BMW Settling Oil Change Suit

BMW has attempted to settle a Federal Trade Commission
charge that it illegally made warranties conditional
on consumers having all oil changes performed at
authorized service centers. BMW agreed to a pending
settlement, saying it will discontinue the practice.
On March 19, the FTC issued an administrative complaint
against BMW of North America LLC. The FTC alleged
that BMW’s Mini Division violated the “tie-in provision”
of the Magnus-Moss Warranty Act of 1975 by
stating in Mini vehicles’ owner manuals, beginning with
2012 models, that “only Mini dealers are to perform oil
changes,” lest the four-year, 50,000-mile limited warranty
be rejected.
“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
commission’s Bureau of Consumer Protection. “As a result
of this order, BMW will change its practices and give
Mini owners information about their rights [to use thirdparty
services].”
BMW has agreed to the order, but the FTC is fielding
public comments until April 21. After that the commission
will decide to accept the settlement without mention
of penalties or to prescribe fines of up to $16,000
per incident for future violations.
The Automotive Oil Change Association, which has
advocated for the order, encouraged anyone with evidence
against BMW to participate in the public comment
and urged all its members to respond to an industry
field data survey on the matter. “AOCA applauds
FTC’s action thus far, but it’s not a done deal,” the association
said in a press release last week.
The association said tie-in violations of the federal
warranty law are an epidemic for consumer rights. It
has filed official complaints against Volkswagen-Audi,
DaimlerChrysler, GM, Honda, Nissan, Mazda, Kia Motors
and BMW. “For years it seemed nothing would
move FTC – or anyone in the federal government – into
action against the politically giant automakers, but the
BMW complaint may have finally pushed them over the
edge,” AOCA said. “Overall, we’re hopeful that FTC’s
action against BMW will motivate other manufacturers
to comply with MMWA.”
There are also other ways that automakers violate
the tie-in provision. “An automaker doesn’t have to
use the phrase ‘your warranty is void unless you use our
products and services’ in order to achieve a tied product/
service result,” AOCA’s policy advisor, Joanna Johnson,
told Lube Report. “Since 2003, we’ve seen every
trick in the book.”
According to the FTC’s website, anyone from an independent
mechanic to a retail chain shop to a do-ityourselfer
can do routine maintenance and repairs on
a vehicle under warranty. However, if an engine is damaged
from the maintenance, the OEM can deny coverage
if it can prove that the maintenance or product used
during the repair caused the damage.
“Any tying of products and/or services is a problem
for consumers, aftermarket service professionals
and aftermarket manufacturers,” Johnson said. “The
most common approach seems to be tying of products.”
Johnson pointed to an alleged violation by Kia Motors
in 2012, in which the automaker claimed that its
warranties would be voided if a non-Kia oil filter was
used in oil changes. “The manufacturer’s burden of
proof is not that it need merely show an aftermarket
part ‘relates’ to damage, but that it ‘caused’ any alleged
damage,” Johnson said. “Does FTC know how many
engine problems arguably ‘relate’ to oil filter function
but aren’t necessarily caused by any problem with the
oil filter part itself? So long as they don’t have to prove
causation, Kia has a veritable smorgasbord of engine
problems available to wrongfully blame on the use of
aftermarket oil filters, and the average layperson consumer
will never know the difference.”
Johnson said AOCA is hopeful that FTC will address
the Kia complaint next.

LR COPYRIGHT 2015 • LUBE REPORT • REPRODUCED WITH PERMISSION 1
VOLUME 15 ISSUE 13
APRIL 1 2015
BY JOE BEETON