Magnuson-Moss Warranty Act:
FTC's and Better Business Bureau's Handling of Automobile Warranty Complaints
HRD-89-57: Published: Mar 14, 1989. Publicly Released: Mar 20, 1989.
- Full Report:
In response to a congressional request, GAO provided information on how the Federal Trade Commission (FTC) and a nonprofit organization handled an individual's claims under an automobile manufacturer's written warranty.
GAO found that: (1) the individual purchased a new automobile from an automobile dealer and received a written warranty that required consumers to use an informal dispute resolution program before seeking legal remedies; (2) after unsuccessfully trying to obtain repairs under the warranty, the individual submitted claims requesting that a local branch of the organization use certain FTC standards to settle his dispute and that the automobile manufacturer replace the vehicle; (3) FTC did not have the authority to intervene in individual consumer disputes; (4) FTC noted that its standards did not apply, since the automobile manufacturer made the use of the informal dispute program voluntary; (5) the nonprofit organization correctly did not use the FTC standards the claimant requested; and (6) FTC properly suggested that the claimant make a claim in a state or federal court under the Magnuson-Moss Warranty Act.