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Before you make a major purchase, there is an important promise you should read. It is called the warranty -- the manufacturer's or seller's promise to stand behind a product. Warranties vary in the amount of coverage they provide. So, just as you compare the style, price, and other characteristics of products before you buy, you also can compare their warranties. The Magnuson-Moss Act of 1975 requires that warranties be available for you to read before you make a purchase.

WRITTEN WARRANTIES

Written warranties come with most major purchases, although this is not legally required. The protection offered by written warranties varies greatly, so it is important to compare warranties before making a purchase. Here are some questions to keep in mind when comparing warranties.

WHAT PARTS AND REPAIR PROBLEMS ARE COVERED BY THE WARRANTY?

Check to see if any parts of the product or types of repair problems are excluded from coverage.

Are any expenses excluded from coverage?

Some warranties require you to pay for labor charges.

How long does the warranty last?

Check the warranty to see when it expires.

DOES THE WARRANTY COVER "CONSEQUENTIAL DAMAGES"?

Many warranties do not cover consequential damages. This means that the company will not pay for any damage the product caused, or your time and expense in getting the damage repaired. For example, if your freezer breaks and the food spoils, the company will not pay for the food you lost.

ARE THERE ANY CONDITIONS OR LIMITATIONS ON THE WARRANTY?

Some warranties only provide coverage if you maintain or use the product as directed. For example, a warranty may cover only personal uses -- as opposed to business uses -- of the product. Make sure the warranty will meet your needs.

WHO DO YOU CONTACT TO OBTAIN WARRANTY SERVICE?

It may be the seller or the manufacturer who provides you with service.

WHAT WILL YOU HAVE TO DO TO GET REPAIRS?

Look for conditions that could prove expensive, such as a requirement that you ship a heavy object to a factory for service.

WHAT WILL THE COMPANY DO IF THE PRODUCT FAILS?

Find out if the company will repair it, replace it, or return your money.

SPOKEN WARRANTIES

Sometimes a salesperson will make an oral promise, for example, that the seller will provide free repairs. However, if this claim is not in writing, you may not be able to get the promised service. Have the salesperson put the promise in writing, or do not count on the service.

SERVICE CONTRACTS

When you buy a car, home, or major appliance you may be offered a service contract. Although often called "extended warranties," service contracts are not warranties. Warranties are included in the price of the product. Service contracts come separately from the product, at an extra cost. To decide whether you need a service contract, you should consider several factors; whether the warranty already covers the repairs that you would get under the service contract; whether the product is likely to need repairs and their potential costs; how long the service contract is in effect; and the reputation of the company offering the service contract. To learn more about buying a service contract, write: "Service Contracts," Public Reference, Federal Trade Commission, Washington, D.C. 20580.

IMPLIED WARRANTIES

Although warranties are not required by law, there is another type of warranty that is. It is called an "implied" warranty. Implied warranties are created by state law, and all states have them. Almost every purchase you make is covered by an implied warranty. The most common type of implied warranty is called a "warranty of merchantability." This means that the seller promises the product will do what it is supposed to do. For example, a car will run, a toaster will toast.

Another type of implied warranty is the "warranty of fitness for a particular purpose." This applies when you buy a product on the seller's advice that it is suitable for a particular use. For example, a seller who suggests that you buy a certain sleeping bag for zero-degree weather warrants that the sleeping bag will be suitable for zero degrees.

If your purchase does not come with a written warranty, it is still covered by implied warranties unless the product is marked "as is," or the seller otherwise indicates in writing that no warranty is given. Several states, including Kansas, Maine, Maryland, Massachusetts, Mississippi, Vermont, West Virginia, and the District of Columbia, do not permit "as is" sales.

If problems arise that are not covered by the written warranty, you should investigate the protection given by your implied warranty.

Implied warranty coverage can last as long as four years, although the length of the coverage varies from state to state. A lawyer or a state consumer protection office can provide more information about implied warranty coverage in your state.

PREVENTING PROBLEMS

To minimize the chance of a problem with your warranty, take these precautions.

* Consider the reputation of the company offering the warranty. If you are not familiar with the company, ask your local or state consumer protection office or Better Business Bureau if they have any complaints against the company. A warranty is only as good as the company that offers it.

* Before you buy, read the warranty. See exactly what protection the warranty gives you.

* Save the sales slip and file it with your warranty. You may need it later to document the date of your purchase or, in the case of a warranty limited to the first purchaser, that you were the original buyer.

* Perform any maintenance or inspections required by the warranty.

* Use the product according to the manufacturer's instructions. Abuse or misuse of the product may cancel your warranty coverage.

RESOLVING DISPUTES

If you are faced with any problems with a product or with obtaining the promised warranty service, here are some steps you can take.

* Read your product instructions and warranty carefully. Do not expect features or performance that your product was not designed to give, or assume warranty coverage that was never promised. Having a warranty does not mean that you automatically get a refund if the product is defective. The company may be entitled to try to fix it first. In addition, if you reported a defect to the company during the warranty period and the product was not fixed properly, the company must correct the problem, even if your warranty has expired.

* Discuss your complaint with the seller. Disputes usually can be resolved at this level. But if you cannot reach an agreement, write the manufacturer. Your warranty should list the company's mailing address. Send all letters by certified mail and keep copies.

* If you cannot get satisfaction from either the seller or manufacturer, contact your local consumer protection agencies. They may be able to help.

* Inquire about dispute resolution organizations. They arbitrate disagreements when both you and the company are willing to participate. The company or local consumer protection office can suggest organizations to contact.

* Consult your warranty; dispute resolution may be a required first step before going to court.

* Most states have small claims courts. If the amount of money in dispute is relatively small, usually less than $750, you can file a lawsuit in small claims court. The costs are low, procedures are simple, and lawyers usually are not needed. The clerk of the small claims court can tell you how to bring your lawsuit and what the dollar limits are in your state.

* If none of these actions resolves your dispute, you may want to consider a lawsuit. The Magnuson-Moss Act allows you to sue for damages or for any other type of relief the court awards, including legal fees. A lawyer will be able to advise you whether to proceed with a lawsuit.

Although the FTC cannot represent you directly in a dispute with a company, it wants to know if companies are meeting their warranty obligations. To report violations of the Warranty Act, or other warranty-related problems, send your complaints to: Correspondence Branch, Federal Trade Commission, Washington, D.C. 20580.
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modified from 11/92 Federal Trade Commission material

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