Federal Register: July 30, 2009 (Volume 74, Number 145)
DOCID: fr30jy09-21 FR Doc E9-18194
FEDERAL TRADE COMMISSION
Federal Trade Commission
CFR Citation: 16 CFR Part 254
NOTICE: PROPOSED RULES
DOCID: fr30jy09-21
DOCUMENT ACTION: Request for public comments.
SUBJECT CATEGORY:
Private Vocational and Distance Education Schools
DATES: Written comments must be received by October 16, 2009.
DOCUMENT SUMMARY:
As part of the Commission's systematic review of all current FTC rules and guides, the Commission requests public comment on the overall costs, benefits, necessity, and regulatory and economic impact of the FTC's guides for ``Private Vocational and Distance Education Schools'' (``Vocational School Guides'' or ``Guides'').
SUMMARY:
Private Vocational and Distance Education Schools
SUPPLEMENTAL INFORMATION
I. Background
The Vocational School Guides are intended to advise proprietary
businesses offering vocational training courses, either on the school's
premises or through distance education, how to avoid unfair or
deceptive practices in connection with the advertising, promotion,
marketing, or sale of their courses or programs. The Commission
promulgated the Guides (then titled the ``Guides for Private Vocational
and Home Study Schools'') in May 1972. The guides became effective on
August 14, 1972. (37 FR 9665 (May 16, 1972)). The Commission amended
the Guides effective October 9, 1998. These amendments added a
provision addressing misrepresentations related to postgraduation
employment. In order to streamline the Guides, certain provisions not
specific to vocational schools and a section suggesting affirmative
disclosures were deleted.\2\ (62 FR 19703 (Aug. 10, 1998) as amended at 63 FR 72350 (Dec. 31, 1998)).
\2\The deleted affirmative disclosures included the school's
makeup work policy, costs of purchasing the textbooks and equipment
needed for the courses, a description of the school's physical
facilities and a description of the school's placement service.
The Vocational School Guides address misrepresentations in the
description of a school including misrepresentations that the school is
affiliated with the government or is an employment agency. The Guides
also address misleading representations related to the accreditation and approval
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of the school, the transferability of credit received at the school to
other institutions, and the use of testimonials and endorsements.
Schools are cautioned against misrepresenting the qualifications of
teachers, the nature of the courses, the availability of employment
after graduation, the availability of financial assistance, and
enrollment qualifications. Also addressed is the use of deceptive
diplomas or certificates. Finally, the Guides warn against using
deceptive sales practices such as using classified ads that appear to be ``helpwanted'' ads.
These Guides, like other industry guides issued by the Commission, are ``administrative interpretations of laws administered by the Commission for the guidance of the public in conducting its affairs in conformity with legal requirements.'' 16 CFR 1.5. Conduct inconsistent with the Guides may result in corrective action by the Commission under applicable statutory provisions.
II. Regulatory Review Program
The Commission reviews all current Commission rules and guides periodically. These reviews seek information about the costs and benefits of the Commission's rules and guides as well as their regulatory and economic impact. The information obtained assists the Commission in identifying rules and guides that warrant modification or rescission. Therefore, the Commission solicits comments on, among other things, the economic impact of, and the continuing need for the Vocational School Guides; the benefits of the Guides to purchasers of vocational education; and the burdens the Guides place on businesses. III. Request for Comment
The Commission solicits comments on the following specific questions related to the Vocational School Guides:
(1) Is there a continuing need for the Guides as currently promulgated? Why or why not?
(2) What benefits have the Guides provided to consumers? What evidence supports the asserted benefits?
(3) What modifications, if any, should the Commission make to the Guides to increase their benefits to consumers?
(a) What evidence supports your proposed modifications?
(b) How would these modifications affect the costs and benefits of the Guides for consumers?
(c) How would these modifications affect the costs and benefits of the Guides for businesses, particularly small businesses?
(4) Should the Guides define ``clearly and conspicuously,'' given
the guidance that industry members should make certain disclosures
clearly and conspicuously? If so, why, and how? If not, why not?
(5) What impact have the Guides had on the flow of truthful
information to consumers and on the flow of deceptive information to consumers? What evidence supports the asserted impact?
(6) What significant costs have the Guides imposed on consumers? What evidence supports the asserted costs?
(7) What modifications, if any, should be made to the Guides to reduce the costs imposed on consumers?
(a) What evidence supports your proposed modifications?
(b) How would these modifications affect the costs and benefits of the Guides for consumers?
(c) How would these modifications affect the costs and benefits of the Guides for businesses, particularly small businesses?
(8) Please provide any evidence that has become available since
1998 concerning consumer perception of or experience with private
vocational and distance education schools. Does this new information
indicate that the Guides should be modified? If so, why, and how? If not, why not?
(9) What benefits, if any, have the Guides provided to businesses,
and in particular to small businesses? What evidence supports the asserted benefits?
(10) What modifications, if any, should be made to the Guides to
increase their benefits to businesses, and particularly to small businesses?
(a) What evidence supports your proposed modifications?
(b) How would these modifications affect the costs and benefits of the Guides for consumers?
(c) How would these modifications affect the costs and benefits of the Guides for businesses, particularly small businesses?
(11) What significant costs, including costs of compliance, have
the Guides imposed on businesses, particularly small businesses? What evidence supports the asserted costs?
(12) What modifications, if any, should be made to the Guides to
reduce the costs imposed on businesses, and particularly on small businesses?
(a) What evidence supports your proposed modifications?
(b) How would these modifications affect the costs and benefits of the Guides for consumers?
(c) How would these modifications affect the costs and benefits of the Guides for businesses, particularly small businesses?
(13) What evidence is available concerning the degree of industry
compliance with the Guides? Does this evidence indicate that the Guides should be modified? If so, why, and how? If not, why not?
(14) Is any of the guidance provided in the Guides no longer
needed? If so, explain. Please provide supporting evidence.
(15) What potentially unfair or deceptive practices involving the
advertising and promotional claims used by vocational and distance
education schools in the advertising, promotion, marketing, and sale of
courses or programs of instruction offered by private vocational or
distance education schools, if any, are not covered or are not adequately covered by the Guides?
(a) What evidence demonstrates the existence of such practices?
Please provide specific examples and indicate how and where such potentially unfair or deceptive practices occur.
(b) With reference to such practices, should the Guides be modified? If so, why, and how? If not, why not?
(16) What modifications, if any, should be made to the Guides to
account for changes in relevant technology or economic conditions? (a) What evidence supports the proposed modifications?
(b) How would these modifications affect the costs and benefits of
the Guides for consumers and businesses, particularly small businesses?
(17) Do the Guides overlap or conflict with other federal, state, or local laws or regulations? If so, how?
(a) What evidence supports the asserted conflicts?
(b) With reference to the asserted conflicts, should the Guides be modified? If so, why, and how? If not, why not?
(c) Is there evidence concerning whether the Guides have assisted
in promoting national consistency with respect to the advertising and
promotional claims used by vocational and distance education schools to recruit students? If so, please provide that evidence.
(18) Are there foreign or international laws, regulations, or
standards with respect to the advertising and promotional claims used
by vocational and distance education schools to recruit students that
the Commission should consider as it reviews the Guides? If so, what are they?
(a) Should the Guides be modified in order to harmonize with these
foreign or international laws, regulations, or standards? If so, why, and how? If not, why not?
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(b) How would such harmonization affect the costs and benefits of
the Guides for consumers and businesses, particularly small businesses? List of Subjects in 16 CFR Part 254
Advertising, Trade practices.
Authority: 38 Stat. 717, as amended; 15 U.S.C. 4158.
By direction of the Commission.
Donald S. Clark,
Secretary
FOR FURTHER INFORMATION CONTACT
Julie A. Lady, (216) 263-3409, Staff Attorney, East Central Region, Federal Trade Commission, 1111 Superior Avenue, Suite 200, Cleveland, Ohio 44114.