98-30604. Agency Information Collection Activities; Proposed Collection; Comment Request; Extension  

  • [Federal Register Volume 63, Number 220 (Monday, November 16, 1998)]
    [Notices]
    [Pages 63731-63735]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 98-30604]
    
    
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    FEDERAL TRADE COMMISSION
    
    
    Agency Information Collection Activities; Proposed Collection; 
    Comment Request; Extension
    
    AGENCY: Federal Trade Commission.
    
    ACTION: Notice.
    
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    SUMMARY: The proposed 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. The Federal 
    Trade Commission (FTC) is soliciting public comments on proposed 
    extensions of Paperwork Reduction Act clearance for information 
    collection requirements associated with five rules issued and enforced 
    by the Commission. OMB has extended the expiration for these clearances 
    by 180 days, from September 30, 1998 to March 29, 1999. The FTC 
    proposes that OMB extend its approval for the regulations an additional 
    three years from the prior expiration date of September 30, 1998.
    
    DATES: Comments must be submitted on or before January 15, 1999.
    
    ADDRESSES: Send written comments to Gary M. Greenfield, Attorney, 
    Office of the General Counsel, Federal Trade Commission, Washington, DC 
    20580, 202-326-2753. All comments should be identified as responding to 
    this notice.
    
    FOR FURTHER INFORMATION CONTACT:
    Requests for additional information or copies of the proposed 
    information requirements should be addressed to Gary M. Greenfield, 
    Attorney, Office of the General Counsel, Federal Trade Commission, 
    Washington, DC 20580, 202-326-2753.
    
    SUPPLEMENTARY INFORMATION: Under the Paperwork Reduction Act of 1995 
    (PRA) (44 U.S.C. 3501-3520), 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). As 
    required by section 3506(c)(2)(A) of the PRA, the FTC is providing this 
    opportunity for public comment before requesting that OMB extend the 
    existing paperwork clearance for the regulations noted herein.
    
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        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.
        The relevant information collection requirements are as follows:
        1. The Funeral Rule, 16 CFR Part 453 (OMB Control Number: 3084-
    0025), ensures that consumers who are purchasing funeral goods and 
    services have accurate information about the terms and conditions 
    (especially prices) for such goods and services. The Rule requires that 
    funeral providers disclose this information to consumers and maintain 
    records to facilitate enforcement of the Rule.
        Estimated annual hours burden: The estimated burden associated with 
    the collection of information required by the Rule is 22,300 hours for 
    recordkeeping and 57,900 hours for disclosures, for a total of 80,200 
    hours. This estimate is based on the number of funeral providers 
    (approximately 22,300), the number of funerals annually (approximately 
    2.3 million), and the time needed to fulfill the information collection 
    tasks required by the Rule.
        Recordkeeping: The Rule requires that funeral providers retain 
    copies of price lists and statements of funeral goods and services 
    selected by consumers. Based on a maximum average burden of one hour 
    per provider per year for this task, the total burden for the 22,300 
    providers is 22,300 hours. This estimate is unchanged from 1995.
        Disclosure: The Rule requires that funeral providers (1) maintain 
    current price lists for funeral goods and services, (2) provide written 
    documentation of the funeral goods and services selected by consumers 
    making funeral arrangements, and (3) provide information about funeral 
    prices in response to telephone inquiries.
        Maintaining current price lists requires that funeral providers 
    revise their price lists from time to time through the year to reflect 
    price changes. Based on a maximum average burden of two hours per 
    provider per year for this task, the total burden for 22,300 providers 
    is 44,600 hours. This estimate is unchanged from the FTC's previous 
    estimate in 1995.
        The original rulemaking record indicated that 87 percent of funeral 
    providers provided written documentation of funeral arrangements, even 
    in the absence of the Rule's requirements.\1\
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        \1\ The original version of the Funeral Rule required that 
    funeral providers retain a copy of and give each customer a separate 
    ``Statement of Funeral Goods and Services Selected.'' The 1994 
    amendments to the Rule eliminated that requirement, allowing instead 
    for such disclosures to be incorporated into a written contract, 
    bill of sale, or other record of a transaction that providers use to 
    memorialize sales agreements with customers.
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        Accordingly, the Rule imposes a disclosure burden on 2,899 
    providers (13 percent of 22,300 providers). These providers are 
    typically the smallest funeral homes. The disclosure requirement can be 
    satisfied through the use of a standard form (an example of which is 
    available to the industry in the Compliance Guide to the Funeral Rule). 
    Based on an estimation that these smaller homes arrange, on average, 
    approximately 20 funerals per year and that it would take each of them 
    about 3 minutes to record prices for each consumer on the standard 
    form, FTC staff estimates that the total burden associated with this 
    disclosure requirement is one hour per provider not already in 
    compliance, for a total of 2,899 hours.
        The Funeral Rule also requires funeral providers to answer 
    telephone inquiries about the provider's offerings or prices. Industry 
    data indicate that only about nine percent of funeral purchasers make 
    telephone inquiries, with each call lasting an estimated three minutes. 
    Only about half of that additional time is attributable to disclosures 
    required solely by the Rule, since many providers would provide the 
    requested information even without the Rule. Thus, assuming that the 
    average purchaser makes two calls per funeral to compare prices, the 
    estimated burden is 10,350 hours [(\1/2\ x 3 minute call x 2 calls/
    funeral) x 207,000 funerals (nine percent of 2,300,000 funerals/year)]. 
    This burden likely will decline over time as consumers increasingly 
    rely on the Internet for funeral price information.
        In sum, the disclosure total is 57,849 hours (44,600+2,899+10,350), 
    rounded to 57,900 hours. The total estimated hours burden associated 
    with the Rule for both recordkeeping and disclosure requirements is 
    80,200 (Recordkeeping: 22,300 hours+Disclosure: 57,900 hours).
        Estimated annual cost burden: $3,900,000, rounded ($3,560,000 in 
    labor costs and $340,300 in non-labor costs).
        Labor costs: Labor costs are derived by applying appropriate hourly 
    cost figures to the burden hours described above. The hourly rates used 
    below are averages.
        Clerical personnel, at an hourly rate of $10, can perform the 
    recordkeeping tasks required under the Rule. Based on the estimated 
    hour burden of 22,300 hours, the estimated cost burden for 
    recordkeeping is $223,000 ($10  x  22,300 hours).
        The two hours required of each provider, on average, to update 
    price lists should consist of approximately 1.5 hours of managerial or 
    professional time, at $75 per hour, and .5 hours of clerical time, at 
    $10 per hour, for a total of $117.50 per provider. Thus, the estimated 
    total cost burden for maintaining price lists is $2,620,250 ($117.50 
    x  22,300 providers) (rounded to $2,620,000).
        The cost of providing written documentation of the goods and 
    services selected by the consumer is 2,899 hours of managerial or 
    professional time at approximately $75 per hour, or $217,425 (rounded 
    to $217,000).
        The cost of responding to telephone inquiries about offerings or 
    prices is 10,350 hours of managerial or professional time at $75, or 
    $766,250 (rounded to $766,000).
        The total labor cost of the three disclosure requirements imposed 
    by the Funeral Rule is $3,337,000 ($2,620,000+$217,000+$766,000). The 
    total labor cost for recordkeeping and disclosures is $3,560,000 
    ($223,000 for recordkeeping + $3,337,000 for disclosures).
        Capital or other non-labor costs: The Rule imposes minimal capital 
    costs and no current start-up costs. The Rule first took effect in 1984 
    and the revised Rule took effect in 1994, so funeral providers should 
    already have in place capital equipment to carry out tasks associated 
    with Rule compliance. Moreover, most funeral homes already have access, 
    for other business purposes, to the ordinary office equipment needed 
    for compliance, so the Rule likely imposes minimal additional capital 
    expense.
        Compliance with the Rule, however, does entail some expense to 
    funeral providers for printing and duplication of price lists. Based on 
    a rough estimate of 300 pages per year per provider for copies of the 
    various price lists, at 5 cents per page, and 22,300 providers, the 
    total cost burden associated with printing and copying is $334,500. In
    
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    addition, the estimated 2,899 providers not already providing written 
    documentation of funeral arrangements apart from the Rule will incur 
    additional printing and copying costs. Assuming that those providers 
    use the standard two-page form shown in the Compliance Guide, at 5 
    cents per page, at an average of 20 funerals per year, the added cost 
    burden would be $5,798, rounded to $5,800. Thus, estimated non-labor 
    costs are $340,300.
        The cost of training associated with Rule compliance is generally 
    included in continuing education requirements for licensing and 
    voluntary certification programs. Moreover, the FTC has provided its 
    Compliance Guide to all funeral providers at no cost, and additional 
    copies are available on the FTC web site or by mail. Accordingly, the 
    Rule imposes no additional training costs.
        2. The Used Car Rule 16 CFR Part 455 (OMB Control Number: 3084-
    0108), facilitates informed purchasing decisions by consumers by 
    requiring used car dealers to disclose information about warranty 
    coverage, if any, and the mechanical condition of used cars they offer 
    for sale.
        Estimated annual hours burden: The FTC is requesting approval for 
    an estimated burden of 2,225,000 hours relating solely to disclosure 
    requirements.\2\ This estimate is based on the number of used car 
    dealers (approximately 80,000 according to industry sources \3\), the 
    number of used cars sold by dealers annually (approximately 30,000,000, 
    according to industry data), and the time needed to fulfill the 
    information collection tasks required by the Rule.\4\ The current 
    estimated annual burden reflects a small decrease from the prior 
    estimate, attributable to a more accurate estimate of the number of 
    used cars sold by dealers.
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        \2\ The Used Car Rule does not impose any recordkeeping 
    requirements.
        \3\ Source: 1997 Used Car Market Report (``ADT Market Report''), 
    published by ADT Automotive 435 Metroplex Drive, Nashville, 
    Tennessee 37211.
        \4\ A relatively small number of dealers opt to contract with 
    outside companies to perform the various tasks associated with 
    complying with the Rule Staff assumes that outside contractors would 
    require about the same amount of time and incur similar cost as 
    dealers to perform these tasks. Accordingly, the hour and cost 
    burden totals shown, while referring to ``dealers,'' incorporate the 
    time and cost borne by outside companies in performing the tasks 
    associated with the Rule.
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        The Rule requires that used car dealers display a one-page, double-
    sided Buyers Guide in the window of each used car they offer for sale. 
    The component tasks associated with the requirement include (1) 
    ordering and stocking Buyers Guide forms, (2) entering applicable data 
    on Buyers Guides, (3) posting the Buyers Guides on vehicles, and (4) 
    making any necessary revisions in Buyers Guides.
        Dealers should need no more than an average of one hour per year to 
    obtain Buyers Guide forms, which are readily available from many 
    commercial printers or could be produced by an office word-processing 
    or desk-top publishing system. Based on a universe of 80,000 dealers, 
    the annual hours burden for producing or obtaining and stocking Buyers 
    guides is 80,000 hours.
        Copying vehicle-specific data from dealer inventories to the Buyers 
    Guide forms may take up to two minutes per vehicle if done by hand, and 
    only seconds for those dealers who have automated the process. Adding 
    the warranty information may take an additional one minute for vehicles 
    offered with a warranty, and only seconds for vehicles offered with no 
    warranty (in which case dealers merely check off the ``no warranty'' 
    box). FTC staff estimates the overall average time needed to fill out 
    Buyers Guides is 2.5 minutes per vehicle. Applied to an estimate of 
    30,000,000 used cars, this amounts to 1,250,000 hours.
        Although there will be substantial variance in the time required to 
    post the Buyers Guides on each used car, FTC staff estimates that, on 
    average, dealers will spend 1.75 minutes per vehicle to match the 
    correct Buyers Guide to the vehicle and physically attach it to one of 
    its windows. Based on 30,000,000 vehicles sold, the burden associated 
    with this task is 875,000 hours. Insofar as dealers are able to 
    integrate this process into other activities perform in their ordinary 
    course of business, this estimate likely overstates the actual burden.
        If negotiations between buyer and seller over warranty coverage 
    produce a sale on terms other than those originally entered on the 
    Buyers Guide, the dealer must revise the Guide to reflect the actual 
    terms of sale. According to the rulemaking record, bargaining over 
    warranty coverage rarely occurs. Allowing for revision in 2% of sales, 
    at two minutes per revision, staff estimates that dealers will spend 
    20,000 hours annually revising Buyers Guides.
        Estimated annual cost burden: $31,500,000, consisting of 
    $22,500,000 in labor costs and $9,000,000 in non-labor costs.
        Labor costs: Labor costs are derived by applying appropriate hourly 
    cost figures to the burden hours described above. Staff has determined 
    that all of the tasks associated with ordering forms, entering data on 
    Buyers Guides, posting Buyers Guides on vehicles, and revising them as 
    needed are typically done by clerical or low-level administrative 
    personnel. Using a clerical cost rate of $10 per hour and an estimate 
    of 2,225,000 burden hours for disclosure requirements, the total labor 
    cost burden would be approximately $22,500,000.
        Capital or other non-labor costs: The cost of the Buyers Guide form 
    itself is estimated to be 30 cents per form, so that forms for 30 
    million vehicles would cost dealers $9,000,000. In making this 
    estimate, staff conservatively assumes that all dealers will purchase 
    preprinted forms instead of producing them internally, although dealers 
    may produce them at minimal expense using current office automation 
    technology. Capital and start-up costs associated with the Rule are de 
    minimis.
        3. The Consumer Product Warranty Rule, 16 CFR part 701 (OMB Control 
    Number: 3084-0111), prevents deception by providing consumers with 
    information to assess written warranty terms. The Rule requires that 
    written warranties disclose certain material facts regarding their 
    terms and conditions.
        Estimated annual hours burden: In 1995, FTC staff estimated that 
    the required disclosures imposed an average annual burden of 8 hours on 
    each of approximately 4,241 warrantors of products. Because there have 
    been no changes to the Rule's requirements, staff has no reason to 
    believe that this estimate requires revision. Based on this assumption, 
    the total compliance burden relating to disclosures is approximately 
    34,000 hours (rounded from 33,928).\5\ Nonetheless, this estimate 
    likely overstates substantially the actual burden because most 
    warrantors would disclose the terms and conditions of their warranties 
    even in the absence of the Rule.
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        \5\ The Consumer Product Warranty Rule imposes no recordkeeping 
    requirement.
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        Estimated annual cost burden: $340,000, consisting solely of labor 
    costs.
        Labor cost: The work required to comply with the Rule (ensuring 
    that warranties are printed and included with the product) mostly 
    involves clerical or production staff. Based on an average hourly rate 
    of $10 for these employees and the total hours burden of 34,000 hours, 
    the annual labor cost is approximately $340,000.
        Capital or other non-labor cost: The Rule imposes no appreciable 
    current capital or start-up costs. Because it has been in effect since 
    1976, the vast majority of warrantors have already
    
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    modified their warranties to include information required by the Rule. 
    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.
        4. The Pre-Sale Availability Rule, 16 CFR Part 702 (OMB Control 
    Number: 3084-0112), ensures that consumers can make informed purchasing 
    decisions by requiring that the terms of written warranties for 
    consumer products be made available to consumers prior to purchase. The 
    Rule requires retailers to make warranty information available to 
    consumers and requires warrantors (i.e., manufacturers) to provide 
    retailers with materials necessary to do so. The Rule also requires 
    catalog and door-to-door sellers to make warranty information 
    available.
        The FTC is seeking approval for an estimated disclosure burden of 
    2,760,000 hours.\6\ This estimate is based on the number of large and 
    small retailers and manufacturers, according to census data, the 
    estimated scope of the compliance burden for businesses by type. FTC 
    staff first calculated burden estimates by type of business in the 
    early 1980s. Staff believes that estimates remain valid for 
    manufacturers, and that subsequent amendments to the Rule to allow more 
    flexibility have reduced the burden on retailers by approximately 50 
    percent.\7\ Approximately 6,552 large retailers and 422,100 small 
    retailers spend an annual average of 26 hours and 6 hours, 
    respectively, to comply with the Rule, for a cumulative combined total 
    of 2,702,952 hours for retailers. Approximately 146 large manufacturers 
    and 4,095 small manufacturers spend an annual average of 52 hours and 
    12 hours, respectively, for a cumulative total of 56,732 hours for 
    manufacturers. Thus, the combined cumulative total for retailers and 
    manufacturers is 2,759,684 hours, or approximately 2,760,000 hours 
    (rounded from 2,759,684 hours).
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        \6\ The Pre-Sale Availability Rule does not impose any 
    recordkeeping requirement.
        \7\ To comply with Rule 702, sellers need only maintain specimen 
    copies of the warranties provided to them by manufacturers. The Rule 
    allows seller substantial flexibility in how to maintain those 
    copies, since the Rule states only that the warranty must be made 
    readily available upon request. If the warrantor prints the warranty 
    on the product's package, for example, the retailer has no further 
    obligation since consumers can readily review the warranty by 
    looking at the package.
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        Estimated annual cost burden: $27,600,000, consisting solely of 
    labor costs.
        Labor costs: Most of Rule 702's disclosure requirements involve 
    simple clerical functions such as maintaining copies of the warranties 
    at the retail level and, at the manufacturer level, ensuring that 
    copies of warranties are provided to retailers. Assuming a clerical 
    labor cost rate of $10/hour and an estimate of 2,760,000 burden hours 
    of disclosures, that total annual labor cost burden is approximately 
    $27,600,000.
        Capital or other non-labor costs: The capital or start-up costs 
    imposed by the Rule are de minimis. because the Rule has been in effect 
    since 1976, and the amended Rule since 1987, the vast majority of 
    retailers and warrantors already have developed systems to provide the 
    information the Rule requires. Compliance by retailers typically 
    entails simply filing warranties in binders and posting an inexpensive 
    sign indicating warranty availability.\8\ Manufacturer compliance 
    entails providing retailers with a copy of the warranties included with 
    their products.
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        \8\ Although some retailers may choose to display a more 
    elaborate or expensive sign, that is not required by the Rule.
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        5. The Informal Dispute Settlement Procedures Rule, 16 CFR Part 703 
    (OMB Control Number: 3084-0113), helps to ensure that consumers are 
    fully informed regarding informal dispute settlement procedures in 
    product warranties. The Rule imposes certain requirements when a 
    warrantor requires, as part of a written warranty, that consumers first 
    use an informal dispute settlement mechanism (IDSM) to seek resolution 
    of a warranty dispute before pursuant remedies in court. The Rule 
    requires that affected warrantors disclose certain information to 
    consumers. It also requires that warrantors, through IDSMs, retain: (1) 
    individual records for each dispute; (2) indexes that categorize 
    disputes by product model and show the extent to which the warrantor 
    has abided by decision of the resolution process; and (3) statistical 
    summaries that classify disputes according to various status and final 
    disposition categories. Affected entities must conduct an annual audit 
    of their dispute resolution procedures and report to the FTC.
        Estimated annual hours burden: The FTC is requesting approval for 
    an estimated burden of 4,333 recordkeeping hours and 1,625 disclosure 
    hours, for a total burden estimate of approximately 6,000 hours. This 
    estimate is based on the number of warranty disputes handled by IDSMs 
    and the average time needed to fulfill the information collection tasks 
    required by the Rule.
        Recordkeeping: The Rule requires that IDSMs maintain individual 
    case files, update indexes, complete semi-annual statistical summaries, 
    and submit an annual audit report to the FTC. Since maintenance of 
    individual case records is necessary in the ordinary course of 
    business, the Rule imposes little additional recordkeeping burden. FTC 
    staff estimates that retaining additional information that would not 
    otherwise be kept adds a burden of 30 minutes per case. Staff estimates 
    also that IDSMs require an additional 10 minutes per case for 
    compilation of the indexes, statistical summaries, and annual audit 
    required by the Rule, resulting in a total recordkeeping requirement of 
    40 minutes per case. Finally, staff estimates that the two IDSMs 
    affected by the Rule handle, combined, about 6,500 covered disputes 
    annually. Thus, the total recordkeeping burden associated with the Rule 
    is approximately 4,333 hours.
        Disclosure: The Rules requires that affected warrantors disclose 
    information about the dispute settlement mechanism in the written 
    warranty, and that IDSMs disclose certain information upon request. The 
    incremental cost of a warrantor's required disclosure is negligible. 
    IDSMs must provide certain information, such as their annual audits, to 
    anyone who requests it. In addition, on request, IDSMs must also 
    provide consumers who have had a dispute before them with a copy of 
    records relating to their disputes. FTC staff estimates that the 
    average hour burden of copying and producing this information is 
    approximately 15 minutes for each dispute handled by an IDSM. Based on 
    an estimate of 6,500 disputes annually, the hour burden associated with 
    copying and providing these disclosures is 1,625 hours.
        Estimated annual cost burden: $303,000 (rounded), consisting of 
    $103,000 in labor costs and $200,000 in non-labor costs.
        Labor costs: Assuming that IDSMs would use skilled clerical 
    personnel, at an hourly rate of $20, to maintain the records required 
    by the Rule, the labor cost of the 4,333 recordkeeping burden hours is 
    approximately $86,660. Assuming that IDSMs would use less skilled 
    labor, at an hourly rate of $10, to reproduce records, the labor costs 
    of the 1,625 hours disclosure burden hours is approximately $16,250. 
    The combined total labor cost for recordkeeping and disclosures is 
    $102,910, rounded to $103,000.
        Capital or other non-labor costs: The Rule imposes no appreciable 
    current capital or start-up costs. Because it has been in effect since 
    1976, the vast majority of warrantors have already
    
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    developed systems to retain the records and provide the disclosures 
    required by the Rule. Rule compliance does not require the use of any 
    capital goods, other than ordinary office equipment, to which providers 
    would already have access.
        The only additional cost imposed on IDSMs operating under the Rule 
    that would not be incurred for other IDSMs is the annual audit 
    requirement. One of the two IDSMs currently operating under the Rule 
    estimates the total annual costs of this requirement to be less than 
    $100,000. Since there are two IDSMs operating under the Rule, the total 
    non-labor cost imposed by them is an estimated $200,000. This total 
    includes copying costs of roughly $20,000, which is based on estimated 
    copying costs of 5 cents per page and several conservative assumptions 
    or estimates. Staff estimates that the ``average'' dispute-related file 
    is about 25 pages long and that a typical annual audit file is about 
    200 pages in length. For purposes of estimating copying costs, staff 
    conservatively assumes that every consumer complainant requests a copy 
    of the file relating to his or her dispute. Staff also assumes that, 
    for 1,000 of the estimated 6,500 disputes each year, consumers request 
    copies of warrantors' annual audit reports (although, based on requests 
    for audit reports made directly to the FTC, the indications are that 
    considerably less requests are actually made). Thus, the estimated 
    total annual copying costs for average-sized files would be 
    approximately $8,125 (25 pages/file  x .05  x  6,500 requests) and 
    $10,000 for copies of annual audits (200 pages/audit report  x .05  x  
    1,000 requests), rounded to a total of $20,000.
        Combined with estimated annual labor cost of $103,000, total 
    estimated annual cost burden is $303,000 ($200,000 + $103,000).
    Debra A. Valentine,
    General Counsel.
    [FR Doc. 98-30604 Filed 11-13-98; 8:45 am]
    BILLING CODE 6750-01-M
    
    
    

Document Information

Published:
11/16/1998
Department:
Federal Trade Commission
Entry Type:
Notice
Action:
Notice.
Document Number:
98-30604
Dates:
Comments must be submitted on or before January 15, 1999.
Pages:
63731-63735 (5 pages)
PDF File:
98-30604.pdf