FTC Seeks Comment on Proposed Rule Amendments Related to the E-Warranty Act

The Federal Trade Commission is seeking public comment on proposed amendments to its Disclosure Rule and Pre-Sale Availability Rule to give effect to changes required by the 2015 E-Warranty Act, Pub. L. No. 114-51.

As directed by the 1975 Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. § 2302, the FTC developed the Disclosure Rule (16 C.F.R. Part 701, titled “Written Consumer Product Warranty Terms and Conditions”) and Pre-Sale Availability Rule (16 C.F.R. Part 702, titled “Pre-Sale Availability of Written Warranty Terms”). The Disclosure Rule provides disclosure requirements for written warranties on products that cost more than $15, specifies language for certain disclosures, and requires simple language in a single document. The Pre-Sale Availability Rule details the methods by which warrantors and sellers must provide warranty terms before a sale.

The E-Warranty Act amended the MMWA to allow warrantors to comply with the law by posting warranty terms to an Internet website, as long as the warrantor also provides consumers with a non-Internet based method to obtain warranty terms, and to allow certain sellers to use electronic methods to provide consumers with warranty terms pre-sale.

In order to implement the changes required by the E-Warranty Act, the Commission proposes to revise the Pre-Sale Availability Rule to allow warrantors to post warranty terms on their websites if they also provide an offline method for consumers to obtain them, and to allow certain sellers to provide warranty terms pre-sale in an electronic format. The Commission also proposes to amend the Disclosure Rule to specify that disclosures mandated to appear “on the face” of a warranty posted online or displayed electronically must be placed in close proximity to where the text of the warranty terms begins.

The Commission vote approving the Notice of Proposed Rulemaking on the Disclosure Rule and Pre-Sale Availability Rule was 3-0. The Notice is available on the FTC’s website and as a link to this press release and soon will be published in the Federal Register. Instructions for filing comments appear in the Notice. Comments must be received on or before June 17, 2016. All comments received will be posted on the FTC’s website. (FTC File No. P044403; the staff contact is Gary L. Ivens, Bureau of Consumer Protection, 202-326-2330).

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