16 C.F.R. § 703.7

Audits

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(a) The Mechanism shall have an audit conducted at least annually, to determine whether the Mechanism and its implementation are in compliance with this part. All records of the Mechanism required to be kept under § 703.6 of this part shall be available for audit.

(b) Each audit provided for in paragraph (a) of this section shall include at a minimum the following:

(1) Evaluation of warrantors' efforts to make consumers aware of the Mechanism's existence as required in § 703.2(d) of this part;

(2) Review of the indexes maintained pursuant to § 703.6 (b), (c), and (d) of this part; and

(3) Analysis of a random sample of disputes handled by the Mechanism to determine the following:

(i) Adequacy of the Mechanism's complaint and other forms, investigation, mediation and follow-up efforts, and other aspects of complaint handling; and

(ii) Accuracy of the Mechanism's statistical compilations under § 703.6(e) of this part. (For purposes of this subparagraph “analysis” shall include oral or written contact with the consumers involved in each of the disputes in the random sample.)

(c) A report of each audit under this section shall be submitted to the Federal Trade Commission, and shall be made available to any person at reasonable cost. The Mechanism may direct its auditor to delete names of parties to disputes, and identity of products involved, from the audit report.

(d) Auditors shall be selected by the Mechanism. No auditor may be involved with the Mechanism as a warrantor, sponsor or member, or employee or agent thereof, other than for purposes of the audit.

Notes of Decisions

Cited in 4 cases, 1987–2011 · leading case: Maronyan v. Toyota Motor Sales, U.S.A., Inc., 658 F.3d 1038 (9th Cir. 2011).

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Maronyan v. Toyota Motor Sales, U.S.A., Inc., 658 F.3d 1038 (9th Cir. 2011). · cites it 2× “See 16 C.F.R. § 703.7 . Because a court (utilizing the narrow facts in a single case) cannot evaluate the many policy considerations hanging in the balance of a compliance order, the FTC is better suited to decide compliance issues under the national Mechanism regulatory regime.”

Fred F. Wolf v. Ford Motor Co., 829 F.2d 1277 (4th Cir. 1987). “16 C.F.R. § 703.7 . The audits include an evaluation of the warrantor’s efforts to inform consumers of the mechanism, the required indices and statistics, and a random sample of disputes resolved by the mechanism.”

Muller v. Winnebago Indus., Inc., 318 F. Supp. 2d 844 (D. Ariz. 2004). “First, Plaintiff argues that it has not been audited as required by 16 C.F.R. § 703.7 . Second, Plaintiff contends that the IDR mechanism fails to allow the necessary remedies for successful claimants, as required by 16 C.”

Graham v. Hyundai Motor Am., 855 N.E.2d 562 (Ill. App. Ct. 2006). “” 16 C.F.R. §703.7 (2006). Hyundai argues that the BBB Auto Line program is subjected to such an audit.”

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