- The Motor Industry Code of Practice for Vehicle Warranty Products was launched to the public on 14 July 2009 to drive up standards beyond those required by law for the provision of automotive warranties
- It replaced the Mechanical Breakdown Insurance (MBI) Code and extended the level of protection offered to motorists
- The Code of Practice ensures that vehicle warranty providers adhere to 60 individual commitments, spanning the need for honest and transparent advertising, to ensuring that the warranty information presented is clear and easy to understand
- Currently 13 vehicle warranty companies are accredited to The Motor Ombudsman Code, representing 70% of the industry’s biggest providers of warranty polices, administering over three million agreements each year
The Motor Ombudsman, the automotive dispute resolution provider, is celebrating the tenth anniversary of the launch of its Motor Industry Code of Practice for Vehicle Warranty Products. The former Office of fair Trading (OfT)’s-backed Code was unveiled to the public on 14 July 2009 under The Motor Ombudsman’s predecessor, Motor Codes, for the purpose of driving up standards, beyond those required by law, during the provision of extended automotive warranty products to vehicle owners.
In order to further raise the level of protection for consumers, it replaced and evolved the existing Mechanical Breakdown Insurance (MBI) Code of Practice to include non-insurance backed extended warranties for the first time, as well as service contracts, roadside assistance and insurance for items such as keys, tyres and vehicle replacement. Today, the comprehensive Vehicle Warranty Products Code is one of four to be found within The Motor Ombudsman’s Chartered Trading Standards Institute (CTSI)-approved Motor Industry Code of Practice portfolio, which covers the entire customer car purchase and ownership experience. A total of 13 vehicle warranty companies, around 70% of the industry’s major players, are now accredited to the Vehicle Warranty Products Code, organisations which are responsible for administering a combined three million policies every year.
The Vehicle Warranty Products Code demands that all accredited businesses adhere to a set of 60 commitments to customers, which include the use of accurate and honest advertising, a simple complaints handling process and clear information regarding what is covered and excluded in the policy. Accreditation also brings the benefit of car warranty businesses being able to direct their customers to The Motor Ombudsman’s free and impartial alternative dispute resolution (ADR) service, should they be unable to conclude an issue directly through their internal complaints process.
Since The Motor Ombudsman was established at the end of 2016, over 230 Vehicle Warranty Products Code cases have been worked on by adjudicators during the last two calendar years (namely 2017 and 2018), and around 2,800 contacts were received from consumers throughout the same period. The majority of cases resulted from point of sale disputes where motorists were either given incorrect or insufficient information about the warranty product, or where they were not made fully aware of their cancellation rights. They also resulted from claims being refused by warranty administrators or not being accepted due to a customer not adhering to their car’s prescribed servicing schedule. Ambiguous or difficult to understand warranty terms equally required The Motor Ombudsman’s adjudication service to assist with concluding a dispute.
Bill Fennell, Chief Ombudsman and Managing Director of The Motor Ombudsman, said: “The tenth anniversary of the launch of the Vehicle Warranty Products Code marks an important milestone. For many years, the Code of Practice has played an important role in defining and developing best practice guidelines in the supply of car warranty agreements, and has been instrumental in helping consumers and businesses to reach an amicable and swift outcome to warranty disputes without the need for often costly legal action. Over the next decade and beyond, it remains our continued ambition to grow the volume of businesses accredited to the Code so as to be able to provide the broadest possible coverage for today’s vehicle owners.”
To view The Motor Ombudsman’s Vehicle Warranty FAQs, visit www.TheMotorOmbudsman.org/vehicle-warranty-faqs.