Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC amends Mail or Telephone Order Merchandise Rule, (Sep 11, 2014)

By Greg Hammond, J.D.

As part of its systemic review of its rules and guides, the FTC has issued a final rule amending the “Mail or Telephone Order Merchandise Rule,” effective December 8, 2014. According to the agency’s final rule, the regulation will now be called the “Mail, Internet, or Telephone Order Merchandise Rule.”

“The Rule prohibits sellers from soliciting mail, internet, or telephone order sales unless they have a reasonable basis to expect that they can ship the ordered merchandise within the time stated on the solicitation or, if no time is stated, within 30 days,” the FTC stated. “The Rule further requires a seller to seek the buyer’s consent to the delayed shipment when the seller learns that it cannot ship within the time stated or, if no time is stated, within 30 days. If the buyer does not consent, the seller must promptly refund all money paid for the unshipped merchandise.”

According to the Commission, the original “Mail Order Merchandise Rule” was established in 1975. In 1993, the rule was expanded to cover merchandise purchased through the telephone, and was renamed the “Mail or Telephone Order Merchandise Rule.” However, amendments to the rule were proposed once again in October 2011, to expand the regulation to cover purchases made on the Internet. The Commission issued a staff report recommending approval of the amendments in April 2013, and has now voted 5-0 in favor of the final amendment.

The amendments will make the following four changes to the Rule: (1) they will clarify that the Rule covers all Internet merchandise orders, regardless of the method consumers use to access the Internet; (2) they permit refunds and refund notices by any means at least as fast and reliable as first class mail; (3) they clarify sellers’ refund obligations for orders using payment methods not specifically enumerated in the Rule; and (4) they require sellers to process any third party credit card refunds by seven working days after a buyer’s right to a refund vests.

News: ConsumerProtection FederalTradeCommissionNews