Fritz: All Fritz/All Fritz.zip/All Fritz/FILES/LEGAEGAL/LEGAL3.LZH/LHARC3.EXE/MAILORD.STA

Text File | 1993-01-06 | 19KB | 382 lines

/* 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.