2010-25983. Agency Information Collection Activities; Request for OMB Review; Comment Request

AGENCY:

Federal Trade Commission (FTC or Commission).

ACTION:

Notice and request for comment.

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 November 15, 2010.

ADDRESSES:

Interested parties are invited to submit written comments electronically or in paper form, by following the instructions in the Request for Comments part of the SUPPLEMENTARY INFORMATION section below. Comments in electronic form should be submitted by using the following Web link: (https://ftcpublic.commentworks.com/​ftc/​consumerwarrantypra2) (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., NW., Washington, DC 20580, [phone].

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).

On July 1, 2010, the FTC sought comment on the information collection requirements associated with the Rule Concerning Disclosure of Written Consumer Product Warranty Terms and Conditions (the Warranty Rule), 16 CFR part 701. No comments were received. Pursuant to the OMB regulations, 5 CFR part 1320, that implement the PRA, the FTC is providing this second opportunity for public comment while seeking OMB approval to renew the pre-existing clearance for the Rule (OMB Control No. 3084-0111). All comments should be filed as prescribed herein and must be received on or before November 15, 2010.

The Warranty Rule is one of three rules ^[1] 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

Interested parties are invited to submit written comments electronically or in paper form. Comments should refer to “Warranty Rules: Paperwork Comment, FTC File No. P044403” to facilitate the organization of comments. Please note that your comment—including your name and your State—will be placed on the public record of this proceeding, including on the publicly accessible FTC Web site, at http://www.ftc.gov/​os/​publiccomments.shtm.

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 Commission 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).

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://ftcpublic.commentworks.com/​ftc/​consumerwarrantypra2 (and following the instructions on the Web-based form). If this Notice appears at http://www.regulations.gov, you may also file an electronic comment through that Web site. The Commission will consider all comments that regulations.gov forwards to 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.

Comments on any proposed recordkeeping, or disclosure requirements that are subject to Paperwork Reduction Act review by the OMB should additionally be submitted via facsimile to OMB at [phone] and addressed as follows: Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Federal Trade Commission. Facsimile submission is preferred over U.S. postal mail delivery by the OMB, as the latter type of delivery is subject to delays due to heightened security precautions. Still, in case it is needed, the OMB mail address is: Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Docket Library, Room 10102, 725 17th Street, NW., Washington, DC 20503. The OMB requests that any comment filed in paper form be sent by courier or overnight service, if possible.

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's Web site, 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's Web site. 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.^[5] 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 × 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.

Willard K. Tom,

General Counsel.

Footnotes

1.  The other two rules relate to the pre-sale availability of warranty terms and minimum standards for informal dispute settlement mechanisms that are incorporated into a written warranty.

2.  40 FR 60168 (Dec. 31, 1975).

3.  15 U.S.C. 2302(a).

4.  40 FR 60168, 60169-60170.

5.  FTC staff recently contacted two manufacturing associations—the Association of Home Appliance Manufacturers and the National Association of Manufacturers—but we have not received any additional information that further clarifies this estimate.

6.  Because some manufacturers likely make products that are not priced above $15 or not intended for household use—and thus would not be subject to the Rule—this figure is likely an overstatement.

7.  Staff has derived an hourly wage rate for legal professionals based upon industry knowledge. The clerical wage rate used in this Notice is based on recent data from the Bureau of Labor Statistics National Compensation Survey.