[Federal Register Volume 74, Number 75 (Tuesday, April 21, 2009)]
[Proposed Rules]
[Pages 18170-18172]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-9135]


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FEDERAL TRADE COMMISSION

16 CFR Part 429


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

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Request for public comment.

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SUMMARY: The Commission requests public comment on its Trade Regulation 
Rule Concerning Cooling-Off Period for Sales Made at Homes or at 
Certain Other Locations (``Cooling-Off Rule'' or ``Rule''). The 
Commission is soliciting public comment as part of the FTC's systematic 
review of all current Commission regulations and guides.

DATES: Written comments concerning the Cooling-Off Rule must be 
received no later than June 22, 2009.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``Cooling-Off 
Rule Regulatory Review, 16 CFR 429, Comment, Project No. P087109'' to 
facilitate the organization of comments. Please note that your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including on the publicly accessible 
FTC website, at (http://ftc.gov/os/publiccomments.shtm.)
    Because comments will be made public, they should not include any 
sensitive personal information, such as an individual's Social Security 
Number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. Comments also 
should not include any sensitive

[[Page 18171]]

health information, such as medical records or other individually 
identifiable health information. In addition, comments should not 
include any ``[t]rade secret or any commercial or financial information 
which is obtained from any person and which is privileged or 
confidential. . . ,'' as provided in Section 6(f) of the FTC Act, 15 
U.S.C. 46(f), and Commission Rule 4.10(a)(2), 16 CFR 4.10(a)(2). 
Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c).\1\
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    \1\ See also FTC Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c),
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    A comment filed in paper form should include the ``Cooling-Off Rule 
Regulatory Review, 16 CFR 429, Comment, Project No. P087109'' reference 
both in the text and on the envelope, and should be mailed or delivered 
to the following address: Federal Trade Commission/Office of the 
Secretary, Room H-135 (Annex M), 600 Pennsylvania Avenue, N.W., 
Washington, D.C. 20580. The FTC is requesting that any comment filed in 
paper form be sent by courier or overnight service, if possible, 
because U.S. postal mail in the Washington area and at the Commission 
is subject to delay due to heightened security precautions.
    You also may consider submitting your comments in electronic form. 
Comments filed in electronic form should be submitted by following the 
instructions on the web-based form at the weblink (https://secure.commentworks.com/ftc-cooling-offrulereview). To ensure that the 
Commission considers an electronic comment, you must file it on that 
web-based form. If this Notice appears at (http://www.regulations.gov/search/index.jsp), you also may file an electronic comment through that 
website. The Commission will consider all comments that regulations.gov 
forwards to it. You also may visit the FTC website at http://www.ftc.gov to read the Notice and the news release describing it.
    The Federal Trade Commission Act (``FTC Act'') and other laws the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding as appropriate. The Commission will 
consider all timely and responsive public comments that it receives, 
whether filed in paper or electronic form. Comments received will be 
available to the public on the FTC website, to the extent practicable, 
at (http://www.ftc.gov/os/publiccomments.shtm.) As a matter of 
discretion, the FTC makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC website. To read our policy on how we 
handle the information you submit--including routine uses permitted by 
the Privacy Act--please review the FTC's privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm.)

FOR FURTHER INFORMATION CONTACT: Sana Coleman Chriss, Attorney, (404) 
656-1364, Federal Trade Commission, Southeast Region, 225 Peachtree 
Street, NE, Suite 1500, Atlanta, Georgia 30303.

SUPPLEMENTARY INFORMATION:

I. Background

    The Cooling-Off Rule was promulgated by the Commission on October 
26, 1972, and it was last amended on October 20, 1995.\2\ The Rule, as 
amended, declares it an unfair and deceptive practice for a seller 
engaged in a ``door-to-door sale''\3\ of consumer goods or services, 
with a purchase price of $25 or more, to fail to provide the buyer with 
certain oral and written disclosures regarding the buyer's right to 
cancel the contract within three business days from the date of the 
sales transaction.\4\ The Rule also requires such sellers, 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, returning any traded-in property, cancelling and 
returning any security interests created in the transaction, and 
notifying the buyer whether the seller intends to repossess or abandon 
any shipped or delivered goods.
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    \2\ 37 FR 22933 (Oct. 26, 1972); 60 FR 54180 (Oct. 20, 1995).
    \3\ A ``door-to-door sale'' includes sales 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). 16 CFR 429.0(a).
    \4\ As a basis for promulgating the Rule, the Commission 
identified five categories of complaints directed to the industries 
utilizing door-to-door marketing techniques: (1) deceptive tactics 
for getting in the door; (2) high pressure sales tactics; (3) 
misrepresentation of price, quality, and characteristics of the 
product; (4) high prices for low quality merchandise; and (5) the 
nuisance created by the uninvited salesperson. 37 FR 22937-940 (Oct. 
26, 1972).
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    In addition, the Rule requires door-to-door sellers 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, which must be in the same language as that principally 
used in the oral sales presentation. Door-to-door sellers also must 
provide 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.
    The Rule provides for certain exemptions and excludes certain 
transactions from the definition of the term ``door-to-door sale.'' 
Specifically, the Rule exempts: (1) 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; and (2) sellers of arts 
and crafts sold at fairs or similar places. The Rule also excludes 
certain transactions, including, for example, transactions conducted 
and consummated entirely by mail or telephone, and without any other 
contact between the buyer and seller or its representative prior to the 
delivery of goods or performance of services; transactions 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; and transactions 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 its regulations.
    Finally, the Rule expressly preempts any state laws or municipal 
ordinances that are directly inconsistent with the Rule, including, for 
example, state laws or ordinances that impose a fee or penalty on the 
buyer for exercising his or her right under the Rule, or that do not 
require the buyer to receive a notice of his or her right to cancel the 
transaction in substantially the same form as provided in the 
Commission's Rule.

II. Regulatory Review of the Cooling-Off Rule

    The Commission periodically reviews each of its rules and guides to 
seek information about their costs and benefits and their regulatory 
and economic impact. The information obtained during these periodic 
reviews assists the Commission in identifying rules and guides that 
either should be

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retained without modification, amended, or rescinded. This Notice 
commences the Commission's review of the Cooling-Off Rule.
    As part of its review, the Commission seeks comment on a number of 
general issues, including the continuing need for the Rule, its 
economic impact, and the effect of any technological, economic, or 
industry changes on the Rule.

III. Issues for Comment

    The Commission requests written comment on any or all of the 
following questions. The Commission asks commenters to make their 
responses as specific as possible and to include both a reference to 
the question being answered and any references to empirical data or 
other evidence wherever available and appropriate.
    (1) Is there a continuing need for the Rule? Why or why not?
    (2) Are there practices addressed by the Rule for which regulation 
is no longer needed? If so, explain and provide supporting evidence.
    (3) What benefits has the Rule provided to consumers? What evidence 
supports the asserted benefits?
    (4) What modifications, if any, should be made to the Rule to 
increase its benefits to consumers?
    (a) What evidence supports the proposed modifications?
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers?
    (c) How would these modifications affect the costs and benefits of 
the Rule for businesses, and in particular for small businesses?
    (5) What impact has the Rule had on the flow of truthful 
information to consumers and on the flow of deceptive information to 
consumers? What evidence supports the impact that you have identified?
    (6) What significant costs has the Rule imposed on consumers? What 
evidence supports the asserted costs?
    (7) Should any modifications be made to the Rule to reduce the 
costs imposed on consumers?
    (a) What evidence supports the proposed modifications?
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers?
    (c) How would these modifications affect the costs and benefits of 
the Rule for businesses, and in particular for small businesses?
    (8) Is the cancellation notice language provided in the Rule easy 
for consumers to read and understand? Why or why not? Should the 
language be modified in any way to improve consumers' understanding of 
their rights and obligations under the Rule? If so, how?
    (9) What benefits has the Rule provided to businesses, and in 
particular to small businesses? What evidence supports the asserted 
benefits?
    (10) Should any modifications be made to the Rule to increase its 
benefits to businesses, and in particular to small businesses?
    (a) What evidence supports your proposed modifications?
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers?
    (c) How would these modifications affect the costs and benefits of 
the Rule for businesses?
    (11) What significant costs, including costs of compliance, has the 
Rule imposed on businesses, and in particular on small businesses? What 
evidence supports the asserted costs?
    (12) Should any modifications be made to the Rule to reduce the 
costs imposed on businesses, and in particular on small businesses?
    (a) What evidence supports the proposed modifications?
    (b) How would these modifications affect the costs and benefits of 
the Rule for consumers?
    (c) How would these modifications affect the costs and benefits of 
the Rule for businesses?
    (13) What evidence is available concerning the degree of industry 
compliance with the Rule?
    (14) Should the Rule be modified to reflect any technological 
changes in communications methods or methods for buying and selling 
goods and services, including, for example, changes in the use of the 
Internet, electronic mail, or mobile communications? If so, how? What 
evidence supports the proposed modification?
    (15) Have there been any significant industry or economic changes 
since 1995 that warrant modifying the types of sellers that are exempt 
from the Rule?
    (16) What potentially unfair or deceptive door-to-door sales 
practices, if any, are not covered by the Rule that should be? Provide 
evidence to support the assertion.
    (17) Does the Rule overlap or conflict with other federal, state, 
or local laws or regulations? If so, how?
    (a) What evidence supports the asserted conflicts?
    (b) With reference to the asserted conflicts, should the Rule be 
modified? If so, why, and how? If not, why not?
    (c) Is there evidence concerning whether the Rule has assisted in 
promoting national consistency with respect to the regulation of door-
to-door sales? If so, please provide that evidence.
    (18) Have there been any significant changes since 1995 in U.S. 
consumer credit protection laws or other laws that warrant modification 
of the Rule? If so, explain and provide evidence to support the 
proposed modification.

List of Subjects in 16 CFR Part 429

    Sales Made at Homes or at Certain Other Locations; Trade practices.

    Authority: Sections 1-23, FTC Act, 15 U.S.C. 41-58.
    By direction of the Commission.

Donald S. Clark,
Secretary
[FR Doc. E9-9135 Filed 4-20-09: 8:45 am]
BILLING CODE 6750-01-S