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FTC to review Mail Order Rule

Merchandise Rule, 16 CFR Part 435 (Mail Order Rule). As detailed in the notice, the Commission is seeking comment on whether to retain the Rule. To guide discussion of this issue, the Commission is seeking information on the Rule’s costs and benefits. Assuming, based on the public response to the notice, the Commission decides to retain the Rule, it also seeks to determine whether it should make three changes to the Rule in response to changes in technology and marketing practices that have occurred since the Rule was last updated in 1993.

The first potential change relates to merchandise ordered by computer. When the Commission amended the Rule in 1993 to cover telephone-order merchandise, it adopted a definition of “telephone” that was meant to extend the Rule’s coverage to all merchandise ordered by computer. Since then, the technology for accessing the Internet by computer has evolved to include means that do not use the telephone. The Commission accordingly requests comment on whether, to remove any doubt, it should amend the Rule to refer expressly to merchandise ordered by computer.

The second potential change relates to whether the Rule's list of payment methods – cash, check, money order, or credit card – should be expanded to include other payment methods that have come into use since the Rule was last amended. This would reconcile the enumeration of payment methods with other language in the Rule stating that the Rule covers mail or telephone order merchandise regardless of the method of payment.

The third potential change would provide merchants with greater flexibility in making the refunds, which they are currently required to make by first-class mail, by requiring refunds by means “at least as fast and reliable as first class mail.” The notice also requests comments on whether the FTC should renumber the Rule’s provisions to make its organization similar to that of more recent FTC rules.

The FTC is accepting comments on the proposed amendments to the Rule for 60 days after the Federal Register notice is published, through November 7, 2007. Written comments should refer to “16 CFR Part 435 Comment - Mail or Telephone Order Merchandise Rule,” and should be sent to the following address: Federal Trade Commission/Office of the Secretary, Room H-135 (Annex K), 600 Pennsylvania Ave., N.W., Washington, DC 20580. Instructions on how to send e-mail comments can be found in the notice on the FTC’s Web site.

The Commission vote approving the issuance of the Federal Register notice was 5-0. The notice will be published soon and is available now on the FTC’s Web site as a link to this press release. (FTC File No. P924214; the staff contact is Joel N. Brewer, Bureau of Consumer Protection, 202-326-2967.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.


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