FOR IMMEDIATE RELEASE:  October 26, 1988


        FTC TO CONSIDER AMENDING MAIL ORDER RULE TO COVER
              TELEPHONE SALES; SEEKS PUBLIC COMMENT


     The Federal Trade Commission today announced it has issued
an Advance Notice of Proposed Rulemaking to consider whether its
mail order rule should be expanded to cover telephone sales and
other newly developing telemarketing technologies.  

     The Commission is also seeking comments on whether there is
a need to amend the rule's language that defines when a credit
order is properly completed.

     The mail order rule, which currently regulates only
transactions involving orders placed through the mails, requires
companies to ship an order within the time promised in their
advertisement.  If no time period is promised, the company must
ship an order within 30 days after receiving it, unless the
consumer agrees to a specific delay.  When there is a shipment
delay, the company must send consumers an "option notice," giving
them the option of either consenting to the delay or cancelling
the order and receiving a refund.

     According to the Commission, "our experience enforcing the
mail order rule suggests that many of the problems that led to
the promulgation of the rule have surfaced in the burgeoning
telemarketing industry as well."  The Commission is seeking
comment on whether the rule should be expanded to include
telephone sales and newly developing telemarketing technologies,
such as interactive cable systems.

     While credit sales currently represent only a small
percentage of sales the rule covers, extending the rule to
telemarketing sales would dramatically increase the volume of
credit transactions the rule would cover, according to the
Commission.  Therefore, it is seeking comment on whether to
modify the definition of a "properly completed order" to read
"one in which the seller receives sufficient information to
charge the buyer's account."
  

                             (More)
„The rule now defines receipt of a properly completed order
as the time the seller charges the buyer's charge account. 
According to the Commission, this definition makes it possible
for merchants to hold orders without notice to the buyers and
without providing them any options to cancel, as long as they do
not charge the buyers' accounts.

     Comments must be received by Dec. 27, 1988, and should be
addressed:  Advance Notice of Proposed Rulemaking/Amendment of
the Mail Order Merchandise Rule, Federal Trade Commission, 6th
St. and Pennsylvania Ave. N.W., Washington, D.C. 20580.

     A Federal Register notice announcing the Advance Notice of
Proposed rulemaking is scheduled to be published Oct. 27.   
Copies of the notice are available from the FTC's Public
Reference Branch, Room 130, 6th St. and Pennsylvania Ave. N.W.
Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502.

                              # # #

MEDIA CONTACT:  Dee Ellison, Office of Public Affairs,
                202-326-2177

STAFF CONTACT:  Joel N. Brewer, Bureau of Consumer Protection,
                202-326-2967


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