/* Here is the full text of mailorder sales regulations of

the Federal Trade Commission together with comments. */

PART 435-MAIL ORDER

MERCHANDISE

Sec.

435.1 The Rule.

435.2 Definitions.

435.1 The Rule

In connection with mail order sales in commerce, as "commerce" is

defined in the Federal Trade Commission Act, it constitutes an

unfair method of competition, and an unfair or deceptive act and

practice for a seller:

(a)(1) To solicit any order for the sale of merchandise to be

ordered by the buyer through the mails unless, at the time of the

solicitation, the seller has a reasonable basis to expect that he

will be able to ship any ordered merchandise to the buyer: (i)

Within that time clearly and conspicuously stated in any such

solicitation, or (ii) if no time is clearly and conspicuously

stated, within thirty (30) days after receipt of a properly

completed order from the buyer.

/* Paragraph a(1) provides the general rules that mailorder

sellers must either ship within thirty days or CONSPICUOUSLY

advise that the time period for an order is longer. */

(2) To provide any buyer with any revised shipping date, as

provided in paragraph (b) of this section, unless, at the time

any such revised shipping date is provided, the seller has a

reasonable basis for making such representation regarding a

definite revised shipping date.

(3) To inform any buyer that he is unable to make any

representation regarding the length of any delay unless (i) the

seller has a reasonable basis for so informing the buyer and

(ii) the seller informs the buyer of the reason or reasons for

the delay.

(4) In any action brought by the Federal Trade Commission,

alleging a violation of this part, the failure of a respondent-

seller to have records or other documentary proof establishing

his use of systems and procedures which assure the shipment of

merchandise in the ordinary course of business within any

applicable time set forth in this part will create a rebuttable

presumption that the seller lacked a reasonable basis for any

expectation of shipment within said applicable time.

(b)(1) Where a seller is unable to ship merchandise within the

applicable time set forth in paragraph (a) (1) of this section,

to fail to offer to the buyer, clearly and conspicuously and

without prior demand, an option either to consent to a delay in

shipping or to cancel his order and receive a prompt refund.

Said offer shall be made within a reasonable time after the

seller first becomes aware of his inability to ship within the

applicable time set forth in paragraph (a)(1) of this section,

but in no event later than said applicable time.

/* Here is the procedure which must be followed when an order is

not shipped within the allowed time frame. */

(i) Any offer to the buyer of such an option shall fully inform

the buyer regarding his right to cancel the order and to obtain a

prompt refund and shall provide a definite revised shipping date,

but where the seller lacks a reasonable basis for providing a

definite revised shipping date the notice shall inform the buyer

that the seller is unable to make any representation regarding

the length of the delay.

(ii) Where the seller has provided a definite revised shipping

date which is thirty (30) days or less later than the applicable

time set forth in paragraph (a)(1) of this section, the offer of

said option shall expressly inform the buyer that, unless the

seller receives, prior to shipment and prior to the expiration of

the definite revised shipping date, a response from the buyer

rejecting the delay and canceling the order, the buyer will be

deemed to have consented to a delayed shipment on or before the

definite revised shipping date.

(iii) Where the seller has provided a definite revised shipping

date which is more than thirty (30) days later than the

applicable time set forth in paragraph (a)(1) of this section or

where the seller is unable to provide a definite revised shipping

date and therefore informs the buyer that he is unable to make

any representation regarding the length of the delay, the offer

of said option shall also expressly inform the buyer that his

order will automatically be deemed to have been canceled unless

(A) the seller has shipped the merchandise within thirty (30)

days of the applicable time set forth in paragraph (a)(1) of

this section, and has received no cancellation prior to

shipment, or (B) the seller has received from the buyer within

thirty (30) days of said applicable time, a response specifically

consenting to said shipping delay. Where the seller informs

the buyer that he is unable to make any representation

regarding the length of the delay, the buyer shall be

expressly informed that, should he consent to an indefinite

delay, he will have a continuing right to cancel his order at

any time after the applicable time set forth in paragraph

(a)(1) of this section by so notifying the seller prior to

actual shipment.

/* If a second delay to ship occurs you must receive an immediate

refund or expressly agree to a refund. */

(iv) Nothing in this paragraph shall prohibit a seller who

furnishes a definite revised shipping date pursuant to

paragraph (b)(1)(i) of this section, from requesting,

simultaneously with or at any time subsequent to the offer of

an option pursuant to paragraph (b)(1) of this section, the

buyer's express consent to a further unanticipated delay beyond

the definite revised shipping date in the form of a response

from the buyer specifically consenting to said further delay.

Provided, however, that where the seller solicits consent to an

unanticipated indefinite delay the solicitation shall expressly

inform the buyer that, should he so consent to an indefinite

delay, he shall have a continuing right to cancel his order at

any time after the definite revised shipping date by so

notifying the seller prior to actual shipment.

(2) Where a seller is unable to ship merchandise on or before the

definite revised shipping date provided under paragraph (b)(1)(i)

of this section and consented to by the buyer pursuant to

paragraph (b)(1)(ii) or (iii) of this section, to fail to offer

to the buyer, clearly and conspicuously and without prior demand,

a renewed option either to consent to a further delay or to

cancel the order and to receive a prompt refund. Said offer

shall be made within a reasonable time after the seller

first becomes aware of his inability to ship before the said

definite revised date, but in no event later than the

expiration of the definite revised shipping date:

Provided, however, That where the seller previously has obtained

the buyer's express consent to an unanticipated delay until a

specific date beyond the definite revised shipping date, pursuant

to paragraph (b)(1)(iv) of this section or to a further delay

until a specific date beyond the definite revised shipping date

pursuant to paragraph (b)(2) of this section, that date to which

the buyer has expressly consented shall supersede the definite

revised shipping date for purposes of paragraph (b)(2) of this

section.

(i) Any offer to the buyer of said renewed option shall provide

the buyer with a new definite revised shipping date, but where

the seller lacks a reasonable basis for providing a new definite

revised shipping date, the notice shall inform the buyer that the

seller is unable to make any representation regarding the length

of the further delay.

(ii) The offer of a renewed option shall expressly inform the

buyer that, unless the seller receives, prior to the expiration

of the old definite revised shipping date or any date superseding

the old definite revised shipping date, notification from the

buyer specifically consenting to the further delay, the buyer

will be deemed to have rejected any further delay, and to have

canceled the order if the seller is in fact unable to ship prior

to the expiration of the old definite revised shipping date or

any date superseding the old definite revised shipping date:

provided, however, That where the seller offers the buyer the

option to consent to an indefinite delay the offer shall

expressly inform the buyer that, should he so consent to an

indefinite delay, he shall have a continuing right to cancel his

order at any time after the old definite revised shipping date or

any date superseding the old definite revised shipping date.

(iii) Paragraph (b)(2) of this section shall not apply to any

situation where a seller, pursuant to the provisions of paragraph

(b)(1)(iv) of this section, has previously obtained consent from

the buyer to an indefinite extension beyond the first revised

shipping date.

(3) Wherever a buyer has the right to exercise any option under

this part or to cancel an order by so notifying the seller prior

to shipment, to fail to furnish the buyer with adequate means, at

the seller's expense, to exercise such option or to notify the

seller regarding cancellation. In any action brought by the

Federal Trade Commission alleging a violation of this part, the

failure of a respondent-seller:

(i) To provide any offer, notice or option required by this part

in writing and by first class mail will create a rebuttable

presumption that the respondent-seller failed to offer a clear

and conspicuous offer, notice or option;

(ii) To provide the buyer with the means in writing (by business

reply mail or with postage prepaid by the seller) to exercise

any option or to notify the seller regarding a decision to

cancel, will create a rebuttable presumption that the

respondent-seller did not provide the buyer with adequate means

pursuant to paragraph (b)(3) of this section.

Nothing in paragraph (b) of this section shall prevent a seller,

where he is unable to make shipment within the time set forth in

paragraph (a)(1) of this section or within a delay period

consented to by the buyer, from deciding to consider the

order canceled and providing the buyer with notice of said

decision within a reasonable time after he becomes aware of said

inability to ship, together with a prompt refund.

(c) To fail to deem an order canceled and to make a prompt refund

to the buyer whenever:

(1) The seller receives, prior to the time of shipment,

notification from the buyer canceling the order pursuant to any

option, renewed option or continuing option under this part;

(2) The seller has, pursuant to paragraph (b)(1)(iii) of this

section, provided the buyer with a definite revised shipping date

which is more than thirty (30) days later than the applicable

time set forth in paragraph (a)(1) of this section or has

notified the buyer that he is unable to make any representation

regarding the length of the delay and the seller (i) has not

shipped the merchandise within thirty (30) days of the applicable

time set forth in paragraph (a)(1) of this section, and (ii) has

not received the buyer's express consent to said shipping delay

within said thirty (30) days;

(3) The seller is unable to ship within the applicable time set

forth in paragraph (b)(2) of this section, and has not received,

within the said applicable time, the buyer's consent to any

further delay;

(4) The seller has notified the buyer of his inability to make

shipment and has indicated his decision not to ship the

merchandise;

(5) The seller fails to offer the option prescribed in paragraph

(b)(1) of this section and has not shipped the merchandise within

the applicable time set forth in paragraph (a)(1) of this

section.

(d) In any action brought by the Federal Trade Commission

alleging a violation of this part, the failure of a respondent-

seller to have records or other documentary proof establishing

his use of systems and procedures which assure compliance, in the

ordinary course of business, with any requirement of paragraph

(b) or (c) of this section will create a rebuttable presumption

that the seller failed to comply with said requirements.

Note 1 This part shall not apply to subscriptions, such as

magazine sales, ordered for serial delivery, after the initial

shipment is made in compliance with this part.

Note 2: This part shall not apply to orders of seeds and growing

plants.

Note 3: This part shall not apply to orders made on a collect-on-

delivery (C.O.D.) basis.

Note 4: This part shall not apply to transactions governed by

the Federal Trade Commission's Trade Regulation Rule entitled

"Use of Negative Option Plans by Sellers in Commerce", 16 CFR

Part 425.

Note 5: By taking action in this area, the Federal Trade

Commission does not intend to preempt action in the same area, by

any State, municipal, or other local government. This part does

not annul or diminish any rights or remedies provided to

consumers by any State law, municipal ordinance, or other local

regulation, insofar as those rights or remedies are equal to or

greater than those provided by this part. In addition, this part

does not supersede those provisions of any State law, municipal

ordinance or other local regulation which impose obligations or

liabilities upon sellers, when sellers subject to this part are

not in compliance therewith. This part does not supersede those

provisions of any State law, municipal ordinance, or other

local regulation which are inconsistent with this part to the

extent that those provisions do not provide a buyer with rights

which are equal to or greater than those rights granted a buyer

by this part. This part also supersedes those provisions of any

State law, municipal ordinance, or other local regulation

requiring that a buyer be notified of a right which is the same

as a right provided by this part but requiring that a buyer be

given notice of this right in a language, form, or manner which

is different in any way from that required by this part.

In those instances where any State law, municipal ordinance, or

other local regulation contains provisions, some but not all of

which are partially or completely superseded by this part, the

provisions or portions of those provisions which have not been

superseded retain their full force and effect.

/* The regulation is a MINIMUM standard and states may set more

stringent standards should they so desire. */

Note 6: If any provision of this part or its application to any

person, partnership, corporation, act or practice is held

invalid, the remainder of this part or the application of the

provision to any other person, partnership, corporation, act or

practice shall not be affected thereby.

Note 7: Section 435.1(a)(1) of this part governs all

solicitations where the time of solicitation is more than 100

days after promulgation of this part. The remainder of this part

governs all transactions where receipt of a properly completed

order occurs more than 100 days after promulgation of this part.

For purposes of this part:

(a) "Shipment" shall mean the act by which the merchandise is

physically placed in the possession of the carrier.

(b) "Receipt of a properly completed order" shall mean:

(1) Where there is a credit sale and the buyer has not

previously tendered partial payment, the time at which the seller

charges the buyer's account;

(2) Where the buyer tenders full or partial payment in the proper

amount in the form of cash, check or money order, the time at

which the seller has received both said payment and an order from

the buyer containing all the information needed by the seller to

process and ship the order.

Provided, however, that where the seller receives notice that the

check or money order tendered by the buyer has not been

dishonored or that the buyer does not qualify for a credit sale

"receipt of a properly completed order" shall means the time

at which (i) the seller receives notice that a check or money

order for the proper amount tendered by the buyer has been

honored, (ii) the buyer tenders cash in the proper amount or

(iii) the seller receives notice that the buyer qualifies for a

credit sale.

(c) "Refund" shall mean:

(1) Where the buyer tendered full payment for the unshipped

merchandise in the form of cash, check or money order, a return

of the amount tendered in the form of cash, check or money order;

(2) Where there is a credit sale:

(i) And the seller is a creditor, a copy of a credit memorandum

or the like or an account statement reflecting the removal or

absence of any remaining charge incurred as a result of the sale

from the buyer's account;

(ii) And a third party is the creditor, a copy of an appropriate

credit memorandum or the like to the third party creditor which

will remove the charge from the buyer's account or a statement

from the seller acknowledging the cancellation of the order and

representing that he has not taken any action regarding the order

which will result in a charge to the buyer's account with the

third party;

(iii) And the buyer tendered partial payment for the unshipped

merchandise in the form of cash, check or money order, a return

of the amount tendered in the form of cash, check or money order.

(d) "Prompt refund" shall mean:

(1) Where a refund is made pursuant to paragraph (c)(1) or

(2)(iii) of this section a refund sent to the buyer by first

class mail within seven (7) working days of the date on which the

buyer's right to refund vests under the provisions of this part;

(2) Where the refund is made pursuant to paragraph (c)(2) (i) or

(ii) of this section, a refund sent to the buyer by first class

mail within one (1) billing cycle from the date on which the

buyer's right to refund vests under the provisions of this part.

(e) The "time of solicitation" of an order shall mean that time

when the seller has:

(1) Mailed or otherwise disseminated the solicitation to a

prospective purchaser,

(2) Made arrangements for an advertisement containing the

solicitation to appear in a newspaper, magazine or the like or on

radio or television which cannot be changed or cancelled without

incurring substantial expense, or

(3) Made arrangements for the printing of a catalog, brochure or

the like which cannot be changed without incurring substantial

expense, in which the solicitation in question forms an

insubstantial part.