• Rule Issued on Notices in Prescreened Offers
  • February 5, 2005
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • The FTC has issued its final regulation governing required notices in prescreened offers for credit or insurance, the agency announced on January 24, 2005.

    The final rule, which will be published in the Federal Register shortly, closely tracks the proposed rule. Under the rule, notices must inform consumers about their right to opt out of future prescreened offers. The rule mandates a "layered" notice -- a short portion on the first page of the solicitation and a longer portion containing further information.

    The Fair and Accurate Credit Transactions Act of 2003 requires the FTC to prescribe prescreen notices that are "simple and easy to understand," and establish a format, type size, and manner for the presentation of opt-out notices. In its final rule, the FTC keeps the "layered" approach presented in its proposed rule, requiring that each offer contain a short statement informing consumers of their right to opt out and listing a toll-free number to call, as well as a longer statement providing additional information about prescreening. The short portion of the notice should appear on the document designed to be seen first by the consumer, such as the cover letter. The final rule also establishes other baseline requirements for the format, type size, and manner of the notices. The rule presents "model" notices in English and Spanish.

    Significance: All marketers of prescreened offers for credit or insurance must abide by the final FTC rule regarding notice. Copies of the FTC's final rule are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.