[Federal Register Volume 81, Number 250 (Thursday, December 29, 2016)]
[Notices]
[Pages 95995-95997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31401]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Notice.

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SUMMARY: The information collection requirements described below will 
be submitted to the Office of Management and Budget (OMB) for review, 
as required by the Paperwork Reduction Act (PRA). The FTC seeks public 
comments on its proposal to extend, for three years, the current PRA 
clearance for information collection requirements contained in its Rule 
Governing Pre-sale Availability of Written Warranty Terms. That 
clearance expires on March 31, 2017.

DATES: Comments must be received on or before February 27, 2017.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Request for Comments part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Warranty Rules: 
Paperwork Comment, FTC File No. P044403'' on your comment, and file 
your comment online at https://ftcpublic.commentworks.com/ftc/presaleavailabilityrulepra by following the instructions on the web-
based form. If you prefer to file your comment on paper, mail or 
deliver your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite 
CC-5610 (Annex J), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
J), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Requests for copies of the collection 
of information and supporting documentation should be addressed to 
Christine M. Todaro, Attorney, Division of Marketing Practices, Bureau 
of Consumer Protection, Federal Trade Commission, 600 Pennsylvania 
Avenue NW., CC-8528, Washington, DC 20580, (202) 326-3711.

SUPPLEMENTARY INFORMATION: 

Proposed Information Collection Activities

    Under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3520, 
federal agencies must get OMB approval for each collection of 
information they conduct, sponsor, or require. ``Collection of 
information'' means agency requests or requirements to submit reports, 
keep records, or provide information to a third party. 44 U.S.C. 
3502(3); 5 CFR 1320.3(c). As required by section 3506(c)(2)(A) of the 
PRA, the FTC is providing this opportunity for public comment before 
requesting that OMB extend the existing PRA clearance for the 
information collection requirements associated with the Commission's 
Rule Governing Pre-sale Availability of Written Warranty Terms, (the 
Pre-sale Availability Rule), 16 CFR part 702 (OMB Control Number 3084-
0112).
    The FTC invites comments on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond. All comments must be received on or before February 27, 
2017.
    The Pre-sale Availability Rule, 16 CFR 702, is one of three rules 
\1\ that the FTC issued as required by the Magnuson Moss Warranty Act, 
15 U.S.C. 2301 et seq. (Warranty Act or Act).\2\ The Pre-sale 
Availability Rule requires sellers and warrantors to make the text of 
any written warranty on a consumer product costing more than $15 
available to the consumer before sale. Among other things, the Rule 
requires sellers to make the text of the warranty readily available 
either by (1) displaying it in close proximity to the product or (2) 
furnishing it on request and posting signs in prominent locations 
advising consumers that the warranty is available. The Rule requires 
warrantors to provide materials to enable sellers to comply with the 
Rule's requirements and also sets out the methods by which

[[Page 95996]]

warranty information can be made available before the sale if the 
product is sold through catalogs, mail order, or door to door sales. In 
addition, in 2016, the FTC revised the Rule to allow warrantors to post 
warranty terms on Internet Web sites if they also provide a non-
Internet based method for consumers to obtain the warranty terms and 
satisfy certain other conditions. The revised Rule also allows certain 
sellers to display warranty terms pre-sale in an electronic format if 
the warrantor has used the online method of disseminating warranty 
terms.
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    \1\ The other two rules relate to the information that must 
appear in a written warranty on a consumer product costing more than 
$15 if a warranty is offered and minimum standards for informal 
dispute settlement mechanisms that are incorporated into a written 
warranty.
    \2\ 40 FR 60168 (Dec. 31, 1975).
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Pre-Sale Availability Rule Burden Statement

    Total annual hours burden: 2,823,803 hours.
    In its 2013 submission to OMB, FTC staff estimated that the 
information collection burden of making the disclosures required by the 
Pre-sale Availability Rule was approximately 2,446,610 hours per year. 
Staff has adjusted upward its previous estimate of the number of 
manufacturers subject to the Rule based on recent Census data. From 
that, staff now estimates that there are approximately 1,028 large 
manufacturers and 30,299 small manufacturers subject to the Rule. In 
addition, recent Census data suggests that there are an estimated 7,745 
large retailers and 508,575 small retailers impacted by the Rule.
    In September 2016, the FTC approved amendments to the Pre-sale 
Availability Rule, which became effective on October 12, 2016. Under 
the amendments, warrantors may display warranty terms online and 
provide information to consumers to obtain those terms via non-Internet 
means. The amendments also allow sellers to provide pre-sale warranty 
terms electronically or conventionally if the warrantor has chosen to 
display its warranty terms online. 81 FR 63664 (Sept. 15, 2016). 
Sellers of warranted goods for which the warrantor has chosen the 
online method may incur a slightly increased burden because the seller 
will have to ensure it provides consumers a method of reviewing the 
warranty terms at the point of sale, prior to sale. That burden, 
however, should be minimal, given that the warrantor will have to make 
the warranty terms available on an Internet Web site, and given the 
provision requiring the warrantor to supply a hard copy of the warranty 
terms, promptly and free of charge, in response to a seller's or a 
consumer's request. In addition, any burden on sellers could be offset 
by sellers having additional flexibility to make pre-sale warranty 
terms available to consumers electronically.
    Therefore, staff continues to estimate that large retailers spend 
an average of 20.8 hours per year and small retailers spend an average 
4.8 hours per year to comply with the Rule. Accordingly, the total 
annual burden for retailers is approximately 2,602,256 hours ((7,745 
large retailers x 20.8 burden hours) + (508,575 small retailers x 4.8 
burden hours)). Staff also estimates that more manufacturers will 
provide retailers with warranty information in electronic form in 
fulfilling their obligations under the Rule and thus staff has adjusted 
the hour burden for manufacturers as it did in its previous submission 
to OMB. Applying a 20% reduction to its previous estimates, staff now 
assumes that large manufacturers spend an average of 26.88 hours per 
year and that small manufacturers spend an average of 6.4 hours per 
year to comply with the Rule. Accordingly, the total annual burden 
incurred by manufacturers is approximately 221,547 hours ((1,028 large 
manufacturers x 26.88 hours) + (30,299 small manufacturers x 6.4 
hours)).
    Thus, the total annual burden for all covered entities is 
approximately 2,823,803 hours (2,602,256 hours for retailers + 221,547 
hours for manufacturers).
    Total annual labor cost: $62,123,688.
    The work required to comply with the Pre-sale Availability Rule 
entails a mix of clerical work and work performed by sales associates. 
Staff estimates that half of the total burden hours would likely be 
performed by sales associates. At the manufacturing level, this work 
would entail ensuring that the written warranty is available for every 
warranted consumer product. At the retail level, this work would entail 
ensuring that the written warranty is made available to the consumer 
prior to sale. The remaining half of the work required to comply with 
the Pre-sale Availability Rule is clerical in nature, e.g., shipping or 
otherwise providing copies of manufacturer warranties to retailers and 
retailer maintenance of them. Applying a sales associate wage rate of 
$24/hour to half of the burden hours and a clerical wage rate of $20/
hour to half of the burden hours, the total annual labor cost burden is 
approximately $62,123,688 (1,411,902 hours x $24 per hour) + (1,411,902 
hours x $20 per hour).\3\
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    \3\ The wage rates are derived from occupational data found in 
the Bureau of Labor Statistics, Occupational Employment and Wages 
(May 2015).
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    Total annual capital or other non-labor costs: De minimis.
    The vast majority of retailers and warrantors already have 
developed systems to provide the information the Rule requires. 
Compliance by retailers typically entails keeping warranties on file, 
in binders or otherwise, and posting an inexpensive sign indicating 
warranty availability. Warrantor compliance under the 2016 amendments 
entails providing retailers, together with the warranted good, a copy 
of the warranty or the address of the warrantor's Internet Web site 
where the consumer can review and obtain the warranty terms, along with 
the contact information where the consumer may use a non-Internet based 
method to obtain a free copy of the warranty terms. Commission staff 
believes that, in light of the amendments, annual capital or other non-
labor costs will remain de minimis.

Request for Comments

    You can file a comment online or on paper. Write ``Pre-sale 
Availability Rule: Paperwork Comment, FTC File No. P044403'' on your 
comment. Your comment--including your name and your state--will be 
placed on the public record of this proceeding, including, to the 
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone'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. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is . . . privileged or confidential,'' as discussed in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a

[[Page 95997]]

request for confidential treatment, and you have to follow the 
procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c). Your comment 
will be kept confidential only if the FTC General Counsel, in his or 
her sole discretion, grants your request in accordance with the law and 
the public interest. Postal mail addressed to the Commission is subject 
to delay due to heightened security screening. As a result, the 
Commission encourages you to submit your comments online. To make sure 
that the Commission considers your online comment, you must file it at 
https://ftcpublic.commentworks.com/ftc/presaleavailabilitypra, by 
following the instructions on the Web-based form. If this Notice 
appears at http://www.regulations.gov, you also may file a comment 
through that Web site.
    If you file your comment on paper, write ``Pre-sale Availability 
Rule: Paperwork Comment, FTC File No. P044403'' on your comment and on 
the envelope, and mail or deliver it to the following address: Federal 
Trade Commission, Office of the Secretary, Room H-113 (Annex J), 600 
Pennsylvania Avenue NW., Washington, DC 20580. If possible, submit your 
paper comment to the Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice. The FTC Act and other laws that 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 on or before February 27, 
2017. You can find more information, including routine uses permitted 
by the Privacy Act, in the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

David C. Shonka,
Acting General Counsel.
[FR Doc. 2016-31401 Filed 12-28-16; 8:45 am]
BILLING CODE 6750-01-P