Calling All Telemarketers:
Amendments to the FTC's Telemarketing
The Federal Trade Commission (FTC) has
amended the Telemarketing Sales Rule (TSR) to give consumers a choice
about whether they want to receive most telemarketing calls. Consumers
soon will be able to put their phone numbers on a national "do not
call" registry. It will be illegal for most telemarketers or sellers
to call a number listed on the registry.
In addition to establishing a national "do not call" registry,
amendments to the TSR restrict call abandonment, crack down on
unauthorized billing, and require telemarketers to transmit caller ID
Who is covered by the amended TSR?
The TSR applies to any plan, program or campaign to sell goods or
services through interstate phone calls. This includes telemarketers
who solicit consumers, often on behalf of third party sellers. It also
includes sellers who provide, offer to provide, or arrange to provide
goods or services to consumers in exchange for payment.
The amended TSR also applies to for-profit telemarketers who conduct
interstate solicitation of charitable contributions by phone.
According to the amended TSR, telemarketers soliciting charitable
contributions do not have to access the national "do not call"
registry, but they must honor "do-not-call" requests from individual
Some businesses remain exempt from the TSR, including long-distance
phone companies and airlines, and insurance companies operating under
state regulations. Although these companies are not subject to the TSR,
any telemarketers they hire to make calls on their behalf are required
When will the national "do not call" registry take effect?
- In July, consumers may begin
registering for free online or by calling a toll-free number. To
better manage the anticipated volume of registrations, initial
sign-up by phone for the national "do not call" registry will be
phased in, region-by-region, over an eight-week period. Online
registration will be available nation-wide in July.
- In September, telemarketers and
other sellers will have access to the registry. They will be
required to scrub their call lists against the national "do not
call" registry at least once every 90 days.
- In October, the FTC and the States
will start to enforce the national "do not call" registry provisions
of the Amended Telemarketing Sales Rule. Violators are subject to a
fine of up to $11,000 per violation. At
this point, consumers on the registry should start to get fewer
The FTC's implementation schedule for
the national "do not call" registry will be updated at
How will the national "do not call"
Under the amended TSR, telemarketers and sellers will be required to
search the registry at least quarterly and drop from their call lists
the phone numbers of consumers who have registered. Telemarketers and
sellers must access the national "do not call" registry to "scrub"
their call lists. A dedicated, fully automated and secure website will
provide this information to telemarketers and sellers.
When a telemarketer or seller accesses the system for the first time,
they will have to provide some identifying information, such as
company name and address, company contact person, and the contact
person's telephone number and email address. If a telemarketer is
accessing the registry on behalf of a client seller, the telemarketer
will need to identify the client (or clients).
The only consumer information telemarketers and sellers will be able
to access from the national registry is a registrant's telephone
number. Consumers' phone numbers will be sorted and available by area
code. Each company accessing the registry data will be required to pay
an annual fee based on the number of area codes the company accesses.
On subsequent visits to the website, tele-marketers and sellers will
be able to download either a complete updated list of numbers from
their selected area codes or a more limited list that shows additions
or deletions since the company's last download.
A consumer's number will stay on the registry for five years, until
the consumer asks for the number to be removed from the registry, or
until the consumer changes phone numbers. Consumers will be able to
renew their registration every five years.
After the law takes effect, a consumer who receives a telemarketing
call despite being on the registry will be able to file a complaint
with the FTC, either online or by calling a toll-free number.
Violators could be fined up to $11,000 per incident.
What about an established business relationship?
A telemarketer or seller may call a consumer with whom it has an
established business relationship for up to 18 months after the
consumer's last purchase, delivery, or payment - even if the
consumer's number is on the national "do not call" registry. In
addition, a company may call a consumer for up to three months after
the consumer makes an inquiry or submits an application to the
company. And if a consumer has given a company written permission, the
company may call the consumer even if the consumer's number is on the
national "do not call" registry.
One caveat: if a consumer asks a company not to call, the company may
not call, even if there is an established business relationship.
Indeed, a company may not call a consumer - regardless of whether the
consumer's number is on the registry - if the consumer has asked to be
put on the company's "do not call" list.
How does the national "do not call" registry square with state "do
not call" lists?
Some states have their own "do not call" registries. The FTC is
working to coordinate the national "do not call" registry with the
states to avoid duplication. Check the FTC's website at www.ftc.gov/donotcall,
or check with your state attorney general for updates.
What else is new in the TSR?
New provisions for interstate solicitations of charitable
Amendments to the TSR require that a for-profit telemarketer
soliciting on behalf of a charitable organization promptly identify
both the organization and the fact that the call is being made to
solicit a charitable contribution. These changes were mandated by the
USA PATRIOT Act.
The amendments also prohibit certain misrepresentations in charitable
fundraising calls by for-profit telemarketers. Telemarketers
soliciting charitable contributions are not required to comply with
the national "do not call" registry provisions of the TSR, but are
required to accept and honor an individual consumer's specific request
that they not call.
New provisions on call abandonment
In addition to creating the national "do not call" registry, the
amended TSR contains new provisions on call abandonment. This practice
violates the Rule. However, the amendment gives your business a "safe
harbor" on call abandonment if you meet certain requirements.
Specifically, you must:
- ensure that no more than three
percent of calls that are answered by a person are abandoned,
measured per day per calling campaign;
- allow each called consumer's
telephone to ring for at least 15 seconds or four rings before
- connect each call to a sales
representative within two seconds of the consumer's greeting, or, if
a sales representative is not available to speak with the consumer
within two seconds of the call being answered, you must play a
recorded message stating the name and telephone number of the
seller. The message cannot include a sales pitch;
- maintain records showing compliance
with the requirements for abandonment rate, ring time and recorded
New provisions to restrict
The amended TSR includes new provisions to restrict unauthorized
- The amended Rule expands the
requirement that a seller or telemarketer obtain a consumer's
express verifiable authorization to be billed, to cover any payment
method that does not already afford the consumer the liability
limits and dispute resolution protections of the Fair Credit Billing
Act or the Electronic Funds Transfer Act.
- When the written confirmation method
of obtaining express verifiable authorization is used, the
confirmation must be sent, via first class mail, in an envelope
clearly labeled as a confirmation. The written confirmation method
is not allowed when a seller or telemarketer possesses pre-acquired
account information and offers the goods or services on a
free-to-pay conversion basis - that is, when the consumer is allowed
to try out the goods or services for free for a limited time and
then be charged automatically.
- When the oral authorization method
of express verifiable authorization is used, two additional pieces
of information must be provided to the customer or donor: the
billing information, in specific, understandable terms so the
customer knows he will be billed; and the date the charge will be
submitted for payment.
- Telemarketers are not allowed to
traffic in unencrypted consumer account numbers for telemarketing.
You may not buy or sell unencrypted consumer account numbers.
- Telemarketers must obtain the
consumer's "express informed consent" before submitting a charge for
payment. The new TSR specifies that unauthorized billing is an
- In transactions involving
pre-acquired account information and free-to-pay conversion offers,
a company can obtain "express informed consent" only by doing all
three of the following: 1) obtaining the con-sumer's express
agreement to be charged using a particular account number; 2) re-quiring
the consumer to recite at least the last four digits of the account
number to be charged; 3) making an audio recording of the entire
telemarketing transaction not just a verification after the initial
New provision to require caller ID
When the amended TSR goes into effect, telemarketers will be required
to transmit their telephone number, and if possible, their name, to
consumers' caller ID services. While it is technologically possible to
transmit callers' numbers nearly everywhere now, transmission of
callers' names may not be available everywhere yet. Transmission of
callers' ID information will enable consumers to know who is calling.
This provision will take effect one year after the release of the
What provisions remain in the TSR?
The following provisions of the TSR have not changed:
- Telemarketers and sellers still may
call consumers only between 8 a.m. and 9 p.m.
- Telemarketers still must promptly
identify themselves as a seller and explain that they're making a
sales call before pitching a product or service.
- Telemarketers still must disclose
all material information about the goods or services they are
offering and the terms of the sale. Misrepresenting any terms or
conditions of the sale is still prohibited.
For more information on the
Telemarketing Sales Rule, visit
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