Anyone who has purchased a new Harley-Davidson is probably familiar with the ‘it will void your warranty’ threat if aftermarket parts, such as an exhaust, are installed. This is about to change. A new order from the Federal Trade Commission (FTC) will be of special interest to owners and aspiring owners of Harley-Davidson.
ILLEGAL WARRANTY TERMS
The main problems stemmed from the company’s language in its warranties. According to the FTC’s complaints, H-D was imposing illegal warranty terms that voided customers’ warranties if they used anyone other than their companies and dealers to get parts or repairs for their products. The FTC also alleged that Harley-Davidson failed to fully disclose all of the terms of its warranty in a single document, requiring consumers to contact a dealership for full details. The FTC claimed that these terms harmed consumers and competition in multiple ways.
COMPLAINTS AGAINST HARLEY WARRANTIES
- Restricting consumers’ choices: Consumers who buy a product covered by a warranty do so to protect their own interests, not the manufacturer’s.
- Costing consumers more money: By telling consumers their warranties will be voided if they choose third-party parts or repair services, the companies force consumers to use potentially more expensive options provided by the manufacturer.
- Undercutting independent dealers: By conditioning their warranties on the use of authorized service providers and branded parts, the companies infringed the right of independent repairers and manufacturers to compete on a level playing field.
- Reducing resiliency: Consumers rely on the companies’ products for emergency power and transportation. Robust competition from aftermarket part manufacturers is critical to ensuring that consumers get the replacement parts they need when they need them and are not at the mercy of branded part supply chains.
NEW ORDERS FOR HARLEY
- Prohibit further violations: The companies will be prohibited from further violations of the Warranty Act, and in Harley-Davidson’s case, the Disclosure Rule. They will also be prohibited from telling consumers that their warranties will be void if they use third-party services or parts, or that they should only use branded parts or authorized service providers. If the companies violate these terms, the FTC will be able to seek civil penalties of up to $46,517 per violation in federal court.
- Recognize consumers’ right to repair: [Harley-Davidson] will be required to add specific language to [its] warranties saying, “Taking your product to be serviced by a repair shop that is not affiliated with or an authorized dealer of [Company] will not void this warranty. Also, using third-party parts will not void this warranty.”
- Come clean with consumers: Both companies must send and post notices informing customers that their warranties will remain in effect even if they buy aftermarket parts or patronize independent repairers.
- Alert dealers to compete fairly: Both companies are being required to direct authorized dealers to remove deceptive display materials, train and monitor employees, and not promote branded parts and dealers over third parties.
This is a huge deal for Harley enthusiasts who have long complained about this warranty glitch and how it limits their freedom to shop for aftermarket parts. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection says these new orders require Harley to “fix their warranties, come clean with consumers, and ensure fair competition with independent providers. Other companies that squelch consumers’ right to repair should take notice.”
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