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Kiss Your Written Warranty Goodbye

warrantyFor decades, federal law has required manufacturers that guarantee their products to include a written warranty on or in the box containing the product. Retailers have also had to make available a physical copy of all warranties for review by prospective purchasers right in the store.

That is all about to change because of a revision of the Magnuson-Moss Warranty Act of 1975 that was just signed into the law on September 24. The amendment, called the E-Warranty Act of 2015 directs the Federal Trade Commission to revise its rules within one year to allow e-distribution of product warranties.

*MOUSE PRINT:

Manufacturers will now be allowed to merely include a link on or in their product packaging directing the purchaser to the warranty on its website. To accommodate those without Internet access, manufacturers must provide a telephone number or physical mailing address to contact the manufacturer to obtain a copy.

Similarly, retailers will no longer have to have physical copies of all warranties in a binder for customers to review before purchase, but can alternatively provide access to them electronically in the store.

Is this good for consumers? MrConsumer says absolutely not! Why should I as a purchaser have to jump through hoops just to get a copy of the manufacturer’s warranty for the product I just purchased? It should be there right in the box. Period. If they don’t provide you with a copy of the warranty in the box, aren’t you less likely to know you even have one and less likely to use it? And who do you think that is going to benefit?

This past June, Consumer World conducted a spot-check of 20 online stores which revealed that they failed to post the warranty electronically on their websites for four-out-of-five items checked. Under current FTC rules, online sellers either had to post the actual warranty on their website or tell customers how to obtain it. So while the idea of making warranties available electronically may be forward thinking, if stores or manufacturers don’t actually do it, thanks for nothing.

If there is any bright side to this new law, it is that the FTC can now fix an oversight in the recent review of its warranties rules, and require online sellers to post the actual product warranty for everything they sell (rather than be able to direct shoppers to the manufacturer).

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Upgrade iPhone Yearly Forever for $15 a Month?

  To promote the launch of its “iPhone Forever” plan, Sprint is only charging $15 a month for the just introduced iPhone 6S along with the privilege that lets customers get a new iPhone every year. That is less than half the monthly cost for Apple’s own upgrade plan.

Sprint Forever

This means you are basically paying $180 a year to have the latest iPhone. For people who always must have the latest phone, this could be quite the deal … except for the fine print.

*MOUSE PRINT:

iPhone Forever terms

Besides learning that this is a 22-month lease and that you are responsible for [edited] insurance, what may have looked like a given to some — that you would only pay $15 a month and get annual upgrades forever — that monthly charge is only guaranteed for the first phone. What is not stated here in the headline, but also required, is that you trade in a smartphone when you first sign up for the plan.

According to a Sprint telephone representative, one year from now if you want to trade up to the iPhone 7, you must trade in the iPhone 6S, sign a new 22 month lease, and make monthly payments of the then current rate. She said you will owe nothing on the remaining 10 months of the original lease.

Like “unlimited,” “forever” means whatever the cell companies choose to define it as.

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Say Bye-Bye to $199 iPhones at Verizon

  As of August 13, Verizon Wireless is no longer going to subsidize the purchase of new cellphones. That means you can kiss that $199 price for iPhone 6 or Samsung Galaxy S6 goodbye. When you get a new phone, you’ll be asked to pay around $650 for those high-end phones, but you can do so in monthly installments of about $27 to soften the blow. Other phones will be available at other prices. Current customers can apparently continue to renew their two year contracts and get subsidized phones, according to the AP.

On the bright side, elimination of subsidies also means the elimination of two-year contracts. So you are no longer bound to remain a customer for 24 months. You will, however, need to fully pay off the remaining monthly payments on your phone if you choose to leave Verizon.

Now the big question: Since you are now paying full price for the phone, are Verizon’s monthly rates for service lower than they were? Remember, depending on the plan, they did have embedded in them a roughly $20 charge to cover the cost of that $650 phone that you got for only $199.

Old plan pricing choices:

Verizon old plan phone costs

In the old system, you had three choices: pay for the phone in full ($650), pay in 24 equal installments ($27.08), or pay $199 (with a two-year contract.)

In the new system, you only have two choices: pay $650 in full or pay it off in 24 installments of $27.08:

new payment options

Besides the cost of the phone, there has always been a line charge, or a charge for the cost of the service per smartphone. The old charge was $40 per line, but if you were on “Edge,” you got a $15 monthly discount making it $25.

Data charges were separate charges also. In the old system, there were many choices with varying prices. Some examples, old/new: 3 gigs – $50/$45; 6 gigs – $70/$60.

Putting it all together, here is the old pricing for an iPhone 6 with monthly installments, on Edge, and with 3 gigs of data:

old total

Here under the new system is pricing for an iPhone 6 with monthly installments and 3 gigs of data:

new system pricing

In this scenario, you are paying $10 a month less than in the former system.

So how does this compare to the old system if you had gotten an iPhone 6 for $199 upfront with 3 gigs of data? You would have been paying $90 a month ($40 for line, $50 for data) plus the equivalent of $8.33 for the phone itself, or $98.33 per month. It is now $6.25 a month cheaper.

At least in these scenarios, the new plan is a little less money, but the rate shock of paying $650 for a phone may still be too bitter a pill to swallow for some. The problem is that you don’t have a ton of alternatives since increasingly the other carriers are also moving away with subsidized telephones.