FTC Seeks Comments on Proposed Regulation Improving Prescreen Opt-Out Notices

The Federal Trade Commission is seeking public comment on a proposed regulation to improve notices of consumers’ right to opt out of prescreened solicitations for credit or insurance. Comments on the proposed rule must be submitted on or before October 28, 2004. At the close of the comment period, the Commission will review the comments, modify the proposed rule as appropriate, and issue the rule as final.

All “prescreened” solicitations, such as pre-approved credit card offers mailed to consumers, are required by law to inform consumers that they have the right to opt out of receiving future similar offers by calling a toll-free telephone number. The Fair and Accurate Credit Transactions Act of 2003 (FACTA) directs the FTC to make a rule establishing the format, manner, and type size of consumer opt-out notices so that the notices are “simple and easy to understand.” The Commission’s proposed rule would require marketers to include a “layered” notice in all prescreened solicitations, consisting of a short and very prominent notice informing consumers that they have the right to opt out and listing the telephone number, and a longer notice informing them of additional related rights. The proposed rule includes “model” notices in English and Spanish that companies can use to comply with the rule.

To gain a better understanding of how consumers understand different versions of prescreen opt-out notices in solicitations, the FTC commissioned a consumer study. The study shows that the notices that would be required by the proposed rule are significantly more effective than notices currently used to notify consumers of their opt-out right. The survey report and a report analyzing the survey results are posted at http://www.ftc.gov.

Comments can be filed electronically at https://secure.commentworks.com/ftcprescreen/ and following the instructions on the Web-based form. Written comments should refer to “FACTA Prescreen Rule, Project No. R411010 ” on both the envelope and the text, and should be mailed to the following address: Federal Trade Commission, FACTA Prescreen Rule, Post Office Box 1030, Merrifield, VA 22116-1030. Courier and overnight deliveries should be delivered to: Federal Trade Commission/Office of the Secretary, Room H-159 (Annex R), 600 Pennsylvania Ave., N.W., Washington, DC 20580. Comments containing confidential material must be filed in paper form. Written comments must be submitted on or before October 28, 2004.

The Commission vote approving publication of the Federal Register notice was 5-0.

Copies of the Federal Register Notice are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. R411010)