This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

1329 

Vol. 80, No. 6 

Friday, January 9, 2015 

1 Door-to-door sellers must provide buyers with a 

completed cancellation form, in duplicate, 

captioned either Notice of Right to Cancel or Notice 

of Cancellation, in accordance with the 

requirements and language provided in 16 CFR 

429.1(b). Duplicate copies are required so that 

consumers can return one notice and retain the 

other should they need to effect cancellation. Oral 

notice is required pursuant to 16 CFR 429.1(e). 

2 16 CFR 429.1(a). 

3Trade Regulation Rule Concerning Cooling-Off 

Period for Sales Made at Homes or at Certain Other 

Locations, Request for Public Comment, 74 FR 

18170 (April 21, 2009). The Commission also 

conducted reviews in 1998 and 1995. Rule on 

Cooling-Off Period for Door-to-Door Sales, 53 FR 

45455 (Nov. 10, 1988); Rule Concerning Cooling-Off 

Period for Sales Made at Homes or at Certain Other 

Locations, 60 FR 54180 (Oct. 20, 1995). In the 1995 

proceeding, the Commission determined, among 

other issues, that the Rule should continue to apply 

to sales occurring in places other than a consumer’s 

home. Id. at 54183. 

4Trade Regulation Rule Concerning Cooling-Off 

Period for Sales Made at Homes or at Certain Other 

Locations, Proposed Rule Amendment; Request for 

Public Comment, 78 FR 3855 (Jan. 17, 2013). 

5 Id. 

6 Id. at 3860. 

7Comments are available on the Commission’s 

Web site at: www.ftc.gov. 

FEDERAL TRADE COMMISSION 

16 CFR Part 429 

RIN 3084–AB10 

Trade Regulation Rule Concerning 

Cooling-Off Period for Sales Made at 

Homes or at Certain Other Locations 

AGENCY: Federal Trade Commission. 

ACTION: Final rule. 

SUMMARY: The Federal Trade 

Commission amends the Rule 

Concerning Cooling-Off Period for Sales 

Made at Homes or at Certain Other 

Locations (‘‘Cooling-Off Rule’’ or 

‘‘Rule’’). The final Rule adopts with 

modifications the Commission’s 

proposal to increase the exclusionary 

limit for all door-to-door sales. Under 

the final Rule, the revised definition of 

‘‘door-to-door sale’’ distinguishes 

between sales at a buyer’s residence and 

those at other locations. First, the 

revised definition retains coverage for 

sales made at a buyer’s residence that 

have a purchase price of $25 or more. 

Second, the revised definition covers 

sales at other locations that have a 

purchase price of $130 or more. 

DATES: This rule is effective on March 

13, 2015. 

ADDRESSES: Requests for copies of this 

document are available on the 

Commission’s Web site, www.ftc.gov. 

FOR FURTHER INFORMATION CONTACT: 

Sana Coleman Chriss, Attorney, (404) 

656–1364, Federal Trade Commission, 

Southeast Region, 225 Peachtree Street 

NE., Suite 1500, Atlanta, Georgia 30303. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Cooling-Off Rule Summary 

The Cooling-Off Rule is a trade 

regulation rule that was promulgated by 

the Commission in 1972 to address 

unfair and deceptive practices in sales 

conducted at locations other than the 

place of business of the seller (‘‘door-todoor sales’’). In addition to sales at 

consumers’ homes, door-to-door sales 

include sales at facilities rented on a 

temporary or short term basis, such as 

hotel or motel rooms, convention 

centers, fairgrounds and restaurants; or 

sales at the buyer’s workplace or in 

dormitory lounges. The Rule requires 

door-to-door sellers to provide 

consumers with written and oral notice 

of a buyer’s right to unilaterally rescind 

a contract within three business days 

from the date of the transaction.1

Additionally, such sellers must provide 

buyers with a completed receipt, or a 

copy of the sales contract, containing a 

summary notice informing buyers of the 

right to cancel the transaction.2

B. Procedural Background 

In 2009, the Commission initiated a 

regulatory review of the Cooling-Off 

Rule, as it does periodically with all of 

its rules and guides, to determine 

whether the Rule should be retained, 

modified or rescinded.3 To make this 

determination, the Commission sought 

comment on the economic impact of the 

Rule, the need for the Rule, any possible 

conflicts between the Rule and state, 

local, or other federal laws or 

regulations, and the effect on the Rule 

of any technological, economic, or other 

industry changes. Finding that the Rule 

continues to serve a valuable purpose in 

protecting consumers, the Commission 

retained the Rule and concluded its 

regulatory review.4 At the same time, 

the Commission sought public comment 

on a proposed increase from $25 to $130 

in the exclusionary limit set forth in the 

Definitions section of the Rule.5 Under 

the proposed revision, the Rule’s 

definition would have covered door-todoor sales with a purchase price of $130 

or more. 

In seeking comment, the Commission 

posed six questions: (1) Whether the 

Rule’s $25 exclusionary limit should be 

increased to account for inflation since 

the Rule was first promulgated in 1972 

and to exempt from the Rule’s coverage 

sales, leases, or rentals of consumer 

goods or services with a purchase price 

of less than $130, whether under single 

or multiple contracts; (2) what types of 

transactions would become exempt from 

the Rule as a consequence of the 

increase; (3) whether transactions 

intended to be covered by the Rule 

when originally adopted in 1972 would 

become exempt as a result of the 

increase; (4) how the increase would 

impact the benefits the Rule currently 

provides to consumers and commerce; 

(5) how the increase would impact the 

burdens or costs the Rule currently 

imposes on sellers subject to the Rule’s 

requirements; and (6) whether the 

increase would impact the enforcement 

of state laws and municipal 

ordinances.6

After careful consideration of the 

record, the Commission has decided to 

retain the exclusionary limit of $25 for 

door-to-door sales made at a buyer’s 

residence, but amend the Rule to 

increase from $25 to $130 the 

exclusionary limit applicable to all 

other door-to-door sales made at a place 

other than a buyer’s residence. 

II. Basis for Final Rule and Analysis of 

Public Comment 

The Commission received a total of 33 

public comments from a broad range of 

groups and individuals.7 Commenters 

included representatives from Better 

Business Bureaus (‘‘BBBs’’); the 

California Consumer Affairs Association 

(‘‘CCAA’’), which is a statewide 

association of government agencies and 

nonprofit organizations; the Attorney 

General of the Commonwealth of 

Massachusetts (the ‘‘Massachusetts 

AG’’); the Direct Selling Association 

(‘‘DSA’’), which is a trade association of 


rljohnson on DSK3VPTVN1PROD with RULES
1330 Federal Register / Vol. 80, No. 6 / Friday, January 9, 2015 / Rules and Regulations 

8See e.g., Massachusetts AG at 1(urging the FTC 

to maintain the exclusionary limit at $25 and 

stating that ‘‘The Commonwealth recognizes that 

$25 is worth less, in real terms, than it was in 1972, 

when 16 CFR part 429 was enacted. Nevertheless, 

the Commonwealth does not believe that $25 is an 

insignificant amount, especially in the door-to-door 

context, where borrowers who may never have 

expressed an interest in a product are confronted 

in their own home by a salesman who attempts to 

convince them to purchase a product.’’) (emphasis 

added); Halbe at 1 (describing pushy, aggressive 

salesmen roving through her neighborhood); BBB of 

Southern Colorado at 1 (inferring that consumers 

are threatened or deceived into signing contracts to 

get sales persons to leave consumers’ homes); BBB 

of Utah at 1; BBB of North Alabama at 1 (stating 

that ‘‘Door to door sales targets [sic] every 

homeowner who opens their door. Without a low 

threshold you will see more consumers loose [sic] 

more money to the crooks who walk through the 

neighborhoods.’’); Ellenbecker at 1(expressing 

concern about deceptive travelling salesmen). 

9Massachusetts AG at 1. 

10BBB of North Alabama at 1; Halbe at 1; 

Ellenbecker at 1. 

11BBB of Southern Colorado at 1; BBB of Utah 

at 1. 

12Barrett at 1; Bosley at 1; Brooks at 2–3; 

Fitzpatrick (for Pyramid Scheme Alert) at 1; Taylor 

(for the Consumer Awareness Institute) at 1. See 

also Christian (stating that the cooling-off period for 

distributors should be one month instead of three 

days). According to DSA, a start-up kit usually 

includes items such as samples, catalogs, order 

forms and other tools that help the individual begin 

selling. ‘‘The Difference Between Legitimate Direct 

Selling Companies and Illegal Pyramid Schemes,’’ 

Direct Selling Association, available at http://

www.dsa.org/ethics/legitimatecompanies.pdf. 

13Brooks at 2 (citing information found at 

http://www.dsa/org/ethics/

legtimatecompanies.pdf). 

14 Id. at 2–3. 

15 DSA at 2; Rothacker at 1. In addition, two other 

commenters provided brief statements in support of 

an inflationary adjustment of more than the 

proposed $130. Schafer at 1 (stating ‘‘maybe $500 

or $1,000 should be the threshold if it needs to 

stay’’); Kellam at 1 (stating that ‘‘For further 

consideration, the limit should be increased to $200 

to allow for inflation in the next two to five years.’’). 

16Cooling-Off Period for Door-to-Door Sales, 

Trade Regulations Rule and Statement of Basis and 

Purpose, 37 FR 22933, 22937 (Oct. 26, 1972). 

17 DSA at 2. 

18See 16 CFR 429.0(a); 429.0(b) (defining 

‘‘consumer goods or services’’ as ‘‘goods or services 

purchased, leased, or rented primarily for personal, 

family, or household purposes, including courses of 

instruction or training regardless of the purpose for 

which they are taken’’). 

manufacturers and distributors that 

directly sell goods and services to 

consumers primarily in the home; and 

consumer advocates. The comments 

discussed three issues: (1) The 

exclusionary limit; (2) the Rule’s effect 

on state laws; and (3) the Rule’s receipt 

requirement and sellers’ guarantee and 

return policies. 

A. The Exclusionary Limit 

The majority of commenters stated 

that the $25 exclusionary amount 

should not be increased. The most 

uniform concern raised by commenters 

opposing the increase was the risk of 

unfair or deceptive sales practices 

occurring within consumers’ homes.8

For example, comments from the 

Massachusetts AG indicated that $25 is 

not an insignificant amount, especially 

in the residential context, where 

borrowers who may never have 

expressed an interest in a product are 

confronted in their own home by a 

seller who attempts to convince them to 

purchase a product.9 Similarly, other 

commenters discussed aggressive 

traveling sellers in consumers’ 

neighborhoods seeking to deceptively 

solicit consumers within their homes.10

A few commenters suggested that some 

consumers feel pressured to enter into 

contracts with door-to-door salesmen 

solely to get the salesmen to leave their 

homes.11

Several commenters expressed 

concern that increasing the exclusionary 

amount could exempt door-to-door 

sellers of multilevel marketing (‘‘MLM’’) 

distribution opportunities and sales of 

associated ‘‘start-up kits’’ to prospective 

distributors.12 One commenter stated 

that these start-up kits typically cost $99 

and that raising the threshold amount 

would exempt sale of the kits from the 

Rule.13 The commenter asserted that 

start-up kit sales should be covered by 

the Rule, because the sales cause these 

individuals to become committed to the 

MLM opportunity when, in reality, most 

of these individuals are likely to lose 

their investments.14

A few commenters supported the 

proposed increase. DSA, for example, 

stated that increasing the exclusionary 

limit to $130 would be appropriate, 

while also noting the continuing value 

of the Rule.15 DSA stated that increasing 

the exclusionary limit would continue 

to provide consumers with the right to 

cancel high-dollar value purchases 

within three days. DSA also stated that 

the proposed increase would reduce the 

burden on sellers of lower-cost items 

because such sellers would not be 

required to provide duplicate receipts 

and oral disclosures. 

The Commission concludes that the 

record supports retaining the $25 

exclusionary limit for door-to-door sales 

made within consumers’ homes. The 

record reflects significant concern 

among the majority of commenters 

about high-pressure sales tactics and 

deception occurring during in-home 

solicitations. These concerns echo many 

of the same in-home sales concerns 

expressed by the Commission when it 

promulgated the Rule in 1972. The 

unfair and deceptive sales practices 

identified at that time included: (1) 

Deception by salesmen in getting inside 

the door, (2) high pressure sales tactics, 

(3) misrepresentation as to the quality, 

price, or characteristics of the product, 

(4) high prices for low-quality 

merchandise, and (5) the nuisance 

created by the visit to the home by the 

uninvited salesmen.16 The Commission 

concludes that retaining the $25 

exclusionary limit for in-home sales is 

warranted to prevent the types of unfair 

and deceptive practices that gave rise to 

the Rule, and that an inflationary 

adjustment with respect to in-home 

sales would leave consumers without 

adequate protection under the Rule. 

Accordingly, the Commission is 

retaining the $25 exclusionary limit for 

such sales. 

The Commission, however, has 

determined to amend the Rule to 

increase the limit to $130 for door-todoor sales made away from consumers’ 

residences. The record does not reflect 

the same level of concerns about 

problematic practices when sales are 

made at other locations. In addition, the 

Commission is cognizant of costs of 

complying with the Rule. As stated in 

the record, because of price increases 

over time, more items are now covered 

by the Rule.17 This results in 

compliance burdens for sellers of lower 

cost goods. For example, while the Rule 

does not exempt souvenir vendors and 

sellers of perishable food at farmers’ 

markets, increasing the threshold 

amount for sales at other locations could 

relieve these types of vendors from 

providing cancellation notices in 

connection with lower-dollar sales. The 

Commission concludes that increasing 

the exclusionary limit to $130 for sales 

made away from a consumer’s residence 

will reduce compliance burdens for 

sellers of lower cost goods, while 

continuing to provide consumers with 

the Rule’s protections for higher-dollar 

value purchases. 

With respect to transactions involving 

MLM start-up kits, the Commission 

notes that whether such transactions are 

covered by the Rule is a fact-specific 

inquiry that depends on whether the 

particular transaction is a ‘‘sale, lease or 

rental of consumer goods or services.’’ 18

To the extent such a transaction would 

be covered under the final Rule, the 

location of the transaction would govern 

whether the $25 exclusionary amount or 

the $130 exclusionary amount would 

apply. 

B. The Rule’s Effect on State Laws 

Some commenters expressed concern 

about how the proposed increase would 

affect state cooling-off laws. DSA 

commented that the increase in the 

exclusionary limit would not impact the 

enforcement of state laws and municipal 


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Federal Register / Vol. 80, No. 6 / Friday, January 9, 2015 / Rules and Regulations 1331 

19 DSA at 3. 

20CCAA at 1. 

21 DSA at 3. 

22These consumer populations may be less likely 

to have affordable access to photocopiers and 

electronic devices. The duplicate receipt and notice 

requirement avoids imposing additional expense on 

consumers who would need to access copier 

machines and other electronic devices in order to 

preserve a record of their right to cancel. See Trade 

Regulation Rule Concerning Cooling-Off Period for 

Sales Made at Homes or at Certain Other Locations, 

Proposed Rule Amendment; Request for Public 

Comment, 78 FR 3855, 3862 (Jan. 17, 2013). 

23 15 U.S.C. 7001–7006. 

24See 16 CFR 429.0(a)(4). 

25 DSA at 3. 

26 Id. 27 5 U.S.C. 605(b). 

ordinances.19 CCAA offered a different 

view, stating that if the Rule raises the 

exclusionary amount to $130, 

unscrupulous door-to-door sellers could 

challenge a state cooling-off rule law 

and similar statutes, although CCAA did 

not discuss the likely basis for any such 

challenges.20

The Commission finds that raising the 

threshold limit for door-to-door sales 

made away from a consumer’s home 

should not adversely impact state laws. 

Section 429.2 of the Rule, which 

remains unchanged, provides that state 

laws are preempted only to the extent 

that such laws are ‘‘directly 

inconsistent’’ with the Rule. State laws 

that have either lower exclusionary 

limits of $25 or less, or no exclusionary 

limit at all, are not ‘‘directly 

inconsistent’’ with the Rule, and 

therefore would not be preempted on 

this ground. It is possible for sellers to 

comply with the Rule when they make 

door-to-door sales of $130 or more away 

from a consumer’s home, and to also 

comply with state laws governing sales 

of smaller amounts. 

C. Receipt Requirement and Sellers’ 

Guarantee and Return Policies 

DSA repeated a comment made 

during the 2009 rule review about the 

requirement that sellers provide 

consumers with two copies of the sales 

receipt and the mandated cancellation 

notice. DSA states that providing 

duplicate receipts imposes a burden on 

door-to-door sellers that is no longer 

necessary because orders and 

cancellations are frequently made over 

the telephone and the Internet.21 The 

Commission disagrees. The duplicate 

receipt and notice required by the Rule 

is beneficial to consumers, and based on 

the comments provided, may even have 

greater significance for consumer 

populations that may be targeted by 

door-to-door sales, such as the elderly.22

Further, the Commission notes that the 

Rule does not expressly address 

electronic methods by which a seller 

might comply with the Rule’s duplicate 

receipt and notice requirement. Whether 

and how other laws, such as the 

Electronic Signatures in Global and 

National Commerce Act (‘‘ESIGN’’),23

may provide electronic means that 

could be used to meet the duplicate 

receipt and notice requirement, or other 

Rule requirements, would depend on a 

case-by-case analysis of the specific 

legal and factual circumstances. Finally, 

the Rule does not apply if a transaction 

is conducted and consummated entirely 

by mail or telephone—and the 

Commission interprets the Rule to 

similarly not apply to transactions 

conducted and consummated entirely 

over the Internet—as long as there is not 

any other in person contact between the 

buyer and seller or its representative 

prior to the delivery of goods or the 

performance of services.24

DSA also repeated its 2009 comment 

that providing notice of both CoolingOff Rule cancellation rights and a 

company’s cancellation and return 

policy can be confusing to consumers 

when they provide for different 

cancellation, guarantee, or return 

policies.25 DSA reiterated its 

recommendation that the Commission 

permit companies to substitute the 

Rule’s language with their own 

guarantee or return policies, which 

policies, according to DSA, often 

provide consumers with greater 

protections than the Rule.26 The 

Commission is not adopting DSA’s 

recommendation because any potential 

confusion that consumers face with 

multiple options for cancellation is 

counterbalanced by the need to have a 

federally enforceable minimum amount 

of time for which consumers may cancel 

door-to-door sales. Without a federally 

required minimum, consumers’ 

cancellation rights could be subjected to 

negotiation in high-pressure, deceptive 

door-to-door sales, which could result 

in more onerous cancellation and other 

requirements for consumers. 

III. Regulatory Flexibility Act 

Certification and Regulatory Analysis 

The final amendment to the 

Commission’s Cooling-Off Rule 

announced in this notice will increase 

from $25 to $130 the exclusionary limit 

for door-to-door sales made away from 

a buyer’s residence. Given concerns 

raised by commenters about problematic 

practices occurring within consumers’ 

homes, the final amendment will not 

increase the exclusionary limit for sales 

made at a buyer’s residence. The final 

amendment will reduce compliance 

burdens for regulated sellers who will 

no longer be required to provide Notices 

of Cancellation for door-to-door sales 

made away from a buyer’s residence, 

unless the purchase price of the sale is 

$130 or more. Moreover, the final 

amendment will not impose upon any 

regulated sellers new notice or other 

requirements. As a result, the 

Commission believes the economic 

impact of the final amendment will be 

minimal and that it will not have an 

adverse economic impact on regulated 

sellers or consumers. As reflected in this 

proceeding and in the Commission’s 

experience, door-to-door sellers are 

often small entities. Because the final 

amendment reduces compliance 

burdens, door-to-door sellers who are 

also small entities should not face any 

significant economic hardship as a 

result of the final amendment. At most, 

a small entity may face costs associated 

with training and educating sellers 

about the amendment to the Rule, but 

these costs would likely be modest and 

outweighed by the reduced burden for 

those entities that will no longer need 

to provide Notices of Cancellation for 

certain sales. Accordingly, the 

Commission certifies that the final 

amendment will not have a significant 

economic impact on a substantial 

number of small entities as defined in 

the Regulatory Flexibility Act, 5 U.S.C. 

601–612. The final amendment, 

therefore, is exempt from the final 

regulatory flexibility analysis 

requirements of section 604, 5 U.S.C. 

604.27 Further, this document serves as 

notice to the Chief Counsel for 

Advocacy of the Small Business 

Administration of the agency’s 

certification of no significant impact. 

For similar reasons, a regulatory 

analysis under Section 22 of the FTC 

Act is not required. See 15 U.S.C. 57b– 

3(a)(1). The Commission believes the 

amendments will have no significant 

economic or other impact on the 

economy, prices, or regulated entities or 

consumers. 

IV. Paperwork Reduction Act 

The Paperwork Reduction Act 

(‘‘PRA’’), 44 U.S.C. 3501 et seq., requires 

government agencies, before 

promulgating rules or other regulations 

that require ‘‘collections of information’’ 

(i.e., recordkeeping, reporting, or thirdparty disclosure requirements), to obtain 

approval from the Office of Management 

and Budget (‘‘OMB’’). The amendment 

will not impose collection requirements, 

so OMB approval is unnecessary. 

V. Conclusion 

For the reasons described above, the 

Commission has determined to increase 


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1332 Federal Register / Vol. 80, No. 6 / Friday, January 9, 2015 / Rules and Regulations 

1Trade Regulation Rule Concerning Cooling-Off 

Period for Sales Made at Homes or at Certain Other 

Locations, 16 CFR part 429. 

2 Id.; see also, Cooling-Off Period for Door-to-Door 

Sales, Trade Regulation Rule and Statement of Its 

Basis and Purpose, 37 FR 22933, 22937 (Oct. 26, 

1972). 

3 16 CFR 429.0(a) (definition of ‘‘Door-to-Door 

Sale’’). 

4See Cooling-Off Period for Door to Door Sales, 

Trade Regulation Rule and Statement of Its Basis 

and Purpose, 37 FR at 22937 (‘‘The complaints of 

consumers regarding door-to-door salesmen fall 

within five basic headings. These are: (1) Deception 

by salesmen in getting inside the door; (2) high 

pressure sales tactics; (3) misrepresentation as to 

the quality, price, or characteristics of the product; 

(4) high prices for low-quality merchandise; and (5) 

the nuisance created by the visit to the home by the 

uninvited salesmen’’). 

5 16 CFR 429.1(a). 

6 16 CFR 429.1(a), (b), (e). 

7The Commission initiated the regulatory review 

in 2009, seeking public comment to determine 

whether the rule should be retained, modified, or 

rescinded. Trade Regulation Rule Concerning 

Cooling-Off Period for Sales Made at Homes or at 

Certain Other Locations, Request for Public 

Comment, 74 FR 18170 (Apr. 21, 2009). After the 

Commission decided to retain the Rule, it sought 

public comment on a proposal to an increase of the 

exclusionary limit. Trade Regulation Rule 

Concerning Cooling-Off Period for Sales Made at 

Homes or at Certain Other Locations, Proposed Rule 

Amendment, Request for Public Comment, 78 FR 

3855 (Jan. 17, 2013). 

8See 78 FR at 3869, n.69 (‘‘The average value of 

the CPI–U for 2010 was 218.056, while the average 

value for 1972 was 41.8. . . . Dividing 218.056 by 

41.8 gives a value of 5.217 and multiplying this 

figure by $25 gives a value of $130.43. Rounding 

down to $130 yields the proposed new minimum 

dollar amount’’). 

9The Direct Selling Association (‘‘DSA’’) and 

Mike Shaw Auto Group, as well as two individual 

commenters supported an increase in the 

exclusionary limit. DSA stated that, because of 

inflation, the Rule now covers lower cost items that 

it was not originally intended to cover. It also cited 

concerns regarding the compliance costs for sellers 

of lower cost goods. DSA Comment at 2–3. Mike 

Shaw Auto Group suggested that the amount be 

rounded up to the nearest $50. Mike Shaw Auto 

Group Comment at 1. Another commenter 

suggested that the amount be raised to $200 to 

account for future inflation, while the remaining 

commenter expressed support for the FTC’s 

proposed increase. BELO KELLAM [sic] Comment 

at 1, Susan Rothacker Comment at 1. 

10Some commenters raised general concerns 

about deceptive practices. See, e.g., Frances Goff 

Comment at 1 (opposed to raising the minimum 

based on the persistence of dishonest sales tactics). 

Others raised more specific concerns, such as 

sellers who target senior citizens, or predatory sales 

practices in multilevel marketing. Six commenters 

raised concerns with multilevel marketing 

organizations (‘‘MLMs’’), whose start-up kits can 

easily cost below the FTC’s proposed threshold. For 

example, Stacie Bosley, an economist and assistant 

the Rule’s exclusionary amount with 

respect to door-to-door sales that are 

made away from a buyer’s residence. 

The Cooling-Off Rule will continue to 

apply to these types of transactions, 

however, the exclusionary limit will be 

increased to $130. Increasing the 

exclusionary limit for these types of 

sales should eliminate compliance 

burdens for various types of vendors, 

who typically engage in low-dollar 

amount transactions, but not highpressure sales tactics that are designed 

to keep consumers’ captive. At the same 

time, the record supports leaving the 

$25 exclusionary limit in place for doorto-door sales made within consumers’ 

homes. 

List of Subjects in 16 CFR Part 429 

Sales made at homes or at certain 

other locations; Trade practices. 

For the reasons stated in the 

preamble, the Federal Trade 

Commission amends 16 CFR part 429 as 

follows: 

PART 429—RULE CONCERNING 

COOLING-OFF PERIOD FOR SALES 

MADE AT HOMES AND OTHER 

LOCATIONS 

■ 1. The authority citation for part 429 

continues to read as follows: 

Authority: Sections 1–23, Federal Trade 

Commission Act, 15 U.S.C. 41–58. 

■ 2. Amend § 429.0, by revising 

paragraph (a) introductory text to read 

as follows: 

§ 429.0 Definitions. 

* * * * * 

(a) Door-to-Door Sale—A sale, lease, 

or rental of consumer goods or services 

in which the seller or his representative 

personally solicits the sale, including 

those in response to or following an 

invitation by the buyer, and the buyer’s 

agreement or offer to purchase is made 

at a place other than the place of 

business of the seller (e.g., sales at the 

buyer’s residence or at facilities rented 

on a temporary or short-term basis, such 

as hotel or motel rooms, convention 

centers, fairgrounds and restaurants, or 

sales at the buyer’s workplace or in 

dormitory lounges), and which has a 

purchase price of $25 or more if the sale 

is made at the buyer’s residence or a 

purchase price of $130 or more if the 

sale is made at locations other than the 

buyer’s residence, whether under single 

or multiple contracts. The term door-todoor sale does not include a transaction: 

* * * * * 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

Note: The following will not appear in the 

Code of Federal Regulations: 

Concurring Statement of Commissioner Julie 

Brill Federal Trade Commission Trade 

Regulation Rule Concerning Cooling-Off 

Period for Sales Made at Homes or at 

Certain Other Locations (the ‘‘Cooling-Off 

Rule’’) 

January 6, 2015 

Today, the Commission announces that it 

has amended the Commission’s Cooling-Off 

Rule.1 Through this action, the Commission 

retains the exclusionary limit for some ‘‘doorto-door’’ sales, but raises it for others. I write 

separately to voice my strong support for 

retaining the exclusionary limit for sales in 

consumers’ homes; to note my skepticism, 

based on the record before us, of the need to 

raise the exclusionary limit for sales in a 

seller’s transient location; and, as a result, to 

strongly encourage states to engage in 

detailed fact finding about their own local 

conditions before raising any exclusionary 

limits under their own state cooling-off laws 

and rules. 

The Cooling-Off Rule was designed to 

prevent unfair and deceptive practices in 

sales that occur outside a seller’s permanent 

place of business.2 The Cooling-Off Rule uses 

the nomenclature ‘‘door-to-door’’ sales to 

describe the sales that it covers, and includes 

within the definition of ‘‘door-to-door’’ sales 

both sales in a consumer’s home as well as 

sales at a seller’s transient location.3 Sales in 

consumers’ homes and at a seller’s transient 

location have long raised consumer 

protection concerns, as some sellers employ 

deceptive and unfair practices, including 

high pressure sales tactics; misrepresenting 

the quality of goods; and placing 

inappropriate roadblocks to obtaining 

refunds, including simply disappearing 

before the consumer realizes that he or she 

has been scammed.4 The Cooling-Off Rule’s 

primary mechanism for protecting consumers 

from such unscrupulous sales tactics is to 

give consumers who purchase in these 

locations three business days to cancel sales 

of $25 or more.5 Under the Cooling-Off Rule, 

covered sellers must provide consumers with 

written and oral notice of this right to 

cancel.6

The $25 exclusionary limit established in 

the Cooling-Off Rule has not changed since 

the Rule was first promulgated in 1972. In 

January 2013, following completion of a 

regulatory review of the Rule, the 

Commission sought public comment on a 

proposal to raise the exclusionary limit for all 

sales that qualify as ‘‘door-to-door sales’’ 

from $25 to $130, to account for inflation 

since the Rule was issued.7 As further 

explained in the January 2013 Federal 

Register Notice, the Commission derived the 

$130 figure by calculating inflation using the 

U.S. Department of Labor’s Consumer Price 

Index for all-urban consumers (‘‘CPI–U’’).8

The Commission received thirty-three 

comments in response to its proposal to raise 

the exclusionary limit to $130 for all ‘‘door 

to door’’ sales. As discussed more fully 

below, four commenters supported a blanket 

increase of the exclusionary limit to $130.9

The vast majority of commenters—twentyeight—opposed the proposed blanket 

increase to $130. These twenty-eight 

commenters cited a variety of reasons for 

their opposition. Most of them expressed 

general concerns about the need for 

protections against high pressure and 

predatory sales practices.10 The 


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Federal Register / Vol. 80, No. 6 / Friday, January 9, 2015 / Rules and Regulations 1333 

professor at Hamline University, commented on the 

role of ‘‘urgency’’ in multilevel marketing 

recruitment and stated that the rapid rise in MLMs 

since the establishment of the Rule is a new 

development suggesting that the exclusionary limit 

should remain unchanged. Stacie Bosley Comment 

at 1–2. 

11The Massachussetts Attorney General, for 

instance, stated that $25 was not an insignificant 

amount, especially in door-to-door sales where 

economically disadvantaged individuals and senior 

citizens are often targeted in their homes. 

Massachusetts AG Comment at 1–2. The California 

Consumer Affairs Association (‘‘CCAA’’) similarly 

believes that increasing the Cooling-Off Rule’s 

minimum to $130 would remove crucial safeguards 

to reduce abusive sales practices by door-to-door 

sellers, who often target senior citizens, new 

immigrants, and low-income families. CCAA 

Comment at 1. Several BBB chapters expressed 

concern that a raise in the threshold to $130 would 

eliminate needed protections for most door-to-door 

sales, including those that target vulnerable 

consumers at home. BBB of Southern Colorado 

Comment at 1; BBB of North Alabama Comment at 

1; BBB of Louisville, Kentucky Comment at 1; BBB 

of Utah Comment at 1. 

12See, e.g., Susanna Perkins Comment at 1, 

noting that ‘‘most US households have seen their 

incomes stagnate.’’ 

13Sid Kirchheimer, 6 Common Door-to-Door 

Scams, AARP Bulletin, Oct. 29, 2012, http:// 

www.aarp.org/money/scams-fraud/info-10-2012/ 

common-door-to-door-scams.html; BBB Warns of 

Scams That Target Seniors, Better Business Bureau 

Serving Wisconsin, May 7, 2014, http:// 

www.bbb.org/wisconsin/news-events/news-releases/ 

2014/05/bbb-warns-of-scams-that-target-seniors/. 

14See Better Business Bureau, 2013 Complaint 

and Inquiry Statistics, U.S. Statistics Sorted by 

Industry, available at http://www.bbb.org/ 

globalassets/local-bbbs/council-113/media/ 

complaint-stats/us-stats-industry-2013.pdf; see also 

Massachusetts AG Comment at 2. 

15Better Business Bureau, 2013 Complaint and 

Inquiry Statistics, U.S. Statistics Sorted by Industry 

(reporting 41,851 consumer inquiries and 1,149 

consumer complaints concerning door-to-door 

magazine sales). 

16 DSA Comment at 2–3; Mike Shaw Auto Group 

Comment at 1; BELO KELLAM [sic] Comment at 1; 

Susan Rothacker Comment at 1. 

17 16 CFR 429.3(a) (exempting from the rule 

‘‘sellers of automobiles, vans, trucks or other motor 

vehicles sold at auctions, tent sales or other 

temporary places of business, provided that the 

seller is a seller with a permanent place of 

business). 

18Fabian Seafood Company Comment at 1 (June 

13, 2009). 

19 In addition to the exclusion for motor vehicle 

tent sales, the federal Cooling-Off Rule also 

excludes ‘‘sellers of arts or crafts sold at fairs or 

similar places.’’ 16 CFR 429.3(b). 

20See, e.g., N.M. Stat. Ann. section 57–12– 

21(C)(2) (New Mexico’s cooling-off rule’s definition 

of covered consumer goods and services are those 

‘‘other than perishable goods or agricultural 

products’’). 

21Two commenters who opposed the increase in 

the exclusionary limit specifically referenced 

concerns about transient sales. See Rochelle 

Mezzano Comment at 1 (citing concern about the 

difficulty in obtaining recourse from transient 

sellers who do not honor the Cooling-Off Rule 

based on her experience in purchasing an item 

while on a cruise ship); Alan Lunin Comment at 1 

(citing concern that $25 is a significant amount of 

money for consumers who can be targeted 

‘‘anywhere, including outside the grocery store or 

inside church’’). 

22See Mike A. Jacques-O’Gorman Comment at 1– 

2; Adam Offenbecker Comment at 1; Gowen 

Consulting Comment at 1. 

23See supra note 3. 

24See Trade Regulation Rule Concerning CoolingOff Period for Sales Made at Homes or at Certain 

Other Locations, Rule Amendment, llFR ll, at 

ll(Jan. ll, 2015) (citing 16 CFR 429.2). 

25 Id. 

26Washington is the only state with no law or 

regulation providing a cooling-off rule, and so it 

relies entirely on the federal rule. Washington has 

laws in place that give consumers a right to cancel 

contracts for specific types of goods or services, 

including camping club and health club 

memberships, credit repair services, business 

opportunities, hearing aid purchases, retail 

installment plans, telemarketing sales, timeshare 

purchases, and vocational school enrollment. See 

Consumer Issues A–Z: Cancellation Rights, 

Washington State Office of the Attorney General, 

http://www.atg.wa.gov/consumerissues/ 

cancellationrights.aspx#DoorToDoorSales (last 

visited Dec. 22, 2014). 

27Ariz. Rev. Stat. Ann. section 44–5001. 

28N.C. Gen. Stat. Ann. sections 25A–38, 39. 

29 815 Ill. Comp. Stat. Ann. 505/2B. 

30For instance, Alaska provides for a $10 

threshold and a five-day cooling-off period, Alaska 

Stat. Ann. section 45.02.350; Vermont provides for 

a $5 threshold, Vt. Stat. Ann. tit. 9, section 2451a 

Continued 

Massachusetts Attorney General, the 

California Consumer Affairs Association, and 

several chapters of the Better Business 

Bureau (‘‘BBB’’) cited serious concerns about 

deceptive and high pressure sales tactics by 

traveling salespeople for transactions well 

under $130.11 Some commenters stated that, 

while the price of goods and services may 

have risen with inflation, $25 is still a 

significant amount of money for 

consumers.12

After consideration of commenters’ 

concerns, the Commission today has decided 

to (1) retain the $25 limit for door-to-door 

sales made at a buyer’s residence, and (2) 

amend the Rule to increase the limit from 

$25 to $130 for sales that occur at transient 

locations. 

I fully support the retention of the $25 

exclusionary limit for sales in consumers’ 

homes. While the expansion of Internet 

marketing has changed the business model of 

many direct sales companies, door-to-door 

sales continue to be a concern, especially for 

consumers who are the targets of aggressive, 

high pressure, or deceptive sales tactics in 

their own homes. AARP and the BBB have 

identified in-home door-to-door sales as 

being among the top scams targeting senior 

citizens.13 The BBB continues to receive 

consumer complaints about door-to-door 

sales of magazines, cleaning products, meat, 

photography services, and cosmetics—all 

items that typically fall below $130.14 In 

2013, the BBB received over a thousand 

complaints concerning door-to-door 

magazine sales alone.15 As consumers 

continue to be approached in their homes 

with offers for products under $130, the 

Commission correctly recognizes the 

significance that lawmakers, advocates, and 

consumers place on retaining the $25 limit 

for sales that occur in consumers’ homes. I 

am not persuaded, however, of the need to 

raise the exclusionary limit for transient 

sales. The four commenters who supported 

an increase in the exclusionary limit—the 

Direct Selling Association (‘‘DSA’’), Mike 

Shaw Auto Group, and two other individual 

commenters—did not distinguish between 

in-home and transient sales, and lodged only 

general complaints about the rule, including 

that, due to inflation, the Rule now covers 

lower cost items that it was not originally 

intended to cover.16 With respect to the auto 

sales that the Mike Shaw Auto Group might 

be concerned about, the Cooling-Off Rule 

already exempts auto tent sales and other 

sales in transient locations.17 The only 

commenter who mentioned specific concerns 

about the $25 exclusionary limit for transient 

sales did so in response to the Commission’s 

2009 Federal Register Notice seeking 

comments on whether to retain the rule, 

raising a concern about transient sales as they 

relate to perishable food items.18 This 

commenter suggested that sellers of food 

items in transient locations be exempted 

from the Cooling-Off Rule, similar to the 

Rule’s exemption for arts and crafts shows.19

I believe the concerns of this commenter 

could have been addressed in a more targeted 

and effective manner just as the commenter 

suggested, through an exemption from the 

federal rule sales of perishable items. Some 

states take this approach, and exclude 

perishable items from coverage of its coolingoff rule.20

In contrast, among those commenters who 

opposed the increase in the exclusionary 

limit, some specifically raised concerns about 

transient sales.21 As for the remaining 

commenters who objected to an increase in 

the exclusionary limit, it is not clear whether 

they were raising concerns about only inhome sales, or both in-home and transient 

sales. Many of them employed the term 

‘‘door-to-door sales’’ in discussing their 

concerns.22 However, these commenters 

could simply (and correctly) have been 

employing the federal rule’s definition of 

‘‘door-to-door’’ sales, which incorporates 

both in-home sales and sales in transient 

locations under the umbrella of ‘‘door-todoor’’ sales,23 rather than attempting to limit 

their concerns to in-home sales. 

As the Commission correctly notes in 

today’s Federal Register Notice of its 

decision, the federal Cooling-Off Rule does 

not preempt state laws or rules to the extent 

that such rules are not ‘‘directly 

inconsistent’’ with the federal Cooling-Off 

Rule.24 More protective state laws—those 

that have lower exclusionary limits, no 

exclusionary limits, or broader coverage of 

the types of sales that qualify for the coolingoff period and notice requirements of their 

rules—are not ‘‘directly inconsistent’’ with 

the federal rule, and so are not preempted.25

Indeed, states have long had their own 

cooling-off rules that in many cases provide 

consumers with protections greater than 

those provided by the federal rule. Forty-nine 

states and the District of Columbia have a 

state cooling-off rule.26 Some states, like 

Arizona,27 North Carolina,28 and Illinois,29

cover only sales in consumers’ homes, with 

exclusionary limits ranging from zero to $25. 

Most state laws cover both in-home sales and 

sales at transient locations, and once again 

these exclusionary limits range from zero to 

$25.30 New Hampshire, with $150 minimum 


rljohnson on DSK3VPTVN1PROD with RULES
1334 Federal Register / Vol. 80, No. 6 / Friday, January 9, 2015 / Rules and Regulations 

(exempting purchases of under $25 where there is 

no contract or receipt); Oregon has no dollar limit, 

Or. Rev. Stat. Ann. sections 83.710, 720; and New 

York has a $25 limit, N.Y. Pers. Prop. Law section 

426. 

31N.H. Rev. Stat. Ann. section 361–B:1. 

32See, e.g., Second Am. Compl. at ¶¶ 11–16, 34– 

36, State of West Virginia v. Quick Silver 

Restoration, LLC, et al., No. 14–C–1952 (W. Va. Cir. 

Ct. filed Nov. 6, 2014) (alleging that a roofing and 

home improvement company engaged in high 

pressure door-to-door solicitations that violated 

several consumer protection laws and regulations, 

including the state and federal cooling-off rules; 

Compl. at ¶ 1, State of Vermont v. Terry, No. 570– 

9–14 Wncv (Vt. Super. Ct. filed Sept. 24, 2014) 

(alleging that a door-to-door meat salesman violated 

the state’s Consumer Protection Act by failing to 

notify consumers of their three-day right to cancel, 

misleading consumers regarding the price and 

guarantee on the meat, failing to disclose material 

information to the consumer, and selling meat 

without a required license); Compl., 

Commonwealth of Virginia v. KLMN Readers Servs. 

Inc., No. CL13002796–00 (Chesapeake Cir. Ct. filed 

Nov. 25, 2013) (alleging that a door-to-door 

magazine company violated Viriginia’s Consumer 

Protection and Home Solicitation Sales Acts) 

(default judgment granted Sept. 24, 2014). In 

contrast, the last time the Federal Trade 

Commission employed the federal Cooling-Off Rule 

in an enforcement action was nearly 15 years ago. 

Compl., F.T.C. v. College Resource Mgmt., Inc. et 

al., No. 3–01CV0828–G (N.D. Tex. May 1, 2001) 

(alleging, inter alia, that a purported college 

financial services company violated Section 5 of the 

FTC Act and the Cooling-Off Rule in connection 

with its deceptive practices in financial aid sales 

seminars held at hotels or in banquet rooms). 

exclusionary limit, is the only state with a 

dollar limit above $25.31

With respect to enforcement, states have 

been much more active in enforcing their 

state rules than has the Commission.32 This 

is no doubt due at least in part to the fact that 

the states are closer to consumers who suffer 

from many of the unscrupulous activities 

involving sales in the home and in transient 

locations. 

Because I am not persuaded that the 

federal Cooling-Off Rule’s long-standing $25 

exclusionary limit on transient sales should 

be raised to $130, and because I find there 

is convincing evidence on the overall need to 

continue protecting consumers through 

cooling-off rules, I urge state policy makers, 

law enforcement officials, and regulators to 

not interpret today’s amendment to the 

federal Cooling-Off Rule as a signal that they 

should follow suit and raise the exclusionary 

limit of their respective cooling-off rules for 

sales in transient locations. Indeed, the often 

highly localized nature of potentially 

deceptive practices involving sales in 

transient locations puts states in the best 

position to determine the wisdom of raising 

their own exclusionary limits for sales in 

transient locations. I strongly encourage any 

state that may consider following the course 

of action taken by the Commission today to 

engage first in a more focused effort to gather 

evidence about potentially unscrupulous 

activities involving transient sales in their 

jurisdictions. 

[FR Doc. 2015–00164 Filed 1–8–15; 8:45 am] 

BILLING CODE 6750–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2014–0912] 

Drawbridge Operation Regulation; 

Lake Washington Ship Canal, Seattle, 

WA 

AGENCY: Coast Guard, DHS. 

ACTION: Notice canceling temporary 

deviation from regulations. 

SUMMARY: The Coast Guard is canceling 

the temporary deviation concerning the 

operating schedule that governs the 

Seattle Department of Transportation 

(SDOT) double leaf bascule Ballard 

Bridge across the Lake Washington Ship 

Canal, mile 1.1, at Seattle, WA. This 

deviation was necessary to 

accommodate evening detoured 

commute traffic during road 

construction. It is being cancelled due to 

the construction project has been 

completed. 

DATES: The temporary deviation 

published on November 14, 2014, 78 FR 

68120, is cancelled as of January 9, 

2015. 

ADDRESSES: The docket for this 

deviation, [USCG–2014–0912] is 

available at http://www.regulations.gov. 

Type the docket number in the 

‘‘SEARCH’’ box and click ‘‘SEARCH.’’ 

Click on Open Docket Folder on the line 

associated with this deviation. You may 

also visit the Docket Management 

Facility in Room W12–140 on the 

ground floor of the Department of 

Transportation West Building, 1200 

New Jersey Avenue SE., Washington, 

DC 20590, between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this temporary 

deviation, call or email Steven Fischer, 

Coast Guard Thirteenth District, Bridge 

Specialist; telephone 206–220–7277, 

email d13-pf-d13bridges@uscg.mil. If 

you have questions on viewing the 

docket, call Cheryl Collins, Program 

Manager, Docket Operations, telephone 

202–366–9826. 

SUPPLEMENTARY INFORMATION: 

A. Basis and Purpose 

On November 14, 2014, we published 

a temporary deviation entitled 

‘‘Drawbridge Operation Regulation; 

Lake Washington Ship Canal, Seattle, 

WA.’’ in the Federal Register (78 FR 

68120). The temporary deviation 

concerned the Seattle Department of 

Transportation (SDOT) request that the 

Ballard Bridge, mile 1.1, across the Lake 

Washington Ship Canal accommodate 

evening detoured commute traffic 

during road construction. This deviation 

allowed the bridge to remain in the 

closed position for an extra hour during 

evening traffic. Vessels able to pass 

through the bridge in the closed 

positions may do so at anytime. The 

bridge would not be able to open during 

this construction period, and extend the 

daily closure one hour Monday through 

Friday. This deviation from the 

operating regulations was authorized 

under 33 CFR 117.35. 

B. Cancellation 

The deviation was intended to 

facilitate routing of heavy traffic during 

peak commute time on the bridge. The 

deviation is not necessary at this time 

because SDOT has completed the 

construction on the Ballard Bridge. 

Dated: December 23, 2014. 

Steven M. Fischer, 

Bridge Administrator, Thirteenth Coast Guard 

District. 

[FR Doc. 2015–00174 Filed 1–8–15; 8:45 am] 

BILLING CODE 9110–04–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2014–1057] 

Drawbridge Operation Regulations; 

Norwalk River, Norwalk, CT 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of temporary deviation 

from regulations; request for comments. 

SUMMARY: The Coast Guard has issued a 

temporary deviation from the operating 

schedule that governs the Metro-North 

WALK Bridge across the Norwalk River, 

mile 0.1, at Norwalk, Connecticut. This 

deviation will test a change to the 

drawbridge operation schedule to 

determine whether a permanent change 

to the schedule is needed. This 

deviation will allow the Metro-North 

WALK Bridge to operate under an 

alternate schedule to facilitate the high 

volume of rail service across the MetroNorth WALK Bridge at peak hours, 

while balancing both the needs of rail 

and marine traffic. 

DATES: This deviation is effective 

without actual notice from January 9, 

2015 through 11:59 p.m. on June 28, 

2015. For the purposes of enforcement, 

actual notice will be used from 12:01 


rljohnson on DSK3VPTVN1PROD with RULES