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Media > Newsletters > Consumer Advocate > December 2016 > Know Your Consumer Rights — Warranties and Service Contracts

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Know Your Consumer Rights — Warranties and Service Contracts

Have you recently purchased new appliances for your home, such as a refrigerator, washer, or clothes dryer? Are you thinking about remodeling your home or getting your roof repaired? These are likely to be costly investments, but understanding warranties and service contracts can help you make the most of your money and avoid problems.
A warranty is a company’s promise to stand behind its product. A federal law called the Magnuson-Moss Warranty Act sets requirements for entities that provide warranties. If a manufacturer offers a warranty, it must be available for the consumer to read before the purchase is made. Warranties can also vary in length and coverage. A new car warranty may last three years or 36,000 miles and the warranty may state that the car's manufacturer will fix or pay for certain problems that occur during that period. However, a product that is purchased “as is” has no warranty and the seller is not responsible for any repairs.
Before purchasing goods and services that involve warranties, it is important to evaluate and compare warranties:
  1. Find out how long the warranty lasts by determining when coverage begins and ends. Also, look for any conditions that would void or cancel coverage.
  2. Determine who will perform services under the warranty, and consider where you will need to take the product for repairs. Also, determine whether the warranty covers shipping costs and if you will need to keep the original packaging for the warranty to be honored.
  3. Find out the company’s responsibilities under the warranty and determine if it will repair the item, replace it, or refund the purchase price.
  4. Figure out exactly what is covered under the warranty, and check for exclusions in coverage. Be aware that some warranties require the customer to pay for labor  costs.
  5. Be sure to get all warranties in writing. If a salesperson makes verbal promises about a warranty, make sure to get those promises put in a written contract, otherwise they are not guarantees.
An extended warranty lengthens the coverage provided by the regular warranty, usually by two or three years and is generally offered by the manufacturer or a third party. If you do end up purchasing an extended warranty, make sure to check that the warranty provider has a good reputation. You can check complaints filed against a company with the Ohio Attorney General’s Office and the Better Business Bureau.
If you are buying a car, an electronic device, or a major appliance, you may be offered a service contract. Although often confused with warranties, a service contract is different. A service contract is a promise to perform or pay for certain repairs or services. A warranty is usually included in the price of an item, while a service contract costs extra and may be offered by a retailer, the manufacturer, or a third party. A service contract may cover specific parts of the product or specific repairs such as painting your house or tuning-up your car. Because some service contracts may duplicate the warranty coverage that the manufacturer provides, it is important to compare the service contract with the warranty.
Be sure to read future editions of the “Consumer Advocate” for more the “Know Your Consumer Rights” articles.
To report a scam or unfair business practice, contact the Ohio Attorney General’s Office by visiting or call 800-282-0515.