FTC Wants to Strengthen Mail-Telephone Rules

The Federal Trade Commission is proposing some changes to its venerable Mail or Telephone Order Merchandise Rule, first issued back in 1975, to make sure it remains relevant in the Internet age.

The rule requires that marketers who solicit buyers to order merchandise through mail or telephone must have a reasonable basis to expect that they can ship ordered merchandise within the time frame they advertise, 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, the FTC has concluded that the rule continues to benefit consumers and will be retained. In addition, the agendy  proposes the following amendments:

• Clarify that the rule covers all 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;
• 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.