CMTA Seeks Feedback on Song Beverly Warranty Act

By CMTA Staff

Capitol Update, March 25, 2005 Share this on FacebookTweet thisEmail this to a friend

"California’s Song Beverly Warranty Act" may need to be revised due to recent technological advancements. CMTA would like to know if this is an issue that concerns you.

The Act states that every manufacturer making an express warranty on an electronic or appliance product "shall make available to service and repair facilities sufficient service literature and functional parts to effect repair of the product" for either three or seven years depending on the wholesale price (for most electronic products, the seven-year rule applies).

The problem that arises for some CMTA member companies is that with advances in technology, some service literature is considered proprietary and many of the functional parts (if not the products themselves) have lifecycles significantly shorter than the seven year time period required by the Act. The industry standard for computers, for example, is two to three years.

CMTA wonders whether California should change the time frame for repair services to a "reasonable period", as many states do, or to three to four years, as a few other states prescribe. In addition, new options for the manufacturer would allow greater flexibility and still protect consumer interests, such as (1) allowing the manufacturer itself to repair the product if the service information is proprietary and the repair data will be used to improve the product and service; and (2) allowing the manufacturer the option to "exchange" a product for a newer model or to replace parts that are equivalent or superior to the original if parts or if the technology has become outdated. (This would be done for less than the cost of a repair of a current product with a similar repair requirement).

The second issue of the Act is that it requires that every manufacturer "of consumer goods" making an express warranty in California "shall maintain in this state sufficient service and repair facilities reasonably close to all areas where its consumer goods are sold to carry out the terms of those warranties or designate and authorize repair or service facilities reasonably close ... ."  It goes on to say "all reasonable costs of transporting the goods when a buyer cannot return them ... shall be at manufacturer's expense."

In a state the size of California, it can be quite burdensome and needlessly expensive to have service and repair facilities "reasonably" close to where the consumer product is sold. For numerous electronic products it may be more cost and time efficient to exchange the product for a new one rather than to repair it.  For instance, customers can call a toll-free telephone number, receive instructions to ship the given unit in for a nominal charge and have a replacement returned more quickly and more economically than a repair could be achieved.  Assuming there is full disclosure of the process on the warranty card, this would be an appropriate change to the current Act to both provide an additional option for the manufacturer and a better outcome for the consumer.

CMTA wants to know if electronics and technology manufacturers are experiencing similar issues in their business. Some have suggested to us that many of these issues are due to advancements in technology and that a solution might not have to impact or change the Act for all products. Instead, a section could be added that addresses certain categories of electronics and technology separately (the way the Act does with cars, assistive devices, etc.).

An amendment might give customers the option of a repair or an exchange (which can be accomplished more quickly than a repair). In either case, however, the customer would have to "ship-in" the unit. The argument is that these exchanges and repairs can be accomplished more quickly and efficiently by the manufacturer, at times, rather than by various servicers spread across the state.

Please contact Matt Sutton, CMTA Legislative Director, Tax and Corporate Liability, at msutton@cmta.net if you have an interest in this policy area or with any suggested changes to this particular Act.
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