Target No View of Warranty Terms Until After Purchase Class Action

One provision of the Magnuson-Moss Warranty Act (MMWA) is the Pre-Sale Availability Rule, which states that retailers must allow customers to see the terms of a written warranty before the they buy the warranted items if they cost more than $15. But the complaint for this class action alleges that Target Corporation does not comply with this act at its stores because it makes money from selling its own protection plans.

The class for this action is all citizens of Arkansas who bought one or more products from Target that cost more than $15 and that were subject to a written warranty.

The MMWA, which was passed in 1975, governs warranties. It does not require that products have warranties, but it places certain requirements on those that do. The complaint quotes Congressman Moss as offering a longer-term purpose as well: “The bill … attempts to organize the rules of the warranty game in such a fashion to stimulate manufacturers, for competitive reasons, to product more reliable products.”

The Pre-Sale Availability Rule is meant to make sure that consumers can see the full terms and conditions of warranties before they buy an item. The complaint alleges there are two purposes for this: First, it allows consumer to know what to expect if they own the item and something goes wrong. Second, it encourages competition on the basis of warranties as well as on features and price.

The complaint quotes the law as saying that the retailer must make the terms of the warranty “readily available for examination by the prospective buyer” in one of two ways. The retailer can show the warranty “in close proximity” to the item, or it can prominently display signs in the store that tell customers they may ask to examine product warranties. These rules apply to items that have warranties and that cost more than $15.

According to the complaint, Target does not do this. “Indeed,” the complaint alleges, “virtually all of the products … sold in [Target’s] stores are presented to the consumer without any acces to the product’s warranty, pre-sale. Instead, the first time the consumer is able to view the warranty is upon opening the product’s packaging, after purchase.”

The complaint alleges that Target does not comply with the law because it “has a self-serving motive: [Target] offers its own ‘protection plan’ or extended warranty to consumers at the point of sale, which provide[s] coverage that is duplicative of the free manufacturer’s warranty that already comes with the product.” If consumers don’t know that there is a warranty, or if they can’t find out about the terms of the warranty before they buy the product, then they are more likely to pay the extra money for Target’s protection plan.

Article Type: Lawsuit
Topic: Consumer
Tags: Failure to Show Terms of Warranty, Warranty