FTC Announces Staff Report on Mail or Telephone Order Merchandise Rule

As part of the Federal Trade Commission’s systematic review of all of the agency’s rules and guides, the FTC staff issued a report on proposed amendments to the Mail or Telephone Order Merchandise Rule, and the Commission is seeking public comment on the report.

The Rule, issued in 1975, requires sellers who solicit buyers to order merchandise through the mail or by phone to have a reasonable basis to expect that the sellers can ship within the advertised time frame, or, if no time frame is specified, within 30 days.  The Rule also requires that, when a seller cannot ship within the promised time, the seller must obtain the buyer’s consent to a delay in shipping or refund payment for the unshipped merchandise.

In 2007, the FTC sought public comment on how the Rule could be amended to address changes in technology and commercial practices.  Based on a review of comments received, in October 2011 the FTC proposed amendments to the Rule that would:

• Clarify that the Rule covers orders placed over the Internet;
• Revise the Rule to allow sellers to provide refunds and refund notices to buyers by any means at least as fast and reliable as first-class mail;
• Clarify sellers’ obligations when buyers use payment methods not spelled out in the Rule, such as debit cards or prepaid gift cards; and
• Require that refunds be made within seven working days for purchases that were made using third-party credit, such as Visa or MasterCard cards.  For credit sales where the seller is the creditor (such as merchants using their own store charge cards) the refund deadline would remain one billing cycle.

An FTC publication, A Business Guide to the FTC's Mail or Telephone Order Merchandise Rule, offers information about the Rule and how to comply.

The Commission vote approving a Federal Register Notice announcing the availability of the report was 4-0.  The report is available on the FTC’s website and as a link to this press release; the announcement will be published in the Federal Register soon.  Comments must be received by July 15, 2013.  All comments received will be posted at https://ftcpublic.commentworks.com/ftc/mtorstaffreport/.  (FTC File No. P924214; the staff contact is Jock K. Chung, Bureau of Consumer Protection, 202-326-2984)

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