BMW has attempted to settle a Federal Trade Commission charge that it illegally made warranties conditional on consumers having all oil changes performed at authorized service centers. BMW agreed to a pending settlement, saying it will discontinue the practice.
On March 19, the FTC issued an administrative complaint against BMW of North America LLC. The FTC alleged that BMWs Mini Division violated the tie-in provision of the Magnus-Moss Warranty Act of 1975 by stating in Mini vehicles owner manuals, beginning with 2012 models, that only Mini dealers are to perform oil changes, lest the four-year, 50,000-mile limited warranty be rejected.
Its against the law for a dealer to refuse to honor a warranty just because someone else did maintenance or repairs on the car, said Jessica Rich, director of the commissions Bureau of Consumer Protection. As a result of this order, BMW will change its practices and give Mini owners information about their rights [to use third-party services].
BMW has agreed to the order, but the FTC is fielding public comments until April 21. After that the commission will decide to accept the settlement without mention of penalties or to prescribe fines of up to $16,000 per incident for future violations.
The Automotive Oil Change Association has advocated for the order encouraged anyone with evidence against BMW to participate in the public comment and urged all its members to respond to an industry field data survey on the matter. AOCA applauds FTCs action thus far, but its not a done deal, the association said in a press release last week.
The association said tie-in violations of the federal warranty law are an epidemic for consumer rights. It has filed official complaints against Volkswagen-Audi, DaimlerChrysler, GM, Honda, Nissan, Mazda, Kia Motors and BMW. For years it seemed nothing would move FTC – or anyone in the federal government – into action against the politically giant automakers, but the BMW complaint may have finally pushed them over the edge, AOCA said. Overall, were hopeful that FTCs action against BMW will motivate other manufacturers to comply with MMWA.
There are also other ways that automakers violate the tie-in provision. An automaker doesnt have to use the phrase your warranty is void unless you use our products and services in order to achieve a tied product/service result, AOCAs policy advisor, Joanna Johnson, told Lube Report. Since 2003, weve seen every trick in the book.
According to the FTCs website, anyone from an independent mechanic to a retail chain shop to a do-it-yourselfer can do routine maintenance and repairs on a vehicle under warranty. However, if an engine is damaged from the maintenance, the OEM can deny coverage if it can prove that the maintenance or product used during the repair caused the damage.
Any tying of products and/or services is a problem for consumers, aftermarket service professionals and aftermarket manufacturers, Johnson said. The most common approach seems to be tying of products.
Johnson pointed to an alleged violation by Kia Motors in 2012, in which the automaker claimed that its warranties would be voided if a non-Kia oil filter was used in oil changes. The manufacturers burden of proof is not that it need merely show an aftermarket part relates to damage, but that it caused any alleged damage, Johnson said. Does FTC know how many engine problems arguably relate to oil filter function but arent necessarily caused by any problem with the oil filter part itself? So long as they dont have to prove causation, Kia has a veritable smorgasbord of engine problems available to wrongfully blame on the use of aftermarket oil filters, and the average layperson consumer will never know the difference.
Johnson said AOCA is hopeful that FTC will address the Kia complaint next.