The $3 billion mobile home industry is riddled with warranty service problems, according to a new report from the Federal Trade Commission. The agency called for new regulations to help mobile home owners get such problems as leaky roofs and bad heaters fixed.
Raymond L. Rhine, the FTC presiding officer in its mobile home investigation and the author of the 322-page report, called on his agency to remedy "nagging" mobile home problems by adopting a new rule protecting consumers.
He called consumer complaints against about 100 manufacturers -- for defects ranging from faulty plumbing to bad air-conditioning units -- only the "tip of the iceberg."
Although the report points out that many companies in the mobile home industry are doing an "appropriate" job in providing warranty service, it also states that "at any point during the distribution chain, defects or problems can and do occur.
"The amount of time involved to correct a problem can be anywhere from two weeks to eight or nine months or even longer," Rhine said. "Some consumers reported that their problems had never been corrected by the dealer and they had never received a response from the manufacturer after repeated calls and letters."
The problems compound themselves, Rhine said. For instance, a leaky mobile home roof left for too long causes damage to the interior, he pointed out.
Service is bad, at least partially, Rhine said, because of "lax" arrangements between manufacturers and dealers, who can't seem to determine where the responsibility for warranty repairs lies.
Much of the problem with mobile home warranties can be traced to the fact that consumers purchasing them rely almost totally on the expertise of the dealer and the manufacturer to handle the sometimes complicated details of the entire transaction and to provide a reasonably defect-free home, the report said.
FTC staffers contended that because mobile home owners are generally either elderly persons or blue collar workers with high school educations and moderate incomes, they do not, as a group, tend to vigorously pursue their rights when defects or problems occur.
The staff found that although many manufacturers delegate substantial responsibility for warranty service to dealers, they do not have written contracts spelling this out. "as a result," Rhine said, "dealers are frequently reluctant to perform warranty service and consumers are subjected to delay."
He also said that many manufacturers "use inadequate means to select and monitor dealers, paying more attention to the dealers' sales ability than to their service capabilities."
Many manufacturers fail to ensure that the dealers they use are inspecting their mobile homes prior to sales or even competently setting them up, "both of which are necessary to provide the consumer with a livable home reasonably free of defects," Rhine said.
Rhine said that in a number of cases, manufacturers apparently do not have sufficient equipment, materials or service personnel to respond adequatly to consumer complaints.
Consequently, he concluded, "a substantial number of manufacturers do not have a reasonable basis to believe they can fully and effectively perform their warranty obligations within a reasonable time.
"It is patently unfair for manufacturers of complex and necessary products like mobile homes to issue such a warranty without having a reasonable basis for believing that they can, in most instances, perform fully," he said.