FTC Sticks It To Manufacturers Who (Improperly) Use “Void If Removed” Warranty Labels

The Federal Trade Commission (“FTC”), the federal regulator that seeks to protect consumers from unfair and deceptive business practices, has issued notice to a half dozen companies, declaring their use of “Warranty Void If Removed” stickers on various products are misleading.  The FTC provided the companies with 30 days to respond.

A Pressing Issue

“Void If Removed” warranty stickers are most frequently seen on electronic equipment.  The stickers are intended in certain instances to prevent or at least deter consumers from tinkering with the equipment themselves, using non-original equipment manufacturer (“OEM”) replacement parts, and/or using non-approved repair companies to service the equipment.

The FTC contends that such stickers violate applicable law (the Magnuson Moss Warranty Act) and mislead consumers.  The FTC’s warning turns up the heat on manufactures to cease attaching such stickers to their products or potentially face further legal scrutiny, including but not limited to monetary fines.

Bottom Line

While it is unclear how this dispute will be resolved, manufacturers can help mitigate their liability in the meantime by carefully reviewing product warranty language and labeling with their legal counsel.  Improper recitation of the law that misleads consumers, including but not limited to the use of labels or stickers that purport to invalidate warranties if removed, should be avoided.

Manufacturers that violate the law may be subject to regulatory scrutiny and lawsuits. Who would want to get stuck with something like that?

Jon L. Farnsworth is a shareholder at Felhaber Larson.  He is a technology attorney who advises and works with manufacturers on warranty issues.  He can be reached at 612-373-8455 or jfarnsworth@felhaber.com.