FTC Gives Console Makers Ultimatum When It Comes To Illegal Warranty Stickers

So in case you missed it back when we reported it back in April, the FTC issued a warning to six console makers over its product warranties indicating that some questionable things were going on.

But now that saga is moving along to the next step, as the FTC has actually issued a warning to these companies -- remove something from your consoles, or face potential "legal action."

Per this report from Motherboard, the Federal Trade Commission has noted that these companies have gotten into trouble over telling consumers that getting third-party repairs on their consoles voids their warranty and considers it "illegal." In fact, if you actually opened your PlayStation 4, Nintendo Switch or Xbox One, you may actually see a sticker that notes that the warranty "is void" if this sticker "is removed." And that's a big no-no, according to the FTC.

It noted the following letter, in which it said that the companies must remove the stickers within a 30-day time frame:

"This letter places you on notice that violations of the Warranty and FTC Acts may result in legal action," it said. "FTC investigators have copied and preserved the online pages in question, and we plan to review your company's written warranty and promotional materials after 30 days. You should review the Warranty and FTC Acts and if necessary, revise your practices to comply with the Acts' requirements. By sending this letter, we do not waive the FTC's right to take law enforcement action and seek appropriate injunctive and monetary remedies against [company name] based on past or future violations."

This policy that the console makers are following actually violates something that was set back in 1975, the Magnuson-Moss Warranties Act. It reads that no manufacturer charging more than $5 for a product may put repair restrictions on a device that it offers a warranty for. A lot of companies have ignored this and now the FTC has taken notice.

"Warranty language that implies to a consumer acting reasonably under the circumstances that warranty coverage requires the consumer to purchase an article or service identified by brand, trade or corporate name is similarly deceptive and prohibited," the FTC said.

It's unknown if any of these companies will be complying, but more than likely they will in the hopes of avoiding legal action. We'll see what unfolds over the next few weeks.
(Hat tip to Motherboard for the scoop.)