BMW and FTC Reach Settlement Over Warranty Service
[Automotive News](http://www.autonews.com/article/20150319/OEM11/150319823/bmw-settles-dispute-with-ftc-over-mini-warranties) reports that Federal regulators examining MINI’s warranty coverage have agreed on an outcome.The Federal Trade Commission charged that BMW’s MINI Division violated the Magnuson-Moss Warranty Act by telling consumers that BMW would void their warranty unless they used MINI parts and MINI dealers to perform maintenance and repair work. This has resulted in a settlement in which BMW will send notices to MINI owners to clarify any ambiguity. BMW claims that no complaints were received at MINI about the issue, but figured a settlement would be in the best interest of customers.
Under the agreement with the FTC, BMW is required to send notices to MINI owners telling them that using aftermarket parts using non-MINI service centers will not void their warranties.
The article suggests that from the FTC’s point of view, it isn’t clear whether customers complaining brought this about or whether the discrepancies were found by regulators another way, but as Automotive News states it, “A one-year gap between the three-year Mini Maintenance Program and the brand’s four-year warranty was a focal point of the dispute.”
“It’s against the law for a dealer to refuse to honor a warranty just because someone else did maintenance or repairs on the car,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “As a result of this order, BMW will change its practices and give MINI owners information about their rights.”
Neither the Automotive News article nor the FTC releases are specific about which model years were considered part of the settlement, or whether the charges applied only to specific models, or all models of MINI vehicles, but the docket initially filed states, “Since at least 2002, Respondent’s MINI Division has offered purchasers of its new MINI passenger cars the “MINI Maintenance Program” (“Maintenance Program”), included automatically in the purchase of a MINI passenger car from a MINI dealer.” So this appears to impact nearly all MINIs sold in the U.S.
You can read the entire Automotive News article here.
The FTC press release is here.
The docket can be found here.
<p>Ouch. That’s just insulting for a company that prides itself on making cars are unique to each owner to say that your warrant is invalid if you use non MINI parts. It seems that this want enforced widely though, since if it was my warrant would have been invalidated within a few months of taking delivery.</p>
<p>MINI really can’t catch a break lately, can they? I hate to say it, but this company is rapidly losing my trust. I love my R56, but I still haven’t grown used to the larger, goofy looking F56. I hope the company can get back on track before it’s too late.</p>
<p>“a company that prides itself on making cars are unique to each owner” You know that’s all just for marketing, right?</p>
<p>Of course it’s marketing, but that’s what makes it bad. MINI isn’t living up to their marketing.</p>
<p>On a side note I just discovered these:</p>
<p><a href="http://www.amazon.com/GoBadges-EP19-Unionjack-Projection-Courtesy/dp/B00U24MER6/ref=sr_1_5?ie=UTF8&qid=1426907738&sr=8-5&keywords=gobadges+puddle#" rel="nofollow ugc">http://www.amazon.com/GoBadges-EP19-Unionjack-Projection-Courtesy/dp/B00U24MER6/ref=sr_1_5?ie=UTF8&qid=1426907738&sr=8-5&keywords=gobadges+puddle#</a></p>
<p>Anyone have experience with these? They look pretty awesome for a cheap, easy mod.</p>
<p>We are saying the same thing. MINI doesn’t ‘have to’ stick with that marketing but the problems comes with transparency. When a brand says one thing, i.e. caring so much about the owners, but does another, it ruins brand trust quickly. Maybe MINI should stop building so many new vehicles and focus on their owners more.</p>
<p>GoBadges are great! I have one on each MINI and know lots of others with them.</p>
<p>So MINI should be liable for another shops labor, laying the comeback on MINI to correct. Is that what the result of this settlement is saying should happen?</p>
<p>The part that struck me was the bit about using MINI parts. So if you modify your car in any way with 3rd party parts, they could potentially deny you warranty work. Technically, they could void my warranty because I replaced the antenna with a shorter one.</p>
<p>they void the warranty on the part they did not produce or choose, makes sense to me, not the entire warranty so don’t get too ahead of yourself there</p>
<p>In my experience they just don’t warrantee third party parts, but the original parts still hold the Mini warrantee.</p>
<p>Read up on the law. Not requiring MINI branded parts is to prevent monopoly. It allows you to choose a non-MINI battery, for example, and not have to worry about your cars warranty. MINI doesn’t have to warranty the third party parts, the third party does that. If MINI thinks that third party work caused a problem, then they can choose to not warranty what’s known as “consequential damages”. For those of us that have been around the block with MINI, this is more about “you have an underdrive pulley on your supercharger so we won’t cover you failed HK amplifier”</p>
<p>It was a dealer by dealer issue, as they are the face to the customer. Some were understanding, some were not. Those that were not are most likely the source of this. But for sure, MINI has a history of being a bit, uh, cheap on warranty issues, as there wasn’t much profit to pay for it.</p>
<p>That’s not why the FTC was investigating. In my case, I was told by a service department employee that my aftermarket brake pads voided the warranty on the entire brake system. That was back in 2005 or 2006. I haven’t had any trouble since then, but I’ve heard lots of similar stories over the years.</p>
<p>I used to bring my MINI in, right from a track weekend with harness bar and harnesses, mods and all, and never had an issue getting work done under warranty. I only once had an issue when they needed to remove an aftermarket part to perform warranty work, which I was okay with paying one hour of labor for them to get around the aftermarket part (understandable). Maybe this is dealer by dealer, case by case basis, otherwise I have never had an issue with warranty or service at the dealerships I used in the past.</p>
<p>I can see them not warranting a supercharger for having a smaller pulley, or an upper strut mount with an aftermarket suspension installed, etc.</p>
<p>Or they could just extend the Maintenance Program to equal the warranty period same as BMW.</p>
<p>I’ve always thought MINI should mirror BMW in that way. 4/50k for both Maint and Boot to Bonnet warranties.</p>
<p>“It’s against the law for a dealer to refuse to honor a warranty just because someone else did maintenance or repairs on the car,”</p>
<p>So if the work was done incorrectly, MINI should have to pay for a mistake made by a shop that doesn’t know how to properly fix the car? I’m not sure I’m following the logic here.</p>
<p>My point exactly. Unless MINI is turning down work for things like aftermarket wheels (provided its not a “donk”), that wouldn’t have any relationship to causing another component or system to fail.</p>
<p>I have always told my customers that the warranty would be honored as long as the proper parts (MINI OEM) were used and records were kept if anything was done outside of the dealership. I get both sides of the argument and BMW/MINI should have known better to go down this road since it was clearly illegal to tell customers otherwise. Ouch. I also fully understand the invalidity of a warranty on a part that BMW/MINI is not a producer or chooser of. I would never expect warranty coverage for such a part as say my lowering springs by H&R…</p>
<p>The problem with a number of MINI/BMW OEM parts are that they are poor quality/crap or fail sooner than they should. Example: Engine Damper Motor Mount on R50, the Front Control Arm bushings.</p>
<p>I had to replace both of these (Control Arm Bushings after only 50K miles) (Damper after 60K miles). Well known that these parts fail/need replacing much too soon.</p>
<p>I used Powerflex (non OEM) for Crtl Arm Bushings) purchased from Detroit Tuned. Took to MINI Dealer Service and they had no issue with installing (in fact Main tech told me he put them in his MINI)</p>
<p>I used OEM Damper because I was trading in my MINI and didn’t want to go after market as I wasn’t keeping car.</p>
<p>This is part of the problem with OEM parts many times (regardless of Car Brand), they are often not as good as after market.</p>
<p>The MINI dealership I work at won’t install any non-oem MINI part provided by the customer.</p>
<p>While I don’t know what the law in various States or Fed have on this, I guess it could be up to the individual dealer/Service Center if they want to install non OEM parts. if they didn’t want to, In that case I would go to a Independent MINI service center.</p>
<p>As I wrote, my Dealer/Service Center had no issues installing the Powerflex bushings. The head Tech has them installed on his MINI.</p>
<p>That’s the official line. Warranty won’t cover 3rd party parts or any negative affects they have on the car. That’s been the internal MINI line since 2002.</p>
<p>That’s not an “official line”. That is federal law.</p>
<p>That’s the point – the official statement MINI have customer which is obviously based on the law.</p>
<p>You were breaking the law. You cannot insist that factory parts are used. That would mean I’d have had to pay over $300 for a Mazda battery for my CX-9, instead of the Interstate I got for about a C-Note.</p>
<p>The Magnasson-Moss act is for CONSUMER PROTECTION. It preservers the owners right to do what they want to their own cars, with parts of their choosing, and delineates the boundary of responsibility.</p>
<p>1) It DOES NOT require that any manufacturer warranty parts not of their own manufacture.</p>
<p>2) It DOES NOT require a car manufacturer to fix poor repairs done by a third party.</p>
<p>3) It PRESERVES your right to change your own oil, for example, and still have a warranty.</p>
<p>4) It PRESERVES you right to choose your own parts. Want to buy the factory cabin air filter for your left nut? Have at it. Want to buy the OEM equivalent direct from the OEM supplier, for one third the cost? YOU GET TO CHOOSE.</p>
<p>I’ve been around the new MINI for well over a decade now. To be blunt, there were TONS of dealerships that weren’t MOD friendly, and there are lots and lots of MINI owners who’ve had a BS, illegal line fed them concerning warranty issues. Many were resolved via escalation, Many were ignored for years and years (1st Gen Power Steering Pumps anyone? Heck, they’d extended warranty coverage on the part in England two years, if I remember correctly, earlier than MINI USA ever admitted that there was a problem with the part.</p>
<p>I”m glad MINI was investigated for this. The corporate and (some) dealership behavior has been shameful. I hope that they get their act together.</p>
<p>Thanks for your thoughts and insight but I am pretty sure you are taking this a bit far with your accusation. I do not pretend to be an expert in the law and rarely discuss this topic with customers. I would always defer to the staff in our Service Dept for the final say in this particular matter. Accusing me of breaking the law is a bit much.</p>
<p>It’s possible I miss-understood your post. But I’ve read the law. You yourself say you are not an expert. If that’s the case, how could you advise what your company would or would not cover? That seems to be a recipe for a disaster. If you are going to talk to a customer about what will and will not be honored for warranty work, I would think it would be a good idea to understand not only what you are comfortable with, but what laws govern this type of stuff, as well as what company policy is.</p>
<p>Quoting your own post “I have always told my customers that the warranty would be honored as long as the proper parts (MINI OEM) were used and records were kept if anything was done outside of the dealership.” Imagine that a customer followed your advice, got MINI parts, had a third party do some work, they kept records, but the third party screwed up. Car is damaged. They come to your dealership. They ask for warranty coverage, showing the receipts for both the MINI parts and the word done. They get sent packing. They complain “But Creed TOLD us that we could use MINI parts and keep records and now you won’t cover this work?!?!” This will end well for nobody.</p>
<p>Your own example isn’t completely consistent with the law. The fact that you only talk about this occasionally with customers is note-worthy but not relevant. You sell cars. This is important information to know in your position.</p>
<p>I would venture to guess that maybe 1% of well trained sales professionals in this business are knowledgeable in this particular area. I am quite good at saying “I don’t know about that” unless I have been trained on the subject. It was the general line told to me by Service and clearly this was the go-to line for years. Mis-trained. That being said, I clearly mis-spoke to a small number of customers that talked about this. I am at least willing to acknowledge any mistake I make.</p>
<p>Not sure why the Government would force BMW/Mini to cover a part not made by them. I am in the service indestry but I work on Gulfstream Aircraft we will not cover anything that is put on by someone else. If someone should mess things up while working on your Mini then they should pay to fix it. I would not expect Mini or anything for that matter to cover anything I put on my Mini I will expect them to cover everything else as long as what was put on after market did not cause the problem in the first place. That just common sense.</p>
<p>They aren’t required to cover others work if the work is faulty. This means that they can’t void your warranty if you do your own oil changes, or go to Oil-Changers. This means you can buy your own tires, and not get them from your car dealership….</p>
<p>Magnuson-Moss Explained:</p>
<p>This federal law was passed in the 1975 in response to widespread industrial abuse of warranties on consumer good. (Note: This was not specifically cars, but ALL consumer goods.) Turns out, most warranties that came with your products weren’t worth the paper they were written on, and it was so bad that Congress stepped in to act.</p>
<p>Now, before everyone starts screaming “Government Over-Reach”, hold on. The act isn’t what’s known as a “governing law”. That is, States can do whatever they want with regard to consumer protection, and the state statute wold govern. The MMA sets a minimum floor, as well as legal definitions of who is the consumer, the producer, and who is responsible for warranty work and when. All in all, not a bad thing.</p>
<p>Also, it does not require that products come with warranties, but it does require certain items to be within warranties, if the producer chooses to provide one, and defines the roles and responsibilities of interested parties. So, if you make a warranty, it’s got to be a real one, not something that looks like a warranty but doesn’t cover anything…..</p>
<p>So far, so good…..</p>
<p>Now, what producers have to cover: Stuff they built and sold to the consumer. Period.</p>
<p>What they don’t have to cover: Third party parts. Work done by third parties.</p>
<p>Grey Areas: Related damage. Let’s say you took your car to the corner garage, and had the belt and tensioner changed on you MCS. A month later, your A/C compressor fails. The dealer claims that the A/C compressor failed because the tensioner was installed incorrectly….. This one is a mess. Under the letter of the law, the dealership has to PROVE that it was consequential damage, but often they just SAY it’s consequential damage.</p>
<p>Grey Areas: Third Party parts & related damages. You get fancy new wheels and tires from TireRack. Your clutch goes at 25k miles….. MINI owes you a clutch.</p>
<p>Obvious Call: Your battery fails under warranty. The prorated credit means you’d still be out the price of an Optima battery, so you say heck with the MINI battery and get the Optima. Later, your body control module dies. MINI is on the hook here.</p>
<p>Obvious Call: You change your own oil with Mobil 1 full synthetic. You keep detailed records of oil changes and mileage. Your cam goes up in smoke at 35k miles. MINI owes you a cam.</p>
<p>WITHOUT MMA protections……</p>
<p>Drivetrain warranty void if you don’t use our $150 oil change service……</p>
<p>Suspension warranty void if you don’t buy tires from the dealership…..</p>
<p>All electronics warranty void if you hard wire your own driving lights….</p>
<p>So, for all of you saying “MINI shouldn’t have to cover other people’s work.” They DON’T. They NEVER HAVE HAD TO.</p>
<p>Here’s a FTC webpage about MMA and cars specifically. Heed the warning: Understand the law and it’s consequences.</p>
<p><a href="http://www.consumer.ftc.gov/articles/0138-auto-warranties-routine-maintenance" rel="nofollow ugc">http://www.consumer.ftc.gov/articles/0138-auto-warranties-routine-maintenance</a></p>