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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 firstname.lastname@example.org, Claudine Wilson at (212) 705 4842 or email@example.com, or Jess Smith at (212) 705-4876 or firstname.lastname@example.org, or any other member of the Frankfurt Kurnit Advertising Group.
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