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Making a List and Checking it Twice: FTC Sends Warning to Online Retailers

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Making a List and Checking it Twice: FTC Sends Warning to Online Retailers

Santa’s not the only one who is making a list this holiday season: the FTC is keeping a close watch on online retailers and is warning that misbehaving retailers will be getting lumps of coal in the form of FTC enforcement actions. The holiday dust-up stems from a series of letters that the FTC recently sent out to Internet retailers reminding them of their obligation to ensure that consumers have access to product warranty information before they make their purchases.

Under the FTC’s Pre-Sale Availability Rule, retailers are required to make warranties available at the time of purchase for all warranted consumer products that cost more than $15, regardless of how the products are sold. Generally, this requires sellers either to display the warranty document in close proximity to the product or to furnish the warranty document on request and to provide notice of the document’s availability. For online sales, the FTC noted that this requirement can be satisfied by, for example, posting a clearly labeled hyperlink to the warranty in close proximity to the product description. A recent FTC survey, however, found several instances in which Internet retailers failed to comply with the Rule.

For now, the FTC is just warning retailers that are not compliant. If retailers fail to correct their sites within 90 days, however, the FTC says it may take more aggressive action.

The FTC letters serve as a reminder to all retailers that regulators are paying close attention to consumer protection issues during the busy holiday shopping season. The FTC Pre-Sale Availability Rule on product warranty availability is just one of several potential areas of federal or state enforcement action and retailers should make sure they are up to date with all of their consumer protection obligations. Please contact Anthony Lupo, Sarah Bruno, Matt Mills, or Dan Jasnow for more information.

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