Letters Sent to 72 E-tailers to Help them Better Comply with Commission Requirements
The Federal Trade Commission's Division of Enforcement announced today that it recently conducted a surf of 110 Internet retailers offering top-selling holiday items. The purpose of the "HolidaySmarts.com" surf was to find out whether e-tailers were making "quick-ship" claims and certain other disclosures for popular holiday items. As a result of the surf, FTC staff sent letters to 72 e-tailers stating, "[A]s we enter the holiday shopping season, we want to be sure you are aware of and comply with applicable federal regulations..."
In announcing the results of the surf, Howard Beales, FTC's Director of the Bureau of Consumer Protection, said, "Some analysts believe that 2001 online holiday shopping sales will exceed last year's holiday e-commerce season. As consumers turn to the Internet for their holiday purchases - from electronic devices, jewelry, clothing to computers - we want to ensure that they get what they expect."
The FTC staff found that 52 of the 110 sites made "quick-ship" claims. Those sites assured consumers that in-stock items usually ship within 24 to 48 hours after an order is placed - a concern for consumers trying to complete their holiday shopping on time. Online shipment claims are governed by the Mail Order Rule, which requires merchants to ship orders to buyers within the time stated, or, if no time is stated, within 30 days. If unable to ship within the applicable time, the merchant must notify the customer of the delay within the original shipment time and provide a revised shipping date. Sites that promise to ship within 48 hours but find they can't must notify their customers within that period and give them the option to cancel.
During the 1999 holiday season, many Internet sellers claimed they could ship extremely quickly, from "overnight" to 48 or 72 hours. Unfortunately, some were unable to meet their (shipment claims, and the FTC brought civil penalty actions against seven well-known e-tailers for allegedly violating the Mail Order Rule. The companies paid more than $1.5 million in total penalties. Staff found fewer problems during the 2000 holiday season.
This year's surf also found that 52 of the sites selling warranted products didn't provide adequate information about the warranties. The Warranty Rule requires that written warranties on consumer products costing more than $15 be made available to consumers before they buy. To comply with the Warranty Rule, an online seller must include on its Web site either the full text of all written warranties or a general statement that they can be obtained free upon written request and an address where the warranty can be acquired. The warranty information must be placed near the product description, or be located clearly and conspicuously in a separate information section on the website. It is not sufficient for sites to summarize simply the terms of a manufacturer's warranty.
Sixteen sites were sent letters advising them of their obligations to tell consumers if their gemstone jewelry may have been treated or enhanced and require special care to retain its appearance, as required by the Jewelry Guides. Finally, five sites selling apparel were advised to make FTC-required country-of-origin disclosures.
The FTC's Office of Consumer and Business Education has two new consumer alerts regarding holiday shopping. "Holiday Shopping Tips to Help You Shop Wisely and Conveniently" offers basic shopping tips and advice for shopping in stores, by phone, mail or online. "Problems With Holiday Purchases?" offers suggestion about what to do if your holiday purchases didn't work out exactly right. Also, the FTC has a new "Holiday Shopping Tips" bookmark and an animated holiday shopping banner ad. Each of these publications and additional information about safe shopping is available free from the Commission's Consumer Response Center and online at www.ftc.gov/bcp/consumer.shtm. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at www.ftc.gov. The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.
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