BMW settles FTC charges over Mini warranty rules

David Shepardson
Detroit News Washington Bureau

Washington — BMW AG on Thursday agreed to settle charges from the Federal Trade Commission that its Mini division violated the law by telling owners the company would void their warranty unless they used Mini dealers and parts to perform repairs and maintenance.

The FTC said BMW violated a 1975 federal law that bars companies from requiring that consumers in order to maintain their warranties use specific brands of parts or specified service centers — unless the part or service is provided to the consumer without charge.

“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.”

The settlement bars BMW from telling owners that to maintain a vehicle’s safe operation or maintain its value, “owners must have routine maintenance performed only by MINI dealers unless the representation is true and BMW can substantiate it with reliable scientific evidence.” BMW must also disclose to owners that they can use other service providers.

The FTC voted 5-0 to accept the consent agreement. The FTC will publish a description of the consent agreement soon; the public will have 30 days to comment on the agreement. The FTC is not seeking to impose any financial penalty on BMW.

BMW spokesman Kenn Sparks confirmed the company had reached an agreement. He said the Mini division did not receive any customer complaints on the matter challenged by the FTC.

“The MINI division of BMW of North America did not agree with the FTC’s claims, but believes that it is in the best interest of our customers to send the notices and avoid a potentially lengthy dispute with the FTC over the issue,” Sparks said.

Sen. Richard Blumenthal, D-Conn., said the settlement “should be a wake-up call to all car manufacturers that they can no longer get away with deceiving consumers into believing that their warranties will be voided if they do service or repair work at local shops. For too long, many auto manufacturers have misled customers with false information that bolsters their company’s bottom line. The FTC’s settlement with BMW is a critical step in ending this far-too common, shameful violation of consumer rights.”

The FTC said Mini owners have a 50,000 mile, four-year warranty and since 2002 have gotten three years of maintenance benefits without charge. The complaint cited language in BMW documents warning owners about only using Mini parts.