Agency Information Collection Activities; Proposed Collection; Comment Request

AGENCY:

Federal Trade Commission (“FTC” or “Commission”).

ACTION:

Notice.

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 is seeking public comments on its proposal to extend through December 31, 2013, the current PRA clearance for information collection requirements contained in its Consumer Product Warranty Rule. Those clearances expire on December 31, 2010.

DATES:

Comments must be received on or before August 30, 2010.

ADDRESSES:

Interested parties are invited to submit written comments electronically or in paper form, by following the instructions in the Request for Comments to 60-Day Notice part of the SUPPLEMENTARY INFORMATION section below. Comments in electronic form should be submitted by using the following Web link: ( https://public.commentworks.com/ftc/consumerwarrantypra ) (and following the instructions on the web-based form). Comments in paper form should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex J), 600 Pennsylvania Avenue, NW, Washington, DC 20580, in the manner detailed in the SUPPLEMENTARY INFORMATION section below.

FOR FURTHER INFORMATION CONTACT:

Requests for copies of the collection of information and supporting documentation should be addressed to Allyson Himelfarb, Investigator, Division of Marketing Practices, Bureau of Consumer Protection, Federal Trade Commission, Room H-286, 600 Pennsylvania Ave., N.W., Washington, DC 20580, (202) 326-2505.

SUPPLEMENTARY INFORMATION:

Proposed Information Collection Activities

Under the PRA, 44 U.S.C. 3501-3521, federal agencies must obtain approval from OMB for each collection of information they conduct or sponsor. “Collection of information” means agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. 44 U.S.C. § 3502(3), 5 CFR § 1320.3(c). Because the number of entities affected by the Commission’s requests will exceed ten, the Commission plans to seek OMB clearance under the PRA. As required by § 3506(c)(2)(A) of the PRA, the Commission is providing this opportunity for public comment before requesting that OMB extend the existing paperwork clearance for the information collection requirements associated with the Commission’s regulations under the FTC’s Rule Concerning Disclosure of Written Consumer Product Warranty Terms and Conditions (the “Warranty Rule”) (OMB Control Number 3084-0111), 16 CFR 701.

The Warranty Rule is one of three rules¹ that the FTC implemented pursuant to requirements of the Magnuson-Moss Warranty Act, 15 U.S.C. 2301 et seq. (“Warranty Act” or “Act”).² The Warranty Rule specifies the information that must appear in a written warranty on a consumer product costing more than $15. The Rule tracks Section 102(a) of the Warranty Act,³ specifying information that must appear in the written warranty and, for certain disclosures, mandates the exact language that must be used.⁴ Neither the Warranty Rule nor the Act requires that a manufacturer or retailer warrant a consumer product in writing, but if they choose to do so, the warranty must comply with the Rule.

Request for Comments

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, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. All comments should be filed as prescribed below, and must be received on or before August 30, 2010.

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 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 Federal Trade Commission Act (“FTC Act”), 15 U.S.C. 46(f), and FTC 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), 16 CFR 4.9(c).⁵

Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comments in electronic form. Comments filed in electronic form should be submitted by using the following web link: ( https://public.commentworks.com/ftc/consumerwarrantypra ) (and following the instructions on the web-based form). To ensure that the Commission considers an electronic comment, you must file it on the web-based form at the web link: ( https://public.commentworks.com/ftc/consumerwarrantypra ). If this Notice appears at ( http://www.regulations.gov/search/index.jsp ), you may also file an electronic comment through that website. The Commission will consider all comments that regulations.gov forwards to it. You may also visit the FTC website at ( http://www.ftc.gov ) to read the Notice and the news release describing it.

A comment filed in paper form should include the “Warranty Rules: Paperwork Comment, FTC File No. P044403” 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 J), 600 Pennsylvania Avenue, NW, Washington, DC 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.

The 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 Commission makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC website. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, at ( http://www.ftc.gov/ftc/privacy.shtm ).

Warranty Rule Burden Statement:

Total annual hours burden: 127,000 hours, rounded to the nearest thousand.

In its 2007 submission to OMB, the FTC estimated that the information collection burden of including the disclosures required by the Warranty Rule was approximately 107,000 hours per year. Although the Rule’s information collection requirements have not changed, this estimate increases the number of manufacturers subject to the Rule based on recent Census data. Nevertheless, because most warrantors would now disclose this information even if there were no statute or rule requiring them to do so, staff’s estimates likely overstate the PRA-related burden attributable to the Rule. Moreover, the Warranty Rule has been in effect since 1976, and warrantors have long since modified their warranties to include the information the Rule requires.

Based on conversations with various warrantors’ representatives over the years, staff has concluded that eight hours per year is a reasonable estimate of warrantors’ PRA-related burden attributable to the Warranty Rule. This estimate takes into account ensuring that new warranties and changes to existing warranties comply with the Rule. Based on recent Census data, staff now estimates that there are 15,922 manufacturers covered by the Rule.⁶ This results in an annual burden estimate of approximately 127,376 hours (15,922 manufacturers x 8 hours of burden per year).

Total annual labor costs: $16,941,000, rounded to the nearest thousand.

Labor costs are derived by applying appropriate hourly cost figures to the burden hours described above. The work required to comply with the Warranty Rule—ensuring that new warranties and changes to existing warranties comply with the Rule—requires a mix of legal analysis and clerical support. Staff estimates that half of the total burden hours (63,688 hours) requires legal analysis at an average hourly wage of $250 for legal professionals,⁷ resulting in a labor cost of $15,922,000. Assuming that the remaining half of the total burden hours requires clerical work at an average hourly wage of $16, the resulting labor cost is approximately $1,019,008. Thus, the total annual labor cost is approximately $16,941,008 ($15,922,000 for legal professionals + $1,019,008 for clerical workers).

Total annual capital or other nonlabor costs: $0.

The Rule imposes no appreciable current capital or start-up costs. As stated above, warrantors have already modified their warranties to include the information the Rule requires. Rule compliance does not require the use of any capital goods, other than ordinary office equipment, which providers would already have available for general business use.