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October 6th, 2014
FTC Amends Mail or Telephone Order Merchandise Rule
The FTC recently issued final amendments to the Mail or Telephone Order Merchandise Rule (also known as "the 30 Day Rule"), which requires sellers to have a reasonable basis for stating they can ship ordered items to consumers within the time specified or if no time is specified, within 30 days. The Rule also requires that, if the promised shipping time cannot be met, the seller must obtain the buyer's consent to a shipping delay or must refund payment for the unshipped merchandise. The Rule was issued in 1975 and the FTC sought public comments in 2007, and proposed amendments in 2011. The big news is that the Rule, which had previously applied to mail and telephone orders, has now been clarified to apply to all online orders as well. Other amendments:
- The Rule now allows sellers to provide refunds and refund notices to buyers by any means at least as fast and reliable as first-class mail;
- The Rule clarifies seller obligations in cases where buyers use debit cards, prepaid gift cards, and other payment methods not previously covered by the Rule;
- The Rule now requires that refunds be made within seven working days for purchases made using third-party credit, such as Visa or MasterCard cards. For credit sales where the seller is the creditor (e.g., where merchants accept payment via their own store charge cards) the refund deadline remains one billing cycle.
Whether you make a specific shipment representation or rely on the 30-day rule, it's always a good idea to be reliable in your shipment promises and practices. Merchants who violate the 30 Day Rule may be sued by the FTC for injunctive relief, civil penalties of up to $16,000 per violation, and consumer redress. State law enforcement agencies can also take action for violations of state consumer protection laws, some of which may provide buyers with rights that are equal to or greater than the rights granted by the 30 Day Rule.
The FTC's summary of the Rule is available here.
For more information about the 30 Day Rule or other FTC Rules and Guides, or about any other advertising or marketing law issues, please contact Terri Seligman at (212) 826-5580 or email@example.com, Claudine Wilson at (212) 705 4842 or firstname.lastname@example.org, or Jess Smith at (212) 705-4876 or email@example.com, or any other member of the Frankfurt Kurnit Advertising Group.
Other Advertising Law Alerts
New Low-Budget Waiver is Now Available for Digital Commercial Productions
Advertisers and agencies that are signatories to the SAG-AFTRA Commercials Contract can now take advantage of a new waiver issued by SAG-AFTRA and the Joint Policy Committee on Broadcast Talent Union Relations when producing low-budget digital commercials.
November 10 2017
FTC Updates Endorsement Guide FAQs and Settles First-Ever Action Against Individual “Influencers”
Recent developments demonstrate the FTC's continued interest in social media endorsements.
September 11 2017
FTC Announces Reforms to Its Investigative Process
Recently, the FTC announced a set of internal reforms intended to improve the process by which the Commission investigates unfair, deceptive and fraudulent business practices. The reforms relate to the Civil Investigative Demands ("CID") that the FTC's Bureau of Consumer Protection issues to request information from investigation targets.
September 7 2017