FTC Seeks Public Comment on a Set of Warranty-Related Rules and Guides

As part of its ongoing periodic review of its rules and guides and in keeping with the objective to eliminate obsolete or unnecessary regulatory requirements, the Federal Trade Commission is seeking public comment on a set of warranty-related rules and guides -- its Interpretations on the Magnuson-Moss Warranty Act; its Rule Governing Disclosure of Written Consumer Product Warranty Terms and Conditions (Rule 701); its Rule Governing Pre-Sale Availability of Written Warranty Terms (Rule 702); and its Guides for the Advertising of Warranties and Guarantees (Guides). The FTC requests comments about the overall costs and benefits of the guides and their regulatory and economic impact. Comments will be accepted for 60 days, until June 3.

The Magnuson-Moss Interpretations represent the Commission’s views on various aspects of the statute and are intended to clarify the Act’s requirements. Rule 701 specifies the information which must appear in a written warranty on a consumer product. Rule 702 details the obligations of sellers and warrantors to make warranty information available to consumers prior to purchase. The Advertising Guides are intended to help advertisers in determining what might be unfair or deceptive practices in the advertising of warranties or guarantees. The Commission seeks public comment on a number of questions, including the following:

• Is there a continuing need for these Interpretations, Rules, and Guides?
• What benefits have these Interpretations, Rules, and Guides provided to consumers who purchase warranted products or services affected by the Act?
• Have these Interpretations, Rules, and Guides had a significant economic impact (costs or burdens) on consumers?
• What significant benefits or costs (including costs of compliance) have they had on firms subject to their requirements?
• What changes, if any, should be made to these Interpretations, Rules, and Guides to reduce the burden or costs imposed on the firms subject to their requirements?
• What changes, if any, should be made to these Interpretations, Rules, and Guides to increase their benefit to consumers?
• Do the Interpretations, Rules, and Guides overlap or conflict with other federal, state, or local laws or regulations?

In addition, the Commission specifically seeks comment on the following questions with regard to Rule 701:

• What would be the economic impact on small businesses from leaving Rule 701 unchanged?
• Are there any regulatory alternatives that would reduce any adverse economic impact of Rule 701, yet comply with the mandate of the Magnuson-Moss Warranty Act?
• What are the aggregate costs and benefits of Rule 701? Are there any provisions in the Rule that are not necessary to implement the Magnuson-Moss Warranty Act or that have imposed costs that are not outweighed by the benefits? Who has benefited and who has borne the cost? Have the costs or benefits of the Rule been dissipated over time?

The request for public comment concerning the Interpretations, Rules and Guides will be published in the Federal Register today. Comments will be accepted for 60 days, until June 3. Comments should be addressed to: Secretary, Federal Trade Commission, Room 159, 6th Street and Pennsylvania Avenue., N.W., Washington, D.C. 20580 Comments should be identified as “Warranty Rules-- Comment.”

The Commission vote to publish the Federal Register notices concerning the guides was 5-0..

Copies of the Federal Register notices, and the Interpretations, Rules, and Guides, are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov

(FTC File No. P964403)