[Federal Register Volume 60, Number 203 (Friday, October 20, 1995)]
[Rules and Regulations]
[Pages 54180-54187]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25573]



=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

16 CFR Part 429


Rule Concerning Cooling-Off Period for Sales Made at Homes or at 
Certain Other Locations

AGENCY: Federal Trade Commission.

ACTION: Final non-substantive amendments to the rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Trade Commission (``the Commission'') announces 
that it has concluded a review of its Trade Regulation Rule on Cooling-
Off Period for Door-to-Door Sales (``Cooling-Off Rule'' or ``Rule''), 
and determined there is a continuing need for the Rule. This review was 
conducted as part of the Commission's ongoing program to review all of 
its rules and guides periodically. The Commission has also determined 
to issue non-substantive amendments to several Rule provisions. 
Specifically, the Commission is amending the Rule by renaming it so 
that it more clearly identifies the kinds of sales it covers and by 
inserting two notes, formerly at the end of the Rule, into the Rule 
itself. Moreover, the Commission is amending the Rule by adding a new 
section containing two exemptions to the Rule that the Commission 
granted, in November 1988, to certain sellers of arts and crafts and of 
automobiles. The Commission is also expanding the exemption for 
automobiles to include vans, trucks and other motor vehicles sold at 
temporary places of business by dealers having permanent places of 
business. Further, the Commission is amending the Rule by adding a 
parenthetical statement to the Rule's definition of the term ``Door-to-
Door Sale.'' This new statement gives examples of kinds of sales 
locations covered by the Rule. The Commission is also amending the 
Rule's definition of ``Business Day'' to reflect changes in federal 
holidays. Finally, the Commission is amending the Rule to make the 
typeface used in the sample ``Notice of Cancellation'' more readable 
and to substitute the gender neutral words ``the buyer'' or ``the 
buyer's'' for the pronouns ``he,'' ``his,'' and ``him.''

EFFECTIVE DATE: December 19, 1995.

FOR FURTHER INFORMATION CONTACT: Lemuel W. Dowdy, Attorney, (202) 326-
2981, Division of Enforcement, Bureau of Consumer Protection, Federal 
Trade Commission, Washington, D.C. 20580.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Cooling-Off Rule was promulgated by the Commission on October 
26, 1972,1 and subsequently amended on November 1, 1973,2 
November 19, 1973,3, and November 10, 1988.4 The Rule, as 
amended, declares it to be an unfair and deceptive act or practice for 
any seller in a door-to-door sale of consumer goods or services, with a 
purchase price of $25 or more, to fail to furnish the buyer with 
certain oral and written disclosures regarding the right of the buyer 
to cancel the contract within three business days from the date of the 
sales transaction. The Rule also requires a seller, within 10 business 
days after receipt of a valid cancellation notice from a buyer, to 
honor the buyer's cancellation by refunding all payments made under the 
contract, by returning any traded-in property, by cancelling and 
returning any security interests created in the transaction, and by 
notifying the buyer whether the seller intends to repossess or to 
abandon any shipped or delivered goods.

    \1\ 37 FR 22933 (Oct. 26, 1972). The effective date of the Rule 
was later set as June 7, 1974. 38 FR 33766 (Dec. 7, 1973).
    \2\ 38 FR 30105 (Nov. 1, 1973). This amendment revised the 
fourth paragraph of the sample ``Notice of Cancellation'' set forth 
in section 429.1(b) of the Rule, 16 CFR 429.1(b), to make clearer 
what are the buyer's responsibilities for goods delivered under a 
contract the buyer has cancelled.
    \3\ 38 FR 31828 (Nov. 19, 1973). This amendment corrected a 
misstatement in the November 1, 1973, amendment concerning the 
amendment's effective date.
    \4\ 53 FR 45455 (Nov. 10, 1988). This amendment allowed 
alternative wording in certain parts of the Rule's required ``Notice 
of Cancellation.'' At the same time, the Federal Register notice 
announced the two exemptions the Commission was granting to sellers 
of arts and crafts and of automobiles sold at temporary places of 
business.
---------------------------------------------------------------------------

    The Rule requires the seller in a door-to-door sale to furnish the 
buyer with a completed receipt, or a copy of the sales contract, 
containing a summary notice informing the buyer of the right to cancel 
the transaction. The Rule also requires a seller to furnish the buyer 
with a completed cancellation form, in duplicate, captioned either 
``Notice of Right to Cancel'' or ``Notice of Cancellation,'' one copy 
of which can be returned by the buyer to the seller to effect 
cancellation.
    In issuing the Rule, the Commission adopted a broad definition of 
``Door-to-Door Sale'' to include any sale ``made at a place other than 
the place of business of the seller.'' In doing this, the Commission 
indicated that the Rule covers more than just at-home sales.5 The 
Commission has on several occasions reiterated this position. For 
example, in a 1978 Advisory Opinion, the Commission stated:

    \5\ 37 FR 22947 (Oct. 26, 1972).
---------------------------------------------------------------------------

    In the opinion of the Commission, firms which temporarily or 
sporadically rent hotel rooms, motel rooms, public halls or other 
facilities and invite members of the general public to attend a 
presentation therein, the purpose of which is to sell them courses of 
training, are subject to the provisions of the Trade Regulation Rule 
concerning a Cooling-Off Period for Door-To-Door Sales (16 CFR 
429).6

    \6\ Advisory Opinion, dated July 14, 1978, in FTC File No. D.H. 
70016.
---------------------------------------------------------------------------

    Moreover, pursuant to Section 18(g)(2) of the FTC Act,7 the 
Commission on November 10, 1988, granted exemptions to the Rule to 
certain sellers of automobiles and of arts and crafts at temporary 
business locations.8 In granting these exemptions, the Commission 
noted that, when it had issued the Rule in 1972, it was concerned not 
only with sales made at consumers' homes, but also with sales by 
``itinerant salesmen who sell at restaurants, shops and other places.'' 
9

    \7\ 15 U.S.C. 57a(g)(2). This section of the FTC Act provides 
that the Commission may, on its own or on the basis of a petition, 
exempt persons from a rule's application if their inclusion is not 
necessary to prevent a practice to which the rule relates. 
Exemptions are considered through notice and comment rulemaking.
    \8\ 53 FR 45455 (Nov. 10, 1988). The first exemption was for 
sellers of automobiles at auctions, tent sales and other temporary 
places of business, provided the seller has a permanent place of 
business elsewhere. The second exemption was for sellers of arts and 
crafts at fairs and other, similar locations. The Commission, when 
granting these exemptions, determined that, at least with regard to 
these transactions, the record indicated an absence of the kinds of 
problems (such as the high pressure sales tactics, the nuisance 
aspects, the equivalent of deceptive door-openers, or the 
misrepresentations as to the quality, price or characteristics of 
the product or services offered for sale) that are often generally 
associated with sales made in the home.
    \9\ Id. at 45458.
---------------------------------------------------------------------------

II. Background

    In 1983, the Commission began a review of the Cooling-Off Rule 
pursuant to the Regulatory Flexibility Act, 5 U.S.C. 603, and published 
a notice in the Federal Register soliciting comment on whether the Rule 
had a significant impact on small businesses and, if so, whether the 
Rule needed amendment to minimize its impact on small 

[[Page 54181]]
businesses.10 After reviewing the comments received, the 
Commission determined that there was a continuing need for the Rule and 
that there was no basis to conclude that the Rule had a significant 
impact on small businesses.11 At the same time, the Commission 
proposed and solicited comments on two limited exemptions and on non-
substantive amendments permitting alternative methods of compliance 
with the Rule's notice requirements.12 The Commission adopted 
these proposals on November 10, 1988.13

    \10\ 48 FR 9032-34 (Mar. 3, 1983).
    \11\ 52 FR 29539 (Aug. 10, 1987).
    \12\ Id.
    \13\ 53 FR 45455 (Nov. 10, 1988).
---------------------------------------------------------------------------

    In 1992 the Commission determined, as part of its oversight 
responsibilities, to review periodically all of its rules and guides. 
The information obtained from such reviews assists the Commission in 
identifying those rules and guides that warrant modification or 
rescission.
    On April 15, 1994, pursuant to the Commission's regulatory review 
project, the Commission published in the Federal Register a notice 
requesting public comments concerning the Rule's costs and benefits, 
its overall regulatory and economic impact, and the current need for 
the Rule.14 The Federal Register notice specifically asked for 
comment on whether the Rule should continue to cover sales made at 
temporary and short-term places of business, such as hotel rooms, 
convention centers, fairgrounds and restaurants. Moreover, the 
Commission specifically requested comments on whether the two existing 
exemptions to the Rule for sellers of automobiles and of arts and 
crafts at temporary places of business should be continued or expanded. 
Specifically, the Commission asked if the exemption covering arts and 
crafts sold at fairs and other, similar places should be expanded to 
include garden equipment, fencing materials and other non-crafts. The 
Commission also asked if the current exemption for automobiles sold at 
auctions, tent sales and other temporary places of business (provided 
the seller has a permanent place of business) should be expanded to 
include pickup trucks, vans, trucks and campers. Last, the Commission 
sought comment on its proposal to eliminate the outdated list of 
federal holidays given in the Rule's definition of ``Business Day'' and 
to replace it with a general statement that federal holidays are 
excluded from the Rule's three-day cancellation period.

    \14\ 59 FR 18008 (Apr. 15, 1994).
---------------------------------------------------------------------------

III. Summary and Analysis of Comments

    The April 15, 1994, Federal Register notice gave all interested 
persons 30 days to submit, in writing, their data, views and arguments 
concerning the existing Rule and any proposed amendments or exemptions 
to it. The Commission received comments from ten organizations, 
consisting of two door-to-door sellers, three trade associations 
representing door-to-door sellers, four associations representing 
consumer interests, and the Office of the Attorney General of the State 
of Iowa.15

    \15\ The list below includes the commenter's name, along with an 
acronym in parenthesis, the public record document number assigned 
to the comment by the Commission's Secretary, and a general 
description of the commenter. For the remainder of this Notice, each 
comment will be cited by the acronym and document number.
    #001. Craftmatic Organization, Inc. (``CO''), a door-to-door 
seller of mattresses.
    #002. American Association of Retired Persons (``AARP''), a 
representative of retired people throughout the country.
    #003. International Hearing Society (``IHS''), a representative 
of hearing aid specialists located throughout the country and 
abroad.
    #004. National Automobile Dealers Association (``NADA''), a 
representative of automobile and truck retailers located throughout 
the country.
    #005. UAW-GM Legal Services Plan (``UAW-GM''), a representative 
of automobile workers and retirees through 70 law offices located 
throughout the country.
    #006. Direct Selling Association (``DSA''), a representative of 
more than 150 companies that sell products by personal presentation, 
primarily at buyers' homes.
    #007. State of Iowa Department of Justice (``IA DOJ''), the 
Consumer Protection Division of the Iowa Attorney General's office.
    #008. Legal Aid Society of Dayton, Inc. (``LASOD''), a 
representative of consumer interests in Dayton, Ohio.
    #009. National Association of Consumer Agency Administrators 
(``NACAA''), a representative of government consumer protection 
agencies at the municipal, county and state levels, with associate 
members in the consumer affairs departments of federal agencies.
    #010. World Media International, Inc. (``WMI''), a door-to-door 
seller of various products.
---------------------------------------------------------------------------

(A) Responses to the Federal Register Notice's Regulatory Review 
Questions

1. Summary
    The first six questions posed by the Federal Register notice were 
general ones, such as whether the Commission should retain the Rule and 
what are the Rule's costs and benefits. All ten commenters responded to 
the first two questions concerning retention and/or modification of the 
Rule by urging the Commission to keep the Rule. All commenters, 
however, either proposed or endorsed one or more of the amendments to 
the Rule described in subsections B, C and D infra. Only a few comments 
specifically addressed any of the four remaining questions concerning 
the costs and benefits of the Rule, its possible conflict with other 
laws, and recent changes in relevant technology or economic conditions.
    DSA stated that the Rule benefits both consumers and sellers, that 
it imposes no costs on consumers and only minimal printing costs on 
sellers, and that it does not conflict with other federal or state and 
local laws because the Rule sets a minimum national standard, leaving 
the states free to enact greater consumer protections.16 IA DOJ 
stated that the Rule benefits both consumers and sellers and imposes, 
at most, only negligible costs on consumers. It also stated the Rule 
imposes only negligible burdens on sellers, and that, although the Rule 
does overlap state laws, it does not thereby create any problems 
because it sets only minimum standards.17 NACAA stated that the 
Rule imposes no significant costs or burdens on consumers and is not 
overly burdensome on businesses. NACAA also stated that, although the 
Rule overlaps many state cooling-off statutes, there is no conflict 
because the Rule rightly sets only a minimum standard and the states 
should be free to require greater buyers' cancellation rights if they 
choose.18

    \16\ DSA, #006, pp. 2-4.
    \17\ IA DOJ, #007, pp. 2-4.
    \18\ NACAA, #009, pp. 2-4.
---------------------------------------------------------------------------

2. Analysis
    The comments indicate that the Rule provides substantial benefits 
to consumers without imposing unreasonable costs on sellers or others. 
Although most commenters proposed specific amendments, they were 
unanimous in stating that the Commission should retain the Rule.

(B) Responses to the Federal Register Notice's Questions Concerning 
Sales at Places Other Than the Regular Place of Business of the Seller

1. Summary
    The Federal Register notice contained four questions concerning the 
Rule's coverage of sales made at temporary places of business. The 
first asked whether sales at temporary business locations involve the 
kinds of problems associated generally with door-to-door sales. 
Comments from buyers' representatives stated that one or more of the 
problems described in the Federal Register notice as recurrent with in-
home sales (e.g., the prevalence of high pressure sales and failure to 
disclose the purpose of the contact) are frequently also associated 
with sales at temporary business locations. Several of these commenters 
noted that sellers using 

[[Page 54182]]
temporary business locations often pressure consumers into making 
immediate purchase decisions.\19\ IA DOJ cited examples where direct 
sellers lure consumers to temporary locations with promises of ``free'' 
items or services only to surprise consumers with high-pressure sales 
pitches.\20\

    \19\ IA DOJ, #007, p. 5; LASOD, #008, p. 2; NACAA, #009, p. 5.
    \20\ IA DOJ, #007, p. 7.
---------------------------------------------------------------------------

    IA DOJ and NACAA observed that consumer protection agencies 
frequently encounter direct sellers that use hotel conference rooms and 
banquet halls to sell expensive items of dubious value, such as books 
or tapes describing get-rich-quick schemes, multi-level marketing 
plans, business opportunities and overpriced rugs.\21\ These sellers, 
according to these commenters, often draw consumers to the sites by 
advertising self-help seminars or other non-sales activities, and then 
use misrepresentations and high pressure tactics to sell their products 
or services.\22\ IA DOJ also stated that it is a nuisance for consumers 
to be drawn out of their homes by promises of free merchandise or 
information, only to be faced with a high-pressure sales pitch touting 
goods or services that ultimately prove to be of little value.\23\

    \21\ IA DOJ, #007, p. 5; NACAA, #009, p. 5.
    \22\ Id.
    \23\ IA DOJ, #007, p. 6.
---------------------------------------------------------------------------

    Another question asked whether certain types of temporary business 
locations (e.g., fairgrounds, convention centers, restaurants or 
dormitories) are more or less likely to be associated with the problems 
found in door-to-door selling. IA DOJ stated that these problems occur 
just as frequently at temporary businesses located in retail settings 
as they do at other temporary business locations.\24\ The commenter 
said, however, that problems found in door-to-door selling are less 
likely to occur when selling takes place at temporary sites set up at 
events where the primary focus is not on selling products to 
consumers.\25\ NACAA expressed concern that, when direct sellers use 
convention centers, rented halls and college dormitory lounges, some 
consumers may believe that the seller has been approved or screened by 
the owners or operators of the facility.\26\

    \24\ Id.
    \25\ Id.
    \26\ NACAA, #009, p. 6.
---------------------------------------------------------------------------

    With respect to sales at auctions, IA DOJ and NACAA stated that 
there is a high potential for deception in such settings because 
consumers have little time to evaluate their purchases.\27\ NACAA 
commented that ``shills'' are sometimes used at rug auctions to drive 
up bids to inflated prices.\28\ NACAA commented further that consumers 
purchasing automobiles at auctions sometimes do not understand that 
they may not be protected by warranties applicable in sales made at 
dealers' lots.\29\ On the other hand, IA DOJ believed that the surprise 
sale solicitations that are often associated with hotel seminars are 
not common at auction sales and that consumers who attend auctions are 
generally not pressured to buy.\30\

    \27\ IA DOJ, #007, p. 6; NACAA, #009, p. 5.
    \28\ NACAA, #009, p. 5.
    \29\ Id. at 7.
    \30\ IA DOJ, #007, pp. 6-7.
---------------------------------------------------------------------------

    IA DOJ stated that problems with sales at temporary business 
locations are substantially mitigated if the seller has a permanent 
place of business in the consumer's area.\31\ If, however, there is no 
permanent place of business near the consumer, IA DOJ believed that 
consumers derive no benefit from the fact that the seller has a 
permanent place of business elsewhere.\32\

    \31\ Id.
    \32\ Id.
---------------------------------------------------------------------------

    The third question asked whether the Rule should continue to apply 
to sales solicited at temporary business locations. The five commenters 
that responded to this question stated that the Rule should continue to 
apply to such sales.\33\ DSA stated that the Commission should not 
reduce the level of protection consumers now enjoy under the Rule.\34\ 
IA DOJ offered the following reasons for applying the Rule to sales at 
temporary business locations:

    \33\ AARP, #002, p. 4; DSA, #006, p. 3; IA DOJ, #007, p. 7; 
LASOD, #008, p. 2; NACAA, #009, p. 4.
    \34\ DSA, #006, p. 4.
---------------------------------------------------------------------------

    In our experience, door-to-door sales persons rarely offer to 
give the consumer a day to think about a purchase and return the 
next day to consummate the sale. They pressure the consumer to buy 
the day they stop at the consumer's home. Similarly, sellers from 
temporary business locations are often in the consumers' community 
for only a day or two. These sellers often represent that consumers 
must buy during the seller's presence in the community. In addition, 
such sellers often lure consumers to the temporary site with 
promises of free merchandise or services, only to surprise consumers 
with high-pressure sales pitches for high-priced merchandise. 
Consumers who purchase from permanent business locations also can 
visit the business in person to request refunds and file complaints. 
In addition, sellers with permanent business locations in a 
community have greater incentive to deal fairly with their 
customers. These significant benefits are not available to consumers 
who purchase from door to door sellers or from those who sell from 
temporary business locations.\35\

    \35\ IA DOJ, #007, p. 2.
---------------------------------------------------------------------------

    The fourth question concerning sales at temporary business 
locations sought comments on whether the current exemption for arts and 
crafts sold at fairs and similar places should be expanded to include 
other products, such as garden equipment, fencing materials and other 
non-crafts. The two commenters responding both opposed expanding this 
exemption. The IA DOJ stated that consumers attending these fairs, in 
many instances, lack sufficient time to consider making purchases.\36\ 
NACAA noted that expanding this exemption would allow unscrupulous 
marketers to avoid Rule coverage.\37\

    \36\ Id. at 8.
    \37\ NACAA, #009. p. 6.
---------------------------------------------------------------------------

    The Federal Register notice also sought information on whether the 
current exemption for automobiles sold at auctions, tent sales and 
other temporary places (provided the seller has a permanent place of 
business) should be expanded to include trucks, campers and vans. NADA 
stated that this exemption should be expanded because the reasoning the 
Commission used in exempting the sale of automobiles at temporary 
business locations would apply with equal force to sales of pickup 
trucks, vans, trucks and campers.\38\

    \38\ NADA, #004, p. 1. The Commission received a similar 
suggestion when it solicited comments before granting the automobile 
exemption. Because, however, the Commission had not specifically 
sought comment on exempting such other vehicles, the Commission 
concluded that adequate notice to the public had not been given at 
that time to justify the broader exemption.
---------------------------------------------------------------------------

    NACAA, on the other hand, opposed extending the exemption to 
trucks, vans and campers because it has strong reservations about the 
current exemption for sales of automobiles at temporary business 
locations.\39\ Specifically, NACAA believed that consumers purchasing 
motor vehicles at auctions sometimes do not understand that they may 
not be protected by warranties that would be applicable to sales made 
at dealers' lots. NACAA also believed that consumers may not perceive 
agreements they make at temporary locations as binding. For these 
reasons, NACAA opposed extending the exemption to include vehicles that 
may be even more expensive than cars.\40\

    \39\ NACAA, #009, p. 7.
    \40\ Id.
---------------------------------------------------------------------------

    In addition to opposing expanding the automobile exemption, NACAA 
proposed a modification to this exemption to ensure that 
``curbstoners'' are covered by the Rule.\41\ NACAA stated that 
``curbstoners'' (dealers who sell automobiles by posing as an 

[[Page 54183]]
individual selling a personal vehicle) often make sales by 
misrepresenting the mechanical condition of the car and by rolling back 
the odometer. Many ``curbstoners,'' according to NACAA, are included in 
the exemption because they have a permanent business location.

    \41\ Id.
---------------------------------------------------------------------------

2. Analysis
    The Commission has determined that the Rule should continue to 
apply to sales at temporary business locations. The Rule specifically 
excludes sales that take place at the seller's ``place of business,'' 
which is defined as the seller's ``main or permanent branch office or 
local address.'' \42\ The term ``local address,'' as it is used in the 
definition of ``place of business,'' means a permanent local address of 
the seller. Thus, a seller's temporary business location does not 
constitute a ``local address.'' Such temporary places of business 
include facilities rented on a temporary and short-term basis, such as 
hotel rooms, convention centers, fairgrounds and restaurants. In 
addition, sales occurring at other places that are not the seller's 
place of business, such as a buyer's workplace or dormitory lounge, are 
covered by the Rule.

    \42\ The Rule's definition of ``door-to-door sale'' excludes 
sales that are made at ``the place of business of the seller.'' 16 
CFR 429.1, note 1(a). The Rule defines ``place of business'' as 
``the main or permanent branch office or local address of the 
seller.'' 16 CFR 429.1, note 1(d).
---------------------------------------------------------------------------

    The Commission also has determined to retain the exemptions for 
sellers of arts and crafts and of automobiles sold at temporary places 
of business. In addition, the Commission has decided to expand the 
automobile exemption to cover all motor vehicles sold at a dealer's 
temporary place of business (provided the dealer has a permanent sales 
location). In the Commission's view, there is no compelling reason to 
distinguish cars from other kinds of motor vehicles sold under the same 
circumstances.
    The Commission has determined that modifying the exemption for 
automobiles to bring ``curbstoners'' under the Rule is not necessary. 
The problems with ``curbstoners'' that NACAA raises are not those that 
the Cooling-Off Rule was designed to correct. Other laws regulate such 
practices. Most ``curbstoners'' are covered by the Commission's Used 
Car Rule.\43\ If the seller displays a Buyers Guide required by the 
Used Car Rule, consumers are likely to infer that the seller is a used 
car dealer rather than a private individual selling a personal vehicle. 
``Curbstoners'' who fail to comply with the Used Car Rule are subject 
to an enforcement action by the Commission. If a state's consumer 
protection law authorizes enforcement of FTC Rules, that state's law 
enforcement agencies can also bring enforcement actions against 
``curbstoners'' for violating the Used Car Rule. Similarly, odometer 
tampering is prohibited by federal law.\44\ The U.S. Department of 
Justice enforces this law, and state Attorneys General can also bring 
actions under the federal odometer law against ``curbstoners'' that 
roll back odometers.\45\

    \43\ 16 CFR Part 455. The Used Car Rule requires dealers to post 
a Buyers Guide on each used car to disclose whether the vehicle is 
sold with a warranty or ``as is.'' The Buyers Guide also warns 
consumers not to rely on spoken promises and to seek independent 
inspections. Used car dealers must comply with the Used Car Rule if 
they sell more than five used vehicles within a twelve month period. 
The Commission assumes that most ``curbstoners,'' especially those 
who also sell at a permanent sales location, would sell more than 
five cars per year.
    \44\ 49 U.S.C.A. 32709-11 (1994).
    \45\ Id. at 32709(d).
---------------------------------------------------------------------------

    Lastly, the Commission has decided against expanding the arts and 
crafts exemption. The comments do not support adding more transactions 
to this exemption. Furthermore, expanding the exemption could create 
confusion as to what sales at fairs and similar places are covered by 
the Rule.

(C) Responses to the Federal Register Notice's Remaining Questions

1. Summary
    The Rule requires door-to-door sellers to offer buyers a cooling-
off period of three business days from the date of the transaction. The 
current Rule defines ``Business Day'' as:
    Any calendar day except Sunday or the following business holidays: 
New Year's Day, Washington's Birthday, Memorial Day, Independence Day, 
Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day, and Christmas 
Day.
    The Federal Register notice sought comment on whether this 
definition should be modified to refer to ``any federal holiday'' 
rather than listing the specific holidays. The amendment would enable 
the Rule automatically to take into account any changes in federal 
holidays. Since promulgation of the Rule, the federal George 
Washington's Birthday holiday has been replaced with the Presidents' 
Day holiday and a new federal holiday honoring the birthday of Martin 
Luther King, Jr., has been adopted. The Commission's proposed amendment 
would have corrected the existing Rule's out-of-date listing of 
holidays and avoided the need for further amendments if other changes 
in the federal holidays are ever made.
    Three commenters addressed the proposal to amend the Rule's 
definition of ``business day.'' IA DOJ supported the proposed 
amendment.\46\ NACAA opposed it, arguing that the Rule should 
specifically list the federal holidays so that consumers can readily 
identify them.\47\ CO stated that the proposal should be revised to 
take into account the fact that, under some state laws or local 
ordinances, Saturday is not considered a business day. To avoid 
confusion, CO suggested that the following sentence be added to the 
proposed amendment: ``This definition shall take precedence over state 
or local law or ordinance.'' \48\

    \46\ IA DOJ, #007, p. 2.
    \47\ NACAA, #009, p. 7.
    \48\ CO, #001, p. 11.
---------------------------------------------------------------------------

2. Analysis
    The Commission has decided to amend the Rule's definition of 
``business day'' by updating the list of federal holidays. This listing 
will allow both consumers and sellers to identify precisely those dates 
covered by the Rule's cancellation period. The Commission, however, has 
determined not to add to the definition of ``business day'' a sentence 
stating that the Rule's definition takes precedence over state or local 
law. The Rule does not preempt state laws or local regulations 
providing cancellation rights that are substantially the same or 
greater than that provided by the Rule.\49\

    \49\ See 16 CFR 429.1, note 2.
---------------------------------------------------------------------------

    Further, the Notice of Cancellation that consumers receive at the 
time they sign the contract states exactly what cancellation period 
applies to their transaction. This notice has a space where the seller 
is required to write in the specific time when the cancellation period 
ends: ``To cancel this transaction, mail * * * this cancellation notice 
* * * to __________ not later than midnight of (date) ________.'' Thus, 
sellers can factor in time periods and days excluded by state law in 
calculating when the cancellation period ends. The Rule in essence only 
provides a right to have a minimum of three business days to cancel, as 
business days are counted under the Rule.

(D) Proposals Raised by Commenters

1. Summary
    The commenters, in response to the Commission's request for 
suggestions on how the Rule might be modified, suggested a total of ten 
different amendments to the Rule. The five 

[[Page 54184]]
commenters representing sellers recommended that the Commission amend 
the Rule by: (1) Raising the $25 minimum; \50\ (2) allowing sellers 
more than 10 days to make refunds; \51\ (3) requiring sellers to give 
buyers just a written, not both an oral and a written, notice of 
cancellation rights; \52\ (4) exempting sales of hearing aids at 
temporary business locations; \53\ (5) allowing sellers to substitute 
``satisfaction'' or ``money back'' guarantees in place of the Rule's 
cooling-off period; \54\ and (6) allowing sellers and buyers to execute 
waivers of the Rule in instances in which the buyers want delivery 
prior to three business days after the transactions.\55\

    \50\ WMI, #010, p. 1.
    \51\ CO, #001, pp. 7-8; WMI, #010, pp. 1-2.
    \52\ CO, #001, p. 4-6.
    \53\ IHS, #003, pp. 2-4. IHS requested that sales of hearing 
aids at temporary business locations be exempted from the Rule. The 
exemption is justified, contended IHS, because (1) hearing aids are 
medical devices regulated by the United States Food and Drug 
Administration (``FDA''), (2) most states require hearing aid 
providers to be licensed, and (3) most hearing aid providers in this 
country offer 30-day trial rental options.
    \54\ DSA, #006, pp. 2-3.
    \55\ CO, #001, pp. 9-10.
---------------------------------------------------------------------------

    The five commenters representing buyers recommended amending the 
Rule to: (1) Allow buyers more than 3 business days to cancel covered 
sales contracts; \56\ (2) start the cooling-off period from the date of 
delivery of goods or services instead of the date of contract 57 
or prohibit delivery of goods or providing of services until after 
expiration of cooling-off period; 58 (3) defer starting the 
cooling-off period until the seller has complied with all the Rule's 
provisions; 59 and (4) expand the Rule's coverage to include all 
telephone and mail order consumer sales transactions or all consumer 
sales transactions, including those made at sellers' regular places of 
business.60

    \56\ AARP, #002, pp. 3-4; NACAA, #009, p. 3.
    \57\ NACAA, #009, p. 2.
    \58\ UAW-GM, #005, p. 1.
    \59\ UAW-GM, #005, p. 2; NACAA, #009, p. 3.
    \60\ IA DOJ, #007, pp. 2-4 (telephone solicitations); LASOD, 
#008, pp. 1-2 (telephone and mail order solicitations and possibly 
all sales solicitations); NACAA, #009, p. 3 (telephone, facsimile 
machine and computer modem solicitations). In addition, DSA, #006, 
p. 3, a representative of sellers, stated that it ``does not oppose 
reasonable extension of the Rule to telephone sales.''
---------------------------------------------------------------------------

2. Analysis
    The comment suggesting that the minimum dollar amount be raised to 
reflect the price inflation of goods and services since 1972 appears to 
be based on the premise that the $25 minimum was adopted because the 
Commission in 1972 thought low priced sales were not associated with 
the kinds of high pressure tactics the Rule was meant to prevent. In 
fact, however, this was not the Commission's reason for adopting the 
$25 minimum. The Commission's principal purpose in adopting the $25 
minimum was ``to exclude sales by milkmen, laundrymen and other route 
salesmen'' 61 (i.e., sales occurring between the same seller and 
buyer on an ongoing basis). The commenter did not offer evidence that 
other low priced items, sold door-to-door on a one-time basis, would 
not be associated with such high pressure sales tactics if they were 
exempted from the Rule. There is insufficient evidence justifying 
amendment of this provision.

    \61\ 37 FR 22935, 22945 (Oct. 26, 1972).
---------------------------------------------------------------------------

    Another comment urged that the Commission delete the Rule provision 
requiring sellers to give oral notice of the right to cancel. This 
comment asserted that the oral notice requirement could harm sellers 
because buyers might falsely allege that no oral notice was given in 
order to acquire a longer cancellation period. In addition, the comment 
contended that the oral notice requirement is an unnecessary 
duplication of the written notices.
    The notion that consumers can lengthen the cancellation period by 
denying that they received the oral notice is incorrect. The 
cancellation period only runs for three business days from the date of 
the transaction. Merely requiring a written disclosure could make it 
easier for those using high pressure sales pitches to keep buyers 
unaware of the three-day cancellation period. Accordingly, the 
Commission is retaining the requirement that sellers give both written 
and oral notice of the right to cancel.
    The requested exemption for hearing aids would be appropriate only 
if there were reliable and persuasive evidence showing that application 
of the Rule to such transactions is not necessary to prevent the 
practices prohibited by the Rule. Removing the protections of the 
Cooling-off Rule from sales of hearing aids at temporary business 
locations may adversely affect older consumers.62 Two of the 
eleven enforcement actions the Commission has brought alleging 
violations of the Rule concerned sales of hearing aids to elderly 
people. There is insufficient evidence to justify such an exemption. 
The Commission therefore at this time is not exempting sales of hearing 
aids at temporary business locations.

    \62\ IHS noted in its comment that older consumers make up the 
major percentage of hearing aid customers.
---------------------------------------------------------------------------

    When the Commission issued the Rule, it considered and rejected 
suggestions that sellers be allowed more than ten days to make the 
required refund 63 or that they be allowed to substitute 
``satisfaction guarantees'' for the Rule's right to cancel 64 or 
be allowed to get buyers to waive their right to a cancellation period 
in order to get fast delivery.65 The Commission's decision to 
require a ten-day period for making refunds took into account the 
possibility of the seller being injured by having made a refund while, 
unknown to the seller, the buyer stops payment on the check.66 The 
comments did not offer new evidence or arguments on these issues. 
Therefore, the Commission has determined to take no action on the 
suggestions.

    \63\ 37 FR 22935, 22952 (1972).
    \64\ Id. at 22947-48.
    \65\ Id. at 22952-53.
    \66\ Id. at 22952.
---------------------------------------------------------------------------

    Although some commenters recommended a longer cooling-off period or 
expanding the Rule's coverage to all telephone and mail order 
solicitations, or even to all solicitations, they did not provide 
evidence that such changes would be necessary to correct the problems 
that the Rule was issued to address. The Cooling-Off Rule was not 
intended to be a federal ``satisfaction guarantee'' requirement or 
``buyers' remorse'' insurance program. When it issued the Rule in 1972, 
the Commission considered, but rejected, such proposals.67 The 
Rule instead has the limited purpose of correcting the specific problem 
of sales being obtained through high pressure and deceptive sales 
tactics used on consumers at times and places in which consumers 
typically may not expect to be solicited for sales and find it 
difficult to extricate themselves from the situation. Further, with 
respect to telephone solicitations, the Commission has addressed the 
issue of abusive and fraudulent practices in a separate proceeding. On 
August 16, 1995, the Commission promulgated a trade regulation rule 
governing telemarketing practices. This rule becomes effective on 
December 31, 1995.68 Moreover, in mail order solicitations 
consumers can, more easily than in door-to-door sales, avoid or ignore 
unwanted sales pitches. They can simply not read or respond to the 
mailed sales literature. The Commission therefore continues to believe 
that the present Rule provides ample protection for buyers without 
placing undue burdens on sellers.

    \67\ 37 FR 22935, 22947 (Oct. 26, 1972).
    \68\ Telemarketing Sales Rule, 60 FR 43842 (Aug. 23, 1995).
---------------------------------------------------------------------------

    UAW-GM suggested that the Rule be amended to prohibit the delivery 
of 

[[Page 54185]]
goods or the providing of services until expiration of the cooling-off 
period. The commenter stated that, in its experience, once work has 
started or goods have been delivered, buyers think they no longer have 
a right to cancel. No evidence was submitted showing how widespread 
such a misunderstanding might be. The short, six-paragraph ``Notice of 
Cancellation'' required by the Rule to be given to every buyer 
describes in detail what should be done when a buyer cancels a sale 
after goods have been delivered. Accordingly, the Commission has 
determined to take no action on this suggestion.
    Another comment proposed that the cooling-off period continue until 
the seller has complied with all the notice provisions of the Rule. The 
Commission specifically rejected a similar proposal when the Rule was 
issued because it determined that the incorporation of a remedial or 
punitive provision in the Rule for prospective violators was not 
necessary or appropriate.69 The Commission stated further that, 
although an extension of the cooling-off period could be an appropriate 
remedy to include in an order against a seller that had violated the 
Rule, the rulemaking record did not support including such a provision 
in the Rule itself.70 No new evidence or arguments have been 
submitted for why the Commission should revisit this issue; therefore, 
the Commission has determined to take no action on this proposal.

    \69\ Id. at 37 FR 22935, 22957 (Oct. 26, 1972).
    \70\ Id.
---------------------------------------------------------------------------

    In addition to the proposals for Rule amendments discussed above, 
three commenters suggested that the Commission interpret the Rule in 
specific ways and revise the Rule to reflect these interpretations. One 
comment asked that the Commission specify in the Rule that the 
envelopes of mailed cancellation notices must be postmarked on or 
before the third business day after the date the contract is 
signed.71 The Commission rejects incorporating this requirement in 
the Rule. The Rule simply requires that cancellation notices be mailed 
or delivered to sellers by a certain date. Not all mail, not even all 
first class mail, is postmarked with a date. When exactly any notice 
was mailed or delivered is an evidentiary question that may be resolved 
by examining a number of relevant factors, including, but not limited 
to, a postmark.

    \71\ CO, #001, pp 2-3.
---------------------------------------------------------------------------

    Another comment urged the Commission to accept transmission by 
facsimile machines as coming within the Rule's term ``mail or 
deliver.'' 72 The Commission agrees that facsimile transmissions 
would suffice to meet the Rule's delivery component, provided the buyer 
can demonstrate what was transmitted and when. A third comment urged 
the Commission to adopt the presumption used in Ohio in interpreting 
that state's cooling-off statute, which like the FTC's Rule covers 
sales made away from the seller's regular place of business. According 
to this presumption, when initial face-to-face negotiations leading to 
a sale occur outside the seller's regular place of business, the sale 
is presumed to be covered by the statute, even if the buyer later 
executes a final agreement at the seller's regular place of 
business.73 The Rule's definition of ``Door-to-Door Sale'' 
specifies, however, that sales are covered only if the ``buyer's 
agreement or offer to purchase'' is made away from the seller's regular 
place of business. Therefore, the Rule already covers instances in 
which a seller convinces a buyer, away from the seller's place of 
business, to make a purchase and then merely memorializes the sale by 
having the buyer sign the contract at the seller's place of business. 
The Rule does not, however, cover instances in which initial 
negotiations or sales solicitations occur away from the seller's place 
of business and the buyer's agreement is obtained only after arriving 
at the seller's place of business.74 The Commission rejects the 
notion that the Rule should cover such sales. These sales should be 
viewed as sales that take place at the seller's place of business.

    \72\ NACAA, #001, p. 3.
    \73\ LASOD, #008, p. 2.
    \74\ See 16 CFR 429.1, note 1(a)(1).
---------------------------------------------------------------------------

IV. Discussion of Non-Substantive Amendments Being Adopted

    The Commission has decided to adopt certain non-substantive 
amendments to the Rule. The following paragraphs discuss these 
amendments and the reasons for adopting them.
    The current Rule is entitled ``Cooling-Off Period for Door-to-Door 
Sales.'' The Commission is amending 16 CFR Part 429 to rename the Rule 
as ``Cooling-Off Period for Sales Made at Homes or at Certain Other 
Locations'' to clarify that the Rule covers more than just at-home 
sales.
    The current Rule consists of just one section, 16 CFR 429.1, having 
nine paragraphs and two ``Notes.'' The Commission is amending the Rule 
to include the first of these Notes, which contains the Rule's six 
definitions, as a new section of the Rule entitled ``Definitions.'' and 
designated 16 CFR Part 429.0. Further, the Commission is amending the 
Rule to include the second Note, which concerns the effect of the Rule 
on state laws and municipal ordinances, as another new section of the 
Rule entitled ``Effect on State Laws and Municipal Ordinances'' and 
designated 16 CFR Part 429.2.
    The current Rule's definition of the term ``Door-to-Door Sale'' 
states that the term covers sales ``made at a place other than the 
place of business of the seller.'' The Commission is amending this 
definition to add the following parenthetical explanation: ``(e.g., 
sales at the buyer's residence or at facilities rented on a temporary 
or short-term basis, such as hotel or motel rooms, convention centers, 
fairgrounds and restaurants, or sales at the buyer's workplace or in 
dormitory lounges).'' Amending the Rule to include this parenthetical 
statement would incorporate into the Rule the interpretations the 
Commission has provided in various Federal Register notices and other 
official publications.
    The current Rule's definition of the term ``Business Day'' has an 
out-of-date listing of the federal holidays. This list omits Martin 
Luther King's Birthday and has George Washington's Birthday instead of 
Presidents' Day. For the reasons described previously, the Commission 
is amending this provision of the Rule to update the list of federal 
holidays.
    The current Rule does not refer to the two exemptions the 
Commission has granted certain sellers of automobiles and of arts and 
crafts. The Commission therefore is also amending the Rule to add a 
third new section, to be entitled ``Exemptions.'' and designated as 16 
CFR Part 429.3, to contain the exemptions granted to the Rule. The 
Commission has determined to expand the exemption for automobiles to 
all motor vehicles. Thus, section 429.3 will indicate that the 
exemption applies to sellers of motor vehicles who have at least one 
permanent place of business.
    Section 429.1(b) of the current Rule includes a sample of the 
required ``Notice of Cancellation'' that is printed in all upper case 
boldface type. The Rule only specifies the type size (ten point), the 
typeface (boldface), and the language (the same as that used in the 
contract) of the Notice.75 The Rule does not specify any type 
style for the Notice or whether its type must be all uppercase or not. 
The example of the Notice shown in 16 CFR Part 429 is, however, in all 
uppercase type and sellers may think that such a format is required or 
preferred by the 

[[Page 54186]]
Commission. A combination of upper and lowercase type is generally 
regarded by experts as easier to read.76 The Commission, 
therefore, is revising the sample notice so that it will instead appear 
in a combination of upper and lower case boldface type, thereby making 
the sample notice more readable. Sellers may, however, continue to use 
stocks of ``Notices of Cancellation'' printed with an all uppercase 
typeface.

    \75\ 16 CFR 429.1(b).
    \76\ The University of Chicago, Chicago Manual of Style: The 
Essential Guide for Writers, Editors, and Publishers. 14th Ed. 
University of Chicago Press, Chicago, Ill., 1993.
---------------------------------------------------------------------------

    The current Rule repeatedly uses masculine pronouns when referring 
to buyers. The Commission is amending the Rule to change the pronouns 
``he,'' ``his,'' and ``him,'' wherever they appear, to gender neutral 
terms like ``the buyer'' or ``the buyer's.''

List of Subjects in 16 CFR Part 429

    Door-to-door sales; Trade practices.

Text of Amendments

    For the reasons set forth in the preamble, 16 CFR Part 429 is 
amended to read as follows:
    1. The heading of part 429 is revised to read as follows:

PART 429--RULE CONCERNING COOLING-OFF PERIOD FOR SALES MADE AT 
HOMES OR AT CERTAIN OTHER LOCATIONS

    2. Further, the authority citation for part 429 is added to read as 
follows:

    Authority: Sections 1-23, FTC Act, 15 U.S.C. 41-58.

    3. Further, section 429.1 is amended by revising paragraphs (b), 
(d), (e) and (i) and by removing the authority citation following the 
section to read as follows:


Sec. 429.1  The Rule.

* * * * *
    (b) Fail to furnish each buyer, at the time the buyer signs the 
door-to-door sales contract or otherwise agrees to buy consumer goods 
or services from the seller, a completed form in duplicate, captioned 
either ``NOTICE OF RIGHT TO CANCEL'' or ``NOTICE OF CANCELLATION,'' 
which shall (where applicable) contain in ten point bold face type the 
following information and statements in the same language, e.g., 
Spanish, as that used in the contract.

Notice of Cancellation

[enter date of transaction]

----------------------------------------------------------------------
(Date)

    You may CANCEL this transaction, without any Penalty or 
Obligation, within THREE BUSINESS DAYS from the above date.
    If you cancel, any property traded in, any payments made by you 
under the contract or sale, and any negotiable instrument executed 
by you will be returned within TEN BUSINESS DAYS following receipt 
by the seller of your cancellation notice, and any security interest 
arising out of the transaction will be cancelled.
    If you cancel, you must make available to the seller at your 
residence, in substantially as good condition as when received, any 
goods delivered to you under this contract or sale, or you may, if 
you wish, comply with the instructions of the seller regarding the 
return shipment of the goods at the seller's expense and risk.
    If you do make the goods available to the seller and the seller 
does not pick them up within 20 days of the date of your Notice of 
Cancellation, you may retain or dispose of the goods without any 
further obligation. If you fail to make the goods available to the 
seller, or if you agree to return the goods to the seller and fail 
to do so, then you remain liable for performance of all obligations 
under the contract.
    To cancel this transaction, mail or deliver a signed and dated 
copy of this Cancellation Notice or any other written notice, or 
send a telegram, to [Name of seller], at [address of seller's place 
of business] NOT LATER THAN MIDNIGHT OF [date].
    I HEREBY CANCEL THIS TRANSACTION.
(Date)-----------------------------------------------------------------
(Buyer's signature)----------------------------------------------------
* * * * *
    (d) Include in any door-to-door contract or receipt any confession 
of judgment or any waiver of any of the rights to which the buyer is 
entitled under this section including specifically the buyer's right to 
cancel the sale in accordance with the provisions of this section.
    (e) Fail to inform each buyer orally, at the time the buyer signs 
the contract or purchases the goods or services, of the buyer's right 
to cancel.
* * * * *
    (i) Fail, within 10 business days of receipt of the buyer's notice 
of cancellation, to notify the buyer whether the seller intends to 
repossess or to abandon any shipped or delivered goods.
    4. Further, part 429 is amended by redesignating note 1 to 
Sec. 429.1 as Sec. 429.0 and revising it to read as follows:


Sec. 429.0  Definitions.

    For the purposes of this part the following definitions shall 
apply:
    (a) Door-to-Door Sale--A sale, lease, or rental of consumer goods 
or services with a purchase price of $25 or more, whether under single 
or multiple contracts, in which the seller or his representative 
personally solicits the sale, including those in response to or 
following an invitation by the buyer, and the buyer's agreement or 
offer to purchase is made at a place other than the place of business 
of the seller (e.g., sales at the buyer's residence or at facilities 
rented on a temporary or short-term basis, such as hotel or motel 
rooms, convention centers, fairgrounds and restaurants, or sales at the 
buyer's workplace or in dormitory lounges). The term ``door-to-door 
sale'' does not include a transaction:
    (1) Made pursuant to prior negotiations in the course of a visit by 
the buyer to a retail business establishment having a fixed permanent 
location where the goods are exhibited or the services are offered for 
sale on a continuing basis; or
    (2) In which the consumer is accorded the right of rescission by 
the provisions of the Consumer Credit Protection Act (15 U.S.C. 1635) 
or regulations issued pursuant thereto; or
    (3) In which the buyer has initiated the contact and the goods or 
services are needed to meet a bona fide immediate personal emergency of 
the buyer, and the buyer furnishes the seller with a separate dated and 
signed personal statement in the buyer's handwriting describing the 
situation requiring immediate remedy and expressly acknowledging and 
waiving the right to cancel the sale within 3 business days; or
    (4) Conducted and consummated entirely by mail or telephone; and 
without any other contact between the buyer and the seller or its 
representative prior to delivery of the goods or performance of the 
services; or
    (5) In which the buyer has initiated the contact and specifically 
requested the seller to visit the buyer's home for the purpose of 
repairing or performing maintenance upon the buyer's personal property. 
If, in the course of such a visit, the seller sells the buyer the right 
to receive additional services or goods other than replacement parts 
necessarily used in performing the maintenance or in making the 
repairs, the sale of those additional goods or services would not fall 
within this exclusion; or
    (6) Pertaining to the sale or rental of real property, to the sale 
of insurance, or to the sale of securities or commodities by a broker-
dealer registered with the Securities and Exchange Commission.
    (b) Consumer Goods or Services--Goods or services purchased, 
leased, or rented primarily for personal, family, or household 
purposes, including courses of instruction or training regardless of 
the purpose for which they are taken.
    (c) Seller--Any person, partnership, corporation, or association 
engaged in 

[[Page 54187]]
the door-to-door sale of consumer goods or services.
    (d) Place of Business--The main or permanent branch office or local 
address of a seller.
    (e) Purchase Price--The total price paid or to be paid for the 
consumer goods or services, including all interest and service charges.
    (f) Business Day--Any calendar day except Sunday or any federal 
holiday (e.g., New Year's Day, Presidents' Day, Martin Luther King's 
Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, 
Veterans' Day, Thanksgiving Day, and Christmas Day.)
    5. Further, part 429 is amended by redesignating note 2 to 
Sec. 429.1 as Sec. 429.2 and revising it to read as follows:


Sec. 429.2  Effect on State laws and municipal ordinances.

    (a) The Commission is cognizant of the significant burden imposed 
upon door-to-door sellers by the various and often inconsistent State 
laws that provide the buyer the right to cancel a door-to-door sales 
transaction. However, it does not believe that this constitutes 
sufficient justification for preempting all of the provisions of such 
laws and the ordinances of the political subdivisions of the various 
States. The rulemaking record in this proceeding supports the view that 
the joint and coordinated efforts of both the Commission and State and 
local officials are required to insure that consumers who have 
purchased from a door-to-door seller something they do not want, do not 
need, or cannot afford, be accorded a unilateral right to rescind, 
without penalty, their agreements to purchase those goods or services.
    (b) This part will not be construed to annul, or exempt any seller 
from complying with, the laws of any State or the ordinances of a 
political subdivision thereof that regulate door-to-door sales, except 
to the extent that such laws or ordinances, if they permit door-to-door 
selling, are directly inconsistent with the provisions of this part. 
Such laws or ordinances which do not accord the buyer, with respect to 
the particular transaction, a right to cancel a door-to-door sale that 
is substantially the same or greater than that provided in this part, 
which permit the imposition of any fee or penalty on the buyer for the 
exercise of such right, or which do not provide for giving the buyer a 
notice of the right to cancel the transaction in substantially the same 
form and manner provided for in this part, are among those which will 
be considered directly inconsistent.
    6. Further, part 429 is amended to add a new Sec. 429.3 to read as 
follows:


Sec. 429.3  Exemptions.

    (a) The requirements of this part do not apply for sellers of 
automobiles, vans, trucks or other motor vehicles sold at auctions, 
tent sales or other temporary places of business, provided that the 
seller is a seller of vehicles with a permanent place of business.
    (b) The requirements of this part do not apply for sellers of arts 
or crafts sold at fairs or similar places.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 95-25573 Filed 10-19-95; 8:45 am]
BILLING CODE 6750-01-P