FTC Surf of 51 Internet Retailers Designed to Strengthen Consumer Confidence in Online Shopping

Letters Sent to 37 E-tailers to Help Them Better Comply with Commission Requirements

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The Federal Trade Commission’s Division of Enforcement today announced that it recently conducted a surf of 51 Internet retailers selling holiday items to review “quick ship” claims, rebate offers, and other disclosures for certain popular items. As a result of the surf, the FTC staff sent letters to 37 e-tailers stating, “We want to make certain that you know that online sales are governed by many of the FTC-enforced statutes and regulations that apply to other forms of marketing and advertising. These statutes, rules, and guidelines protect businesses and consumers, and help maintain the integrity of the Internet as a solid retailing medium.”

In announcing the surf results, Howard Beales, Director of the FTC’s Bureau of Consumer Protection, said, “As more consumers shop for their holiday purchases online, we want to be certain they get what they expect, when they expect it. Online shoppers should have as much knowledge of the product, warranties, and rebates as they would if they shopped in a brick and mortar store.”

The FTC staff found that 44 sites made “quick ship” claims. Examples of these claims include statements that in-stock items usually ship within 24 to 48 hours after an order is placed, or that orders received before a certain time of day would be shipped that day – an important message for consumers trying to ensure that their orders arrive on time. Online shipping claims are governed by the FTC’s Mail or Telephone Order Rule, which requires that sellers ship orders to buyers within the time stated in the ad, or, if no time is stated, within 30 days after receiving the order. The FTC staff letters to e-tailers remind merchants that if they are unable to ship, for example, within a promised “48 hour” period, they must notify their customers within that period and give them the option to cancel their orders.

During the 1999 holiday season, many Internet sellers claimed they could ship extremely quickly, from “overnight” to 48 hours and 72 hours. Unfortunately, some were unable to ship when they said they would, and the FTC brought civil penalty actions against seven well-known
e-tailers for allegedly violating the Mail or Telephone Order Rule. The companies paid more than $1.5 million in total penalties. The FTC staff found fewer problems during the 2000, 2001, and 2002 holiday seasons.

This year’s surf found that 14 of the 16 sites selling warranted products failed to provide adequate information about the warranties. The FTC’s Pre-Sale Availability Rule requires that written warranties on consumer products costing more than $15 be made available to consumers before they buy, and specifies what retailers, including mail order and catalog sellers, must do to accomplish this. The FTC staff sent letters to these sites advising them to include on their websites either the full text of written warranties, or a general statement that warranties could be obtained free upon request. The letters also advised how clearly and properly labeled hyperlinks can be used to provide warranty information.

The FTC staff also advised two sites selling apparel to make FTC-required country-of-origin disclosures. The FTC’s Rules and Regulations Under the Textile Fiber Products Identification Act (Textile Act) require that most textile products sold to consumers through print or online catalogs have an origin disclosure in the product information as to whether each item was “Made in USA,” “imported,” or both.

Finally, the staff also sent 11 sites offering rebates a letter advising them that to ensure that their advertising is not misleading, they should disclose in a clear and prominent manner: (1) the type of rebate offered (in-store or mail-in); (2) the material terms of the rebate offer; and (3) the total price consumers must pay at the time of purchase to receive the rebate. The letters also advised the sites to send their rebates to consumers within the time promised or within a reasonable time if no time-frame is mentioned.

With the holiday season fast approaching, the Commission encourages consumers to be wise and savvy shoppers. Whether looking for toys, trinkets, or a travel deal, holiday shopping on the Internet can be fun, easy and practical.

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 https://www.ftccomplaintassistant.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

MEDIA CONTACT:

Brenda Mack,
Office of Public Affairs
202-326-2182


STAFF CONTACT:

Robert Frisby or Janice Frankle
Bureau of Consumer Protection
202-326-2098 or 202-326-3022