[Federal Register Volume 64, Number 119 (Tuesday, June 22, 1999)]
[Notices]
[Pages 33291-33292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15839]
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FEDERAL TRADE COMMISSION
[File No. 9723075]
Tiger Direct, Inc.; Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint that accompanies the consent agreement and the terms of the
consent order--embodied in the consent agreement--that would settle
these allegations.
DATES: Comments must be received on or before August 23, 1999.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 600 Pennsylvania Avenue, NW, Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Andrew Caverly or Colleen Lynch,
Boston Regional Office, Federal Trade Commission, 101 Merrimac Street,
Suite 810, Boston, MA 02114-4719, (617) 424-5960.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 2.34 of
the Commission's Rules of Practice, 16 CFR 2.34, notice is hereby given
that the above-captioned consent agreement containing a consent order
to cease and desist, having been filed with and accepted, subject to
final approval, by the Commission, has been placed on the public record
for a period of sixty (60) days. The following Analysis to Aid Public
Comment describes the terms of the consent agreement, and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC Home Page
(for June 10th, 1999), on the World Wide Web, at ``http://www.ftc.gov/
os/actions97.htm.'' A paper copy can be obtained from the FTC Public
Reference Room, Room H-130, 600 Pennsylvania Avenue, NW, Washington, DC
20580, either in person by calling (202) 326-3627.
Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Avenue, NW,
Washington, DC 20580. Two paper copies of each comment should be filed,
and should be accompanied, if possible, by a 3\1/2\ inch diskette
containing an electronic copy of the comment. Such comments or views
will be considered by the Commission and will be available for
inspection and copying at its principal office in accordance with
Section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR
4.9(b)(6)(ii).
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, an agreement containing a consent order from Tiger Direct,
Inc. (``Tiger Direct''), a mail order retailer of computer products.
The proposed consent order has been placed on the public record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and the comments received and will decide whether it should
withdraw from the agreement or make final the agreement's proposed
order.
The Commission's complaint alleges that Tiger Direct violated
Section 5 of the Federal Trade Commission Act (``FTC Act''), 15 U.S.C.
45(a)(1), by deceptively advertising its on-site warranty service for
Tiger-brand computer systems. Additionally, the complaint alleges that
Tiger Direct has violated the Magnuson-Moss Warranty Act (``Warranty
Act''), 15 U.S.C. 2301 et seq., and two Rules promulgated thereunder:
the Rule concerning the Disclosure of Written Consumer Product Warranty
Terms and Conditions (``Disclosure Rule''), 16 CFR 701; and the Rule
concerning the Pre-Sale Availability of Written Warranty Terms (``Pre-
Sale Availability Rule''), 16 CFR 702. Under Section 110(b) of the
Warranty Act, 15 U.S.C. Sec. 2310(b), violations of the Warranty Act or
its Rules are also violations of Section 5 of the FTC Act.
First, the complaint alleges that Tiger Direct violated Section 5
of the FTC Act by misrepresenting that it would provide on-site
warranty service to purchasers of Tiger-brand computer systems when
notified that the system or any of its parts was defective or had
malfunctioned and that it would provide such service within a
reasonable period of time after being notified of a problem.
Second, the complaint alleges that Tiger Direct violated the Pre-
Sale Availability Rule by failing to disclose material warranty terms
or otherwise comply with the Rule. The complaint also alleges that
Tiger Direct failed to comply with the requirements of the Disclosure
Rule that certain language be
[[Page 33292]]
included in written warranties including: what the warrantor will not
pay for or provide, where necessary for clarification; a step-by-step
explanation of the procedure that the consumer should follow in order
to obtain performance of any warranty obligation; a notice that its
warranty exclusion of incidental and consequential damages does not
apply to consumers in states that prohibit such exclusions; and that a
consumer may have other rights that vary from state to state. In
addition, the complaint alleges that Tiger Direct violated the Warranty
Act by failing to clearly and conspicuously designate its written
warranty as ``full'' or ``limited'' and by disclaiming all implied
warranties, which the Warranty Act prohibits.
The proposed consent order contains provisions designed to remedy
the violations charged and to prevent Tiger Direct from engaging in
similar deceptive acts and practices in the future.
Part I of the proposed order prohibits Tiger Direct from
representing that it provides on-site service unless it discloses all
limitations and conditions that apply to obtaining on-site service
clearly, prominently and in close proximity to the on-site service
representation.
Part II of the proposed order provides that Tiger Direct shall
provide warranty service within a reasonable period of time after
receiving notice from a consumer of a problem. The order defines a
reasonable period of time as the time period specified in respondent's
promotional materials and advertisements, or if no time period is
specified in respondent's promotional materials and advertisements, a
period no longer than thirty (30) days after respondent receives notice
from a consumer of a computer problem.
Part III of the proposed order contains provisions designed to
remedy respondent's violations of the Warranty Act, the Disclosure Rule
and the Pre-Sale Availability Rule. It prohibits respondent from
failing to make the text of a warranty readily available; failing to
disclose a statement of what the warrantor will not pay for or provide;
failing to disclose a step-by-step explanation of the procedure the
consumer should follow to obtain warranty service; failing to make the
necessary disclosures regarding a consumer's rights under state law;
failing to properly designate its warranty as full or limited; and
disclaiming any implied warranty except as permitted.
Parts IV and V of the proposed order require Tiger Direct to
distribute copies of the order and written instructions regarding its
responsibilities and duties under the order and the Warranty Act,
including the Disclosure Rule and the Pre-Sale Availability Rule, to
certain current and future personnel. Part VI of the proposed order
requires Tiger Direct to maintain copies of all such written
instructions, as well as copies of warranties and advertising
exemplars. Part VII of the proposed order requires Tiger Direct to
notify the Commission of any changes in its corporate structure that
might affect compliance with the order. Part VIII of the order requires
Tiger Direct to file with the Commission one or more reports detailing
compliance with the order.
Lastly, Part IX of the proposed order provides for termination of
the order after twenty (20) years under certain circumstances.
The purpose of this analysis is to facilitate public comment on the
proposed order, and it is not intended to constitute an official
interpretation of the agreement and proposed order, or to modify any of
their terms.
By Direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 99-15839 Filed 6-21-99; 8:45 am]
BILLING CODE 6750-01-M
