legislation and sued people for offering non-Apple approved modifications.

Sony, Microsoft, and Nintendo are the most obvious violators in this list. Every gaming console since the inception of gaming consoles has featured "void if removed" stickers. And every gaming console was put on the market several years after the law was passed.

As Motherboard's Matthew Gault points out, the letters [PDF] are mostly boilerplate. The only differences are callouts of manufacturer-specific language that violates the 1975 law. But they do show the FTC may finally -- years after the fact -- do something about bogus warranty restrictions.

This letter places you on notice that violations of the Warranty and FTC Acts may result in legal action. FTC investigators have copied and preserved the online pages in question, and we plan to review your company's written warranty and promotional materials after 30 days. You should review the Warranty and FTC Act and if necessary, revise your practices to comply with the Acts' requirements. By sending this letter, we do not waive the FTC's right to take law enforcement action and seek appropriate injunctive and monetary remedies against [manufacturer name] based on past or future violations.

Maybe these stickers will finally disappear, if nothing else. The law has only been used to punish a manufacturer once in its 40-year existence. Perhaps another FTC announcement -- hopefully containing some sort of enforcement action -- will come our way later this month after the agency completes its 30-day review.

Filed Under: anti-competitive, freedom to tinker, ftc, void if removed, warranty
Companies: microsoft, nintendo, sony

Office Depot Employees Blowing The Whistle On Outright Scams

from the reputation-is-a-scarce-good dept

For many years, there have been stories of various shady online electronics (especially camera) retailers (many of whom are based in the same neighborhood in Brooklyn). The main scam is to offer super cheap prices on cameras to get you "in the door" (either online or in person), and then focus on trying to sell you all sorts of massively over-priced add-ons and warranties. If you turn them down, they suddenly "discover" that the original product you ordered is out-of-stock. At times, over the years, various authorities have cracked down on such resellers, though they often pop right back up under a different name.

Still, folks who know the business were well aware of such shady companies and often knew to avoid them... but it's a bit different to find out that some large brand name retailers appear to be doing the same. Laptop Magazine is reporting on a series of whistle-blowing employees at Office Depot, detailing how they pulled off similar scams. The typical "oh, that's out of stock" trick is apparently quite common, but it even gets more advanced, with some employees creating photoshopped price signs, in order to "hide" the price of an expensive warranty add-on in the "list price" for a computer. These practices are quite illegal, and it looks like the report might trigger some FTC interest, especially given the multiple reports, suggesting that this isn't just a few rogue employees.

It does make you wonder what Office Depot was thinking. The obvious answer is: "anything for a sale," but that doesn't tell the whole story. Sooner or later, companies that do this sort of thing are going to get caught -- and when that happens (beyond the fines), the damage to a company's reputation can be massive and debilitating. It just seems like the cost of being outed is so high, it's ridiculous that any company would encourage such behavior.

Filed Under: pricing, scams, warranty
Companies: office depot