As part of its rulemaking process to amend a trade regulation rule, the FTC issued a report on its October 2011 proposed amendments to the Mail or Telephone Order Merchandise Rule ("the Rule"). The report explains the FTC's four proposed amendments to the Rule, analyzes the comments received by the FTC after publishing the proposed amendments, and recommends that the Commission vote to approve the October 2011 proposed changes to the Rule. The FTC's four proposed changes from October 2011 serve to clarify the scope of the Rule and refine sellers' obligations in certain situations. First, the proposed changes would clarify that the Rule applies to all Internet orders, not simply to Internet orders placed through the telephone—i.e., via dial-up Internet. Based on this change, the FTC proposes changing the name of the rule to the "Mail, Internet, or Telephone Order Merchandise Rule." Second, the proposed amendments would permit sellers to provide refunds and refund notices by any means at least as fast and reliable as first-class mail. Prior iterations of the Rule required refunds and notices of refunds to be furnished by first-class mail. Third, the amended Rule would create specific requirements for sellers when buyers use methods of payment other than by cash, check, money order, or credit. Under the changes, the Rule would require sellers to make prompt refunds for other payment methods—known as "non-enumerated payment methods"—by either reversing the payments or sending cash, check, or money order to the buyer within seven working days. Finally, as with the third change listed above, the FTC recommends requiring sellers to process third-party credit card refunds within seven working days of a buyer's right to a refund vesting. The FTC proposed this final change to bring the requirements for refunding third-party credit card payments in line with the proposed change for refunding non-enumerated payment methods.
TIP: We expect these changes to the Mail or Telephone Order Merchandise Rule to be accepted by the Commission and to take effect within the next 6-12 months.