Running a Shop Law

ARA seeks investigation of possible warranty law violations

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Feb. 15, 2011 — The Automotive Recyclers Association (ARA) on Monday called on the Federal Trade Commission (FTC) to investigate potential breaches of warranty laws by automotive manufacturers.

The organization is concerned that several manufacturers have used language that implies that warranties are tied to the use of new, authorized replacement parts, which is illegal under the Magnuson-Moss Act. ARA also said "automakers’ unfounded disparagement" of recycled OEM parts could violate the Lanham Act, which prohibits false advertisement and other trademark-related activities. 

The ARA cited recent statements by Chrysler, Honda, Toyota and Hyundai as cause for the investigation, which it requested in a letter.

The FTC issued a consumer alert in December in response to a Honda statement slamming aftermarket parts. That alert reminded consumers that using aftermarket parts and independent shops could not void warranties. The ARA said the report was helpful, but it did not address the use of recycled OEM parts.

“These potential violations of federal law that harm consumers, especially those least likely to be able to afford expensive replacement parts, need to be completely examined," said Michael Wilson, CEO of ARA.

The ARA said it has reached out to federal agencies during the past several months on this issue, but it has not received a “satisfactory response.”

The ARA represents the interests of more than 4,500 automotive recycling facilities in the U.S. and 14 other countries. For more information on the organization, go to a-r-a.org.
 

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