9723075
B263006

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS:
Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle

In the Matter of

TIGER DIRECT, INC., a corporation.

DOCKET NO. C-3903

DECISION AND ORDER

The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint that the Boston Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and

The respondent, its attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true and waivers and other provisions as required by the Commission's Rules; and

The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, and having duly considered the comments received from interested persons pursuant to Section 2.34 of its Rules, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Tiger Direct, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Florida with its office or principal place of business located at 8700 West Flagler Street, 4th Floor, Miami, Florida 33174.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER

DEFINITIONS

For purposes of this order, the following definitions shall apply:

1. The definitions of terms contained in Section 101 of the Magnuson-Moss Warranty Act, 15 U.S.C. 2301, and in Rules 701 and 702, 16 C.F.R. Parts 701 ("the Disclosure Rule") and 702 ("the Pre-Sale Availability Rule"), promulgated thereunder, shall apply to the terms used in this order.

2. Unless otherwise specified, "respondent" shall mean Tiger Direct, Inc., a corporation, its successors, assigns, officers, agents, representatives, and employees.

3. "Commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. 44.

4. "On-Site Service" shall mean providing the services of a qualified technician at the location of a product sold or supplied by respondent to remedy a problem with the product.

5. "Clearly and prominently" shall mean as follows:

A. In an advertisement communicated through electronic medium (such as television, radio, and interactive media such as the Internet and online services), the disclosure shall be presented simultaneously in both the audio and video portions of the advertisement. Provided, however, that in any advertisement presented solely through video or audio means, the disclosure may be made through the same means in which the ad is presented. The audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. The video disclosure shall be of a size and shade, and shall appear on the screen for a duration, sufficient for an ordinary consumer to read and comprehend it. In addition to the foregoing, in interactive media the disclosure shall also be unavoidable and shall be presented prior to the consumer incurring any financial obligation.
 
B. In a print advertisement, promotional material, or instruction manual, the disclosure shall be in a type size and location sufficiently noticeable for an ordinary consumer to read and comprehend it, in print that contrasts with the background against which it appears. In multipage documents, the disclosure shall appear on the cover or first page.
 
C. On a product label, the disclosure shall be in a type size and location on the principal display panel sufficiently noticeable for an ordinary consumer to read and comprehend it, in print that contrasts with the background against which it appears.

The disclosure shall be in understandable language and syntax. Nothing contrary to, inconsistent with, or in mitigation of the disclosure shall be used in any advertisement or on any label.

6. "Reasonable period of time" shall mean that period of time specified in respondent's advertisements, promotional materials or solicitations if such period is clearly and prominently disclosed in the advertisement, promotional material or other solicitation; or if no period of time is clearly and conspicuously disclosed in the advertisement, promotional material or other solicitation, a period no longer than thirty (30) days following the date the respondent first receives notice from the consumer of a problem with a product.

I.

IT IS ORDERED that respondent, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, promotion, sale, offering for sale or distribution of any consumer product, shall not represent, in any manner, expressly or by implication, that it provides On-Site Service unless respondent discloses, clearly and prominently and in close proximity to the representation, all limitations and conditions that apply to obtaining On-Site Service.

II.

IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, promotion, sale, offering for sale or distribution of any consumer product for which the respondent offers a written warranty, shall within a reasonable period of time after receiving notice from a consumer of a problem, fulfill its obligations under the warranty to the consumer.

III.

IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, promotion, sale, offering for sale or distribution of any consumer product for which the respondent offers a written warranty, do forthwith cease and desist from:

A. Failing to make the text of any written warranty on a consumer product readily available for examination by prospective buyers prior to sale through utilization of one or more means specified in Section 702.3(c) of the Pre-Sale Availability Rule, 16 C.F.R.  702.3(c);
 
B. Failing to disclose, as provided in Section 701.3(a)(3) of the Disclosure Rule, 16 C.F.R. 701.3(a)(3), a statement of what the warrantor will not pay for or provide, where necessary for clarification;
 
C. Failing to disclose, as provided in Section 701.3(a)(5) of the Disclosure Rule, 16 C.F.R. 701.3(a)(5), a step-by-step explanation of the procedure the consumer should follow in order to obtain performance of any warranty obligation, including the persons or class of persons authorized to perform warranty obligations;
 
D. Excluding liability for any incidental or consequential damages arising from any consumer injury without clearly and conspicuously disclosing, as provided in Section 701.3(a)(8) of the Disclosure Rule, 16 C.F.R. 701.3(a)(8), that some states do not allow for such exclusion;
 
E. Failing to disclose, as provided in Section 701.3(a)(9) of the Disclosure Rule, 16 C.F.R. 701.3(a)(9), that certain states may give the consumer legal rights in addition to those provided by the warranty;
 
F. Failing to designate, as provided in Section 103 of the Warranty Act, 15 U.S.C. 2303, any written warranty that it offers for products costing more than $10 as either "full" or "limited;" and
 
G. Disclaiming any implied warranty, except as permitted by Section 108 of the Warranty Act, 15 U.S.C. 2308.

IV.

IT IS FURTHER ORDERED that respondent shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondent shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities.

V.

IT IS FURTHER ORDERED that respondent shall provide written instructions to all current and future managers, employees, agents, and representatives having any sales, advertising, customer service, or policy responsibility on behalf of respondent as to respondent's specific obligations and duties under this order and under the Magnuson-Moss Warranty Act (15 U.S.C. 2301, et seq.), including, but not limited to, Sections 103 and 108 (15 U.S.C. 2303 and 2308), thereof, and Rules 701 and 702, 16 C.F.R. Parts 701 ("the Disclosure Rule") and 702 ("the Pre-Sale Availability Rule"), promulgated thereunder. Respondent shall provide these instructions to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities.

VI.

IT IS FURTHER ORDERED that respondent shall, for a period of ten (10) years from the date of service of the order, maintain and upon request make available to the Federal Trade Commission for inspection and copying (i) copies of all written instructions provided by respondent to its managers, employees, agents, and representatives having any sales, advertising, customer service, or policy responsibility on behalf of respondent pursuant to Part VI., above; (ii) all warranties on consumer products costing more than $15 for which the respondent is the warrantor; and (iii) exemplars of all advertising by the respondent.

VII.

IT IS FURTHER ORDERED that respondent shall notify the Commission at least thirty (30) days prior to any change in the corporation that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondent learns less than thirty (30) days prior to the date such action is to take place, respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

VIII.

IT IS FURTHER ORDERED that respondent shall, within sixty (60) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order.

IX.

This order will terminate on November 4, 2019, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:

A. Any Part in this order that terminates in less than twenty (20) years;
 
B. This order's application to any respondent that is not named as a defendant in such complaint; and
 
C. This order if such complaint is filed after the order has terminated pursuant to this Part.

Provided further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

By the Commission.

Donald S. Clark
Secretary

SEAL:

ISSUED: November 4, 1999