FTC Seeks Comment on Extension of Informal Dispute Settlement Rule Information Collection

Notice

Agency Information Collection Activities; Proposed Collection; Comment Request; Extension

A Notice by the Federal Trade Commission on 04/17/2026

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• Public Inspection Published Document: 2026-07538 (91 FR 20655) Document Headings ###### Federal Trade Commission

AGENCY:

Federal Trade Commission.

ACTION:

Notice.

SUMMARY:

In accordance with the Paperwork Reduction Act of 1995 (“PRA”), the Federal Trade Commission (“FTC” or “Commission”) is seeking public comment on its proposal to extend for an additional three years the Office of Management and Budget (“OMB”) clearance for information collection requirements in its Informal Dispute Settlement Procedures Rule (“the Dispute Settlement Rule” or “Rule”). That clearance expires on July 31, 2026.

DATES:

Comments must be filed by June 16, 2026.

ADDRESSES:

Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write “Dispute Settlement Rule; PRA Comment: FTC File No. P044403” on your comment, and file your comment online at https://www.regulations.gov by following the instructions on the web-based form. If you prefer to file your comment on paper, mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex E), Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Sung W. Kim, Attorney, Division of Marketing Practices, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580, (202) 326-2211; skim6@ftc.gov.

SUPPLEMENTARY INFORMATION:

Title: Informal Dispute Settlement Procedures Rule (the Dispute Settlement Rule or the Rule), 16 CFR part 703.

OMB Control Number: 3084-0113.

Likely Respondents: Warrantors that Use an IDSM (Automobile Manufacturers) and Informal Dispute Settlement Mechanisms.

Estimated Annual Burden Hours: 11,738 (derived from 7,843 recordkeeping hours in addition to 2,614 reporting hours and 1,281 disclosure hours).

Estimated Annual Labor Costs: $339,496.

Estimated Annual Capital or Other Non-Labor Costs: $425,987. ( printed page 20656)

Abstract: The Dispute Settlement Rule is one of three rules [1 ] that the FTC implemented pursuant to requirements of the Magnuson-Moss Warranty Act, 15 U.S.C. 2301 et seq. (“Warranty Act” or “Act”). [2 ] The Dispute Settlement Rule, 16 CFR part 703, specifies the minimum standards that must be met by any informal dispute settlement mechanism (“IDSM”) incorporated into a written consumer product warranty and that the consumer is required to use before pursuing legal remedies under the Act in court (known as the “prior resort requirement”). [3 ]

The Dispute Settlement Rule standards for IDSMs include requirements concerning the mechanism's structure (e.g., funding, staffing, and neutrality), the qualifications of staff or decision makers, the mechanism's procedures for resolving disputes (e.g., notification, investigation, time limits for decisions, and follow-up), recordkeeping, and annual audits. The Rule requires that IDSMs establish written operating procedures and provide copies of those procedures upon request.

As required by section 3506(c)(2)(A) of the PRA, 44 U.S.C. 3506(c)(2)(A), the FTC is providing this opportunity for public comment before requesting that OMB extend the existing clearance for the information collection requirements associated with the Dispute Settlement Rule.

Burden Statement

The primary burden from the Dispute Settlement Rule comes from the recordkeeping requirements that apply to IDSMs that are incorporated into a consumer product warranty through a prior resort clause. Currently, there are two IDSMs operating under the Rule: (1) the BBB AUTO LINE, and (2) the National Center for Dispute Settlement (“NCDS”). Although the Rule's information collection requirements have not changed since 2023, staff has adjusted its previous estimates slightly upward for its 2026 calculations because the two IDSMs indicate that, on average, more disputes have been handled since the previous submission to OMB (12,420 disputes/year projected in 2023; 15,685 disputes/year projected in 2026). The calculations underlying staff's new estimates follow.

Recordkeeping: The Rule requires IDSMs to maintain records of each consumer warranty dispute. Both the BBB AUTO LINE and NCDS report the number of disputes closed each year. Staff is using those numbers to project what will happen over the next three years of OMB clearance for the Rule. The BBB AUTO LINE handles an average of 11,061 disputes each year. [4 ] NCDS handles an average of 4,624 disputes each year. [5 ] Based on these figures, staff estimates that the average number of IDSM disputes covered by the Rule is approximately 15,685. Case files must include information such as the consumer's contact information, the make and model of the product at issue, all letters or other correspondence submitted by the consumer or warrantor, and all evidence collected to resolve the dispute. Because maintaining individual case records is a necessary function for any IDSM, much of the burden would be incurred in the ordinary course of business. Nonetheless, staff estimates that maintaining individual case files imposes an additional burden of 30 minutes per case.

Accordingly, the total annual recordkeeping burden is approximately 7,843 hours ((15,685 disputes x 30 minutes of burden/dispute)/60 minutes/hour).

Reporting: The Rule requires IDSMs to update indexes, complete semiannual statistical summaries, and submit an annual audit report to the FTC. Staff estimates that covered entities spend approximately 10 minutes per case for these activities, resulting in a total annual burden of approximately 2,614 hours ((15,685 disputes × 10 minutes of burden/dispute)/60 minutes/hour).

Disclosure

(a) Warrantors' Disclosure Burden

Similar to 2023, staff has determined that it would be appropriate to account for the disclosure burden as it relates to warrantors based on two types of additional information that warrantors are required to disclose under the Rule: (1) information concerning the IDSM and its procedures; and (2) information that makes consumers aware of the existence of the IDSM. [6 ]

A review of the annual audits of the BBB AUTO LINE and the NCDS indicates that there are approximately thirty-four automobile manufacturers covered by the Rule. Staff assumes that each manufacturer spends an average of thirty hours a year creating, revising, and distributing the informational materials necessary to comply with the Rule, resulting in an annual disclosure burden of 1,020 hours (34 manufacturers × 30 hours).

(b) IDSMs' Disclosure Burden

Under the Rule, the IDSMs are required to provide to interested consumers, upon request, copies of the various types of information the IDSM possesses, including its annual audits. In addition, consumers who have filed disputes with the IDSM also have a right to copies of their records. IDSMs are permitted to charge for providing both types of information.

Based on discussions with representatives of the two IDSMs, staff estimates that the burden imposed by these disclosure requirements is approximately 261 hours per year. This estimate draws from the average number of disputes closed each year with the IDSMs (15,685) and the assumption that twenty percent of consumers request copies of the records pertaining to their disputes (approximately 3,137 disputes). [7 ] Staff estimates that copying such records would require approximately 5 minutes per dispute. [8 ] Staff estimates a total disclosure burden of approximately 261 hours ((3,137 disputes × 5 minutes of burden/dispute)/60 minutes/hour) for the IDSMs.

Accordingly, the total PRA-related annual hours burden attributed to the Rule is approximately 11,738 (7,843 hours for recordkeeping plus 2,614 hours for reporting plus 1,020 hours for warrantors' disclosures and 261 hours for IDSM disclosures).

Total Annual Labor Cost: $339,496.

Recordkeeping: Staff assumes that IDSMs use clerical staff to comply with the recordkeeping requirements contained in the Rule at an hourly rate of approximately $22. [9 ] Thus, the labor ( printed page 20657) cost associated with the 7,843 annual burden hours for recordkeeping is approximately $172,546 (7,843 burden hours x $22 per hour).

Reporting: Staff assumes that IDSMs also use clerical support staff at an hourly rate of $22 to comply with the reporting requirements. Thus, the labor cost associated with the 2,614 annual burden hours for reporting is approximately $57,508 (2,614 burden hours × $22 per hour).

Disclosure: Staff assumes that the work required to comply with the warrantors' disclosure requirements entails an equal mix of legal, clerical, and graphic design work. Staff assumes that one third of the total disclosure hours for warrantors (340 hours) require legal work at a rate of $250 per hour, one third require graphic design at a rate of $33 per hour, [10 ] and one third require clerical work at a rate of $22 per hour. This results in a disclosure labor burden of $103,700 for warrantors ((340 × $250) + (340 × $33) + (340 × $22)).

In addition, staff assumes that IDSMs use clerical support at an hourly rate of $22 to reproduce records and, therefore, the labor cost associated with the 261 annual hours of disclosure burden for IDSMs is approximately $5,742 (261 burden hours × $22 per hour).

Accordingly, the combined total annual labor cost for PRA-related burden under the Rule is approximately $339,496 ($172,546 for recordkeeping + $57,508 for reporting + $109,442 for disclosures).

Total Annual Capital or Other Non-Labor Costs: $425,987.

Total Capital and Start-Up Costs: The Rule imposes no appreciable current capital or start-up costs. The vast majority of warrantors have already 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 already have access.

The Rule imposes one additional cost on IDSMs operating under the Rule, which is the annual audit requirement. According to representatives of the IDSMs, the vast majority of costs associated with this requirement consist of the fees paid to the auditors and their staffs. Representatives of the IDSMs previously estimated a combined cost of $315,000 associated with the audits. In light of cost increases over the past three years, staff has increased that estimate by an additional twenty percent, estimating that the annual audit requirement now costs $378,000 (or $315,000 plus 20% increase).

Other Non-Labor Costs: As discussed above, staff assumes that approximately twenty percent of dispute files (approximately 3,137 files) are requested by consumers. Staff also estimates that only five percent of consumers will request a copy of the IDSM's audit report (approximately 784 audit reports). [11 ] Staff bases this assumption on the number of consumer requests received by the IDSMs in the past and the fact that the IDSMs' annual audits are available online. Staff estimates that the average dispute-related file contains 35 pages and a typical annual audit file contains approximately 200 pages. Staff estimates copying costs of 18 cents per page.

Thus, the total annual copying cost for dispute-related files is approximately $19,763 (35 pages per file × $0.18 per page × 3,137 disputes), and the total annual copying cost for annual audit reports is approximately $28,224 (200 pages per audit report × $0.18 per page × 784 audit reports). Accordingly, the total cost attributed to copying under the Rule is approximately $47,987.

Thus, the total non-labor cost under the Rule is approximately $425,987 ($378,000 for auditor fees + $47,987 for copying costs).

Request for Comment

Pursuant to Section 3506(c)(2)(A) of the PRA, the FTC invites comments on: (1) whether the disclosure and recordkeeping requirements are necessary, including whether the information will be practically useful; (2) the accuracy of our burden estimates, including whether the methodology and assumptions used are valid; (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.

For the FTC to consider a comment, we must receive it on or before June 16, 2026. Your comment, including your name and your state, will be placed on the public record of this proceeding, including the https://www.regulations.gov website.

If you file your comment on paper, write “Dispute Settlement Rule; PRA Comment: FTC File No. P044403” on your comment and on the envelope, and mail it to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex E), Washington, DC 20580.

Because your comment will become publicly available at https://www.regulations.gov, you are solely responsible for making sure that your comment does not include any sensitive or confidential information. In particular, your comment should not include any sensitive personal information, such as your or anyone else's Social Security number; date of birth; driver's license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, your comment should not include any “trade secret or any commercial or financial information which . . . is privileged or confidential”—as provided by Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2) —including, in particular, competitively sensitive information, such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.

Comments containing material for which confidential treatment is requested must (1) be filed in paper form, (2) be clearly labeled “Confidential,” and (3) comply with FTC Rule 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c). Your comment will be kept confidential only if the General Counsel grants your request in accordance with the law and the public interest. Once your comment has been posted publicly at www.regulations.gov, we cannot redact or remove your comment unless you submit a confidentiality request that meets the requirements for such treatment under FTC Rule 4.9(c), and the General Counsel grants that request.

The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or ( printed page 20658) before June 16, 2026. For information on the Commission's privacy policy, including routine uses permitted by the Privacy Act, see https://www.ftc.gov/​site-information/​privacy-policy.

Josephine Liu,

Assistant General Counsel for Legal Counsel.

Footnotes

1.

 The other two rules relate to the information that must appear in any written warranty offered on a consumer product costing more than $15 (Consumer Product Warranty Rule, 16 CFR part 701) and the pre-sale availability of warranty terms (Pre-Sale Availability Rule, 16 CFR part 702).

Back to Citation 2. 40 FR 60168 (Dec. 31, 1975).

Back to Citation 3.

 The Dispute Settlement Rule applies only to those firms that choose to require consumers to use an IDSM. Neither the Rule nor the Act requires warrantors to set up IDSMs. A warrantor is free to set up an IDSM that does not comply with the Rule as long as the warranty does not contain a prior resort requirement.

Back to Citation 4.

 According to its annual audits, the BBB AUTO LINE closed 7,766 disputes in 2022, 12,512 in 2023, and 12,906 in 2024. This includes disputes for at least two manufacturers that do not include a prior resort requirement. Therefore, this number likely overstates the number of disputes covered by the Rule.

Back to Citation 5.

 According to NCDS's annual audits, the number of disputes both within its jurisdiction and closed each year were 2,777 in 2022, 4,410 in 2023, and 6,685 in 2024.

Back to Citation 6. 16 CFR 703.2(b).

Back to Citation 7.

 This assumes each dispute is associated with one consumer.

Back to Citation 8.

 In addition, some case files are provided to consumers electronically, which further reduces the paperwork burden borne by the IDSMs.

Back to Citation 9.

 The wage rate is derived from occupational data found in the Bureau of Labor Statistics, Occupational Employment and Wages (Apr. 2025),

available at https://www.bls.gov/​news.release/​ocwage.htm. The clerical wage rate estimate is based on the mean hourly wage data for the category of “Office Clerks, general” ($21.86), rounded up to the nearest whole dollar amount ($22).

Back to Citation 10.

 Id. The wage rate estimate for graphic design work is based on the mean hourly wage data for the category of “Graphic designers” ($32.98), rounded up to the nearest whole dollar amount ($33).

Back to Citation 11.

 This estimate assumes each dispute is associated with one consumer.

Back to Citation [FR Doc. 2026-07538 Filed 4-16-26; 8:45 am]

BILLING CODE 6750-01-P

Published Document: 2026-07538 (91 FR 20655)