For Release:
November 19, 2001
FTC 'Surf' of 110 Internet Retailers Designed To Bolster
Consumer Confidence During Holiday Season
Letters Sent to 72 E-tailers
to Help them Better Comply with Commission Requirements
The Federal Trade Commission's
Division of Enforcement announced today that it recently
conducted a surf of 110 Internet retailers offering top-selling
holiday items. The purpose of the "HolidaySmarts.com" surf was
to find out whether e-tailers were making "quick-ship" claims
and certain other disclosures for popular holiday items. As a
result of the surf, FTC staff sent letters to 72 e-tailers
stating, "[A]s we enter the holiday shopping season, we want to
be sure you are aware of and comply with applicable federal
regulations..."
In announcing the results of the
surf, Howard Beales, FTC's Director of the Bureau of Consumer
Protection, said, "Some analysts believe that 2001 online
holiday shopping sales will exceed last year's holiday e-commerce
season. As consumers turn to the Internet for their holiday
purchases - from electronic devices, jewelry, clothing to
computers - we want to ensure that they get what they expect."
The FTC staff found that 52 of
the 110 sites made "quick-ship" claims. Those sites assured
consumers that in-stock items usually ship within 24 to 48 hours
after an order is placed - a concern for consumers trying to
complete their holiday shopping on time. Online shipment claims
are governed by the Mail Order Rule, which requires merchants to
ship orders to buyers within the time stated, or, if no time is
stated, within 30 days. If unable to ship within the applicable
time, the merchant must notify the customer of the delay within
the original shipment time and provide a revised shipping date.
Sites that promise to ship within 48 hours but find they can't
must notify their customers within that period and give them the
option to cancel.
During the 1999 holiday season,
many Internet sellers claimed they could ship extremely
quickly, from "overnight" to 48 or 72 hours.
Unfortunately, some were unable to meet their (shipment claims,
and the FTC brought civil penalty actions against seven
well-known e-tailers for allegedly violating the Mail Order
Rule. The companies paid more than $1.5 million in total
penalties. Staff found fewer problems during the 2000 holiday
season.
This year's surf also found that
52 of the sites selling warranted products didn't provide
adequate information about the warranties. The Warranty Rule
requires that written warranties on consumer products costing
more than $15 be made available to consumers before they buy. To
comply with the Warranty Rule, an online seller must include on
its Web site either the full text of all written warranties or a
general statement that they can be obtained free upon written
request and an address where the warranty can be acquired. The
warranty information must be placed near the product
description, or be located clearly and conspicuously in a
separate information section on the website. It is not
sufficient for sites to summarize simply the terms of a
manufacturer's warranty.
Sixteen sites were sent letters
advising them of their obligations to tell consumers if their
gemstone jewelry may have been treated or enhanced and require
special care to retain its appearance, as required by the
Jewelry Guides. Finally, five sites selling apparel were advised
to make FTC-required country-of-origin disclosures. |