BMW settles with FTC over Mini warranty refusals

Mini violated federal law by telling customers their warranties would be void unless they used Mini parts and official service centers.

BMW Group has dodged a fine and criminal charges in its settlement with the Federal Trade Commission over warranty practices within its Mini division.

The agency had accused the company of violating the Magnuson-Moss Warranty Act by telling customers that their warranty would be void if they did not use official Mini parts and go directly to franchised dealers for maintenance. Such demands can only be made if the parts and services are provided by the company without charge.

The FTC cited documents telling customers that the warranty would not cover repairs that merely include "non-genuine" Mini parts. The program was compliant for the first three years of free warranty coverage, but ran afoul when entering the 'limited' warranty for the fourth year of ownership.

"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 consumer-protection bureau. "As a result of this order, BMW will change its practices and give MINI owners information about their rights."

The company has agreed to inform customers of their right to use third-party parts and service without voiding warranty coverage, unless such parts and services are provided for free. The company is also barred from telling customers that they should use official parts and service to ensure a vehicle's safe operation or maintain its value.

Despite the warranty issues, Mini held the second position among mass-market brands in the latest JD Power customer-service index (CSI) study.

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