BMW settles with the FTC over restrictive Mini warranties

Lindsey Caldwell - Mar 20, 2015, 5:10 am CST
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BMW settles with the FTC over restrictive Mini warranties

Consumer warranties can be tricky. They are ideally designed to protect the consumer, but are mostly written by companies to protect their own interests and profit margin. BMW‘s auto warranties were scrutinized by the Federal Trade Commission (FTC) which lead to an official complaint from the FTC. BMW of North America is settling with the FTC over their administrative complaint that BMW’s Mini car division restricted its customers freedom to choose after-market auto parts and individual repair garages over Mini’s official dealerships. In order to avoid a possibly long and drawn out court battle against the regulatory agency, BMW decided to settle.

According to the FTC, the BMW Mini’s warranties were only valid if customers used exclusively Mini parts and dealerships for all of their maintenance, meaning that BMW could have invalidated a warranty for a simple tire rotation or oil change outside of their chain of dealerships. Such an act would be in violation of the Magnuson-Moss Warranty Act.

BMW did not admit any fault. In fact, BMW claims that they received no complaints about their warranties. The FTC actually refrained from stating whether BMW actually ever invalidated any warranties for using outside dealerships, but the FTC alleges that the wording in Mini’s manuals is a violation in itself.

In lieu of the settlement, Mini customers will be receiving consumer notices from BMW stating that they can are free to use any auto parts or repair shops without fear of invalidating their warranties. BMW has been warned that they are not allowed to violate the same warranty act again. The FTC doesn’t state what will happen if BMW does find itself in future violation, but BMW will likely err on the side of caution from now on.

Source: Auto News


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