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June 2017 Government Affairs Update

 

What's Inside: 

  • AOCA Customer Survey Proves Need for MMWA Disclosure in New Jersey
  • New Jersey MMWA Mandatory Disclosure Bill Passes Assembly & Heads to Senate
  • More States Seeking Anti-Fast Lube Regulation of Oil Change Intervals 
  • AOCA Joins the California BAR Advisory Group
 

AOCA Customer Survey Proves Need for MMWA Disclosure in New Jersey

Although violations of the MMWA prohibition against tie-in sales hurt installers and their customers alike, lawmakers are far more interested in consumer pain than anti-competitive behavior between businesses. That means the most persuasive evidence of the need for mandatory Magnuson Moss Warranty Act (MMWA) rights disclosure comes from consumers. However, lawmakers haven’t seen significant statistics based on consumer complaints because most consumers don’t know they have MMWA rights in the first place—in New Jersey 91% never heard of MMWA. This is why AOCA developed the Customer Warranty Rights Survey for fast lube operators.

Giving customers the survey achieves all of the following goals:

  • Educates consumers about their right to use aftermarket parts and services, which they can then insist upon to avoid bullying going forward.
  • Reveals the primary sources of misinformation regarding tie-in sales requirements; i.e., dealerships, owner’s manuals, commercial advertisements, etc.
  • Identifies which kinds of dealerships may be engaging in prohibited tie-in sales the most.
  • Provides state-specific evidence lawmakers need to pass mandatory MMWA disclosure requirements for dealerships and/or automakers.

AOCA’s survey is available in multiple formats for all members to use. Click here to view the survey.

New Jersey Customer Warranty Rights Survey Results from 2016 are available here.

New Jersey MMWA Mandatory Disclosure Bill Passes Assembly & Heads to the Senate

On June 12th, AOCA members Jay Rosenthal, Vice President of New Jersey Lubrication, and Tom Rodolico of Egg Harbor Lubrication testified before the New Jersey Assembly Consumer Affairs Committee in support of A2612, an Act requiring Magnuson Moss Warranty Act (MMWA) disclosure to new car buyers. They impressed upon the Committee that the 2016 AOCA New Jersey Customer Warranty Rights Survey demonstrates the only way to stop automakers and dealerships from tying warranty coverage to branded products and services is to empower consumers with knowledge of their MMWA rights through a mandatory measure like A2612. Read their full testimony here

“[We surveyed] customers who had been told they were required to use OEM parts and/or services to maintain warranty coverage. This isn’t easy information to obtain, because many people are afraid to risk calling out a powerful company on bad behavior. Within a mere month, however, fifty-eight customers came forward to tell their stories,” explained Mr. Rosenthal. “Ninety-one percent of respondents did not know about their MMWA rights before they took the survey. Sixty-five percent of them were told by an automobile dealership employee that they were required to use OEM parts and/or service to maintain warranty coverage.”

The Consumer Protection Committee passed A2612 that afternoon.  About the experience, Mr. Rosenthal said, “It wasn’t daunting or overwhelming. With the support of AOCA, it was empowering. The legislators were very interested in what we had to say.”

Then on June 22, 2017, New Jersey AOCA members rallied to call their Assembly members, ultimately convincing them to pass A2612 by a huge margin: 59 (for) to 12 (against) with 4 abstentions. Our next step is to educate the Senate Commerce Committee in July/August regarding the dynamics of the legislation. New Jersey members interested in participating in these events are encouraged to contact AOCA.

 

More States Seeking Anti-Fast Lube Regulation of Oil Change Intervals 

New York Assembly member Yuh-Line Niou (District 65) has introduced A7914, legislation to create a civil penalty ($500 first offense; $1,000 per each subsequent offense) for automotive service facilities, like fast lubes, that provide any interval-related information on decals, stickers, receipts, email, etc., except the actual mileage on a vehicle’s odometer at the time of an oil change. Fast lubes would also be fined for failing to post a conspicuous sign stating:

"OIL CHANGES EVERY 3,000 MILES DO NOT NECESSARILY RESULT IN BETTER VEHICLE PERFORMANCE OR LONGER ENGINE LIFE. REFER TO YOUR MANUFACTURER'S RECOMMENDED MAINTENANCE SCHEDULE FOR OIL CHANGE GUIDANCE."

This thinly veiled attack on the traditional fast lube routine maintenance approach has been proposed over the past several years by various New York representatives. Like many consumers, they have become divorced from the most basic concept that proper lubrication is essential to combustion engine function. Failure to maintain proper lubrication leads to a host of vehicle performance failures, including lower fuel economy, higher emissions, engine sludge, and even catastrophic engine damage. For this reason, vehicle owners and automotive service providers historically followed a simple, routine guideline of oil changes every 3,000 miles or three months, whichever came first. Although arguably still a conservative and safe way to ensure proper lubrication, however, the old guideline has fallen out of use due to a combination of six factors:

  1. Automakers have created highly individualized vehicle oil change intervals.
  2.  Automakers have successfully marketed vehicle sales and ownership costs using only the high end of oil change service intervals while omitting marketing references to their own shorter interval recommendations when the consumer is within driving conditions that require the low end intervals. The majority of consumers fall within this category.
  3. “Free” dealership oil changes for introductory period.
  4. The advent of new technology:
    • Oil life monitors;
    • Longer life engine oil; and
    • Renewable fuel engines.
  5. Loss of classic driver’s education and auto shop classes that ensured high school students would become consumers who understood the connection between engine function, engine life, and preventative maintenance.
  6. State lawmakers and class action lawsuits that view #1 - #4 as indicators that all consumers should push their oil change intervals as far as possible, and anyone who suggests otherwise is perpetrating fraud.

Instead of protecting engines for the safest and longest vehicle use possible, the primary focus has shifted to promoting consumer achievement of the longest service intervals possible. Professional fast lube operators have had no choice but to change customer service interval recommendations. The new simple option has became repeating the automaker’s recommended interval range and letting the customer choose the timing based on his or her understanding of their driving habits. AOCA’s biggest challenge now is educating lawmakers and regulators who don’t know about engine function or changes in the service marketplace.

Meanwhile in California, the Bureau of Automotive Repair (BAR) has published a draft proposal to regulate oil change intervals similarly to state Senator Ben Allen’s 2016 legislation SB 778. This is not good news for any automotive service providers whether or not they’re registered as Automotive Repair Dealers with BAR. The regulatory requirements, like SB 778, are based on a faulty premise that an oil change interval recommendation shorter than the longest end of a vehicle’s severe-to-normal range is presumptively fraudulent, as in recommending unnecessary services.

Under the draft proposal, registered Automotive Repair dealers would be required to include the following disclosure language on or attached to every invoice for an oil change:

“It is important to change your oil at the proper intervals. Your vehicle manufacturer publishes oil change intervals in your owner’s manual and on the manufacturer’s website.”

This requirement is problematic for several reasons. First, it creates a new form of liability for failure to provide the disclosure. Second, it requires aftermarket installers to promote automakers’ websites, which notoriously promote their proprietary parts and dealership services. In other words, the proposed regulation would require fast lubes to direct customers to their competitors. It also implies that automakers’ owner’s manual schedules are always correct and that Automotive Repair Dealers should not exercise their diagnostic expertise to support customers on a case by case basis.

The draft proposal would also require that any Automotive Repair Dealer who recommends a timeframe, date or mileage interval for an oil change that “deviates from the vehicle manufacturer’s published maintenance schedule” must provide a written explanation for the recommendation.

AOCA is in the process of drafting a comprehensive response on the subject of customer management of oil change intervals that will be appropriate for both New York and California actions, as well as other state and federal inquiries on the subject.

 

AOCA Joins the California BAR Advisory Group

Since a significant number of AOCA California members have added services defined as “repairs” in California, the Bureau of Automotive Repair recently granted AOCA a seat on the Bureau’s Advisory Group. Their meetings take place four times a year—January, April, July, and October—usually on the third Thursday of the month. These meetings are recorded and can be viewed at https://www.bar.ca.gov/about_bar/bar_advisory_group.html

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