Life Does not Have Guarantees, But Your Warranty Should Pay Special Attention to Warranties and Service Contracts when Making Large Purchases
As part of its seven-part consumer alert holiday series, the New York State Division of Consumer Protection (DCP) is today informing New Yorkers about the differences between warranties and service contracts to help consumers navigate the marketplace this holiday season. Warranties are included in the price of a purchase and service contracts are a separate cost. Consumers are encouraged to understand what is already covered in the warranty before purchasing a separate service contract.
“Warranties and service contracts are often confused in the marketplace,” said New York State Secretary of State Rossana Rosado, who oversees the Division of Consumer Protection. “This holiday season don’t overpay for something that may be covered under an existing warranty, and always read the terms and conditions to understand what is covered before you buy.”
Warranties are legally enforceable assurances about certain parts of a transaction. Ordinarily, the warranty involves representations about the item being purchased. For example, a watchmaker may warrant that his or her watches can withstand submersion underneath one hundred feet of water, or an appliance company warrants their appliances will be covered for defects up to one year after purchase.
Under New York Law, warranties may be made orally or in writing and can even arise by implication without any verbal statement. Proving a warranty was made is always easier with proper documentation.
Some products, such as automobiles and appliances, may offer a service contract. Although similar to a warranty and often called an “extended warranty,” a service contract is not a warranty. Service contracts are contracts to perform repairs or maintenance on a product. To determine whether you need a service contract, consider the following:
- whether the warranty already covers the repairs and the time period of coverage that you would get under the service contract;
- whether the product is likely to need repairs and the potential costs of such repairs;
- the duration of the service contract; and
- the reputation of the company offering the service contract.
Unlike a warranty, service contracts are not included in the price of the purchase. If a warranty is already provided and covers repairs, you may be paying extra for a largely unnecessary service contract, particularly if the service contract is limited to repair of defects. An express warranty is one that is written in the product warranty, whereas an implied warranty is a legally enforceable promise that something will work as intended.
DCP recommends optimizing product and service warranties with the following tips:
- Get it in writing. Request oral warranties in writing before purchasing the product.
- Check company reviews. Go online and search for the company name and “warranty complaints” or similar search to see whether consumers face issues with that company’s warranties.
- Read and understand the warranty before you purchase the product. Typically, companies will post their warranty terms and follow-up information on their company website so you can review them.
- Save all necessary paperwork such as the original receipt, a copy of the warranty and any maintenance or repair records. When there are issues, the company will ask for basic information like model number, serial number and date of purchase.
- Use the product according to the specifications – including getting regular maintenance. Comply with all warranty requirements by maintaining and using the product in the manner specified in the warranty paperwork.
If something happens and you need to initiate a warranty:
- If there is a written warranty, read it first. The terms of your agreement are essential because they are almost always controlling. Even if the warranty has been breached, the remedy for breach may be dramatically altered by contract.
- Next, contact the warrantor. Write to or call the entity that issued the warranty. Your warranty should list the appropriate contact and that company’s mailing address. If mailing, send all letters by certified mail and save copies of the correspondence for future reference.
- Contact the Division of Consumer Protection and file a complaint. The Division mediates consumer complaints with businesses. If you are unsuccessful getting your warranty claim covered, file a complaint online at dos.ny.gov/consumerprotection.
For additional information on warranties, consult the Federal Trade Commission website: https://www.consumer.ftc.gov/articles/0252-warranties.
The Consumer Assistance Helpline 1-800-697-1220 is available Monday to Friday from 8:30am to 4:30pm, excluding State Holidays, and consumer complaints can be filed at any time at www.dos.ny.gov/consumerprotection. To view consumer alerts, consumers can visit https://www.dos.ny.gov/about/newsroom.html. The Division can also be reached via Twitter at @NYSConsumer or Facebook at www.facebook.com/nysconsumer.