Nearly two years after it issued proposed rules, the Federal Trade Commission (“FTC”) has adopted final amendments to the Telemarketing Sales Rule (“TSR”) dealing with prerecorded messages and abandoned calls. These amendments make the rules governing prerecorded messages significantly more restrictive than the current rules.

I. Prerecorded Messages

The amended rules prohibit any “outbound telephone call that delivers a prerecorded message” unless (1) the seller has an express written agreement from the recipient of the call to receive prerecorded messages; (2) the message includes certain disclosures within two seconds after the completion of the called party’s greeting; and (3) the caller provides an opt-out mechanism (using either voice or keypad) to allow the person to place him- or herself on the seller’s company-specific do-not-call list.

The provision requiring an express agreement does not become effective until September 1, 2009. Until that time, the FTC will allow prerecorded messages to those with whom the caller has an established business relationship (“EBR”). The provisions requiring the disclosures and the opt-out mechanism become effective December 1, 2008 (even for EBR prerecorded calls).

Written Agreement to Receive Calls: The agreement to receive prerecorded messages must be in writing. In addition, the agreement must meet these requirements:

  1. The seller must obtain the consumer’s agreement to receive prerecorded message calls after it makes a clear and conspicuous disclosure that the purpose of the agreement is to authorize the seller to place prerecorded calls to the consumer;
  2. The seller must obtain the agreement without requiring, directly or indirectly, that the agreement be executed as a condition of purchasing any good or service;
  3. The agreement must evidence the willingness of the consumer to receive calls that deliver prerecorded messages by or on behalf of a specific seller; and
  4. The agreement must include the consumer’s telephone number and signature.

The rules allow the signature to be obtained electronically or digitally as long as it is otherwise recognized as a valid signature under applicable federal or state contract law.

The requirement to obtain an agreement applies only to calls to “induce the purchase of goods or services.” It does not apply to outbound calls that seek a charitable contribution, “information only” calls (e.g., calls to notify persons that their flight has been cancelled), or business-to-business calls.

Required Disclosures in Prerecorded Messages: All prerecorded messages that induce the purchase of a good or service must, within two seconds after the completed greeting of the person called, disclose the following:

  1. The identity of the seller;
  2. That the purpose of the call is to sell goods or services;
  3. The nature of the goods or services; and
  4. If a prize promotion is offered, that no purchase or payment is necessary to be able to win a prize or participate in a prize promotion and that any purchase or payment will not increase the person’s chances of winning.

Prerecorded calls that induce a charitable contribution from a nonprofit charitable organization’s member or previous donor must include the following disclosures within two seconds after the completed greeting of the person called:

  1. The identity of the charitable organization on behalf of which the request is being made; and
  2. That the purpose of the call is to solicit a charitable contribution.

Opt-Out Mechanism in Prerecorded Messages: For prerecorded calls that either induce the purchase of goods or services or that induce a charitable contribution, the call must include, immediately after the required disclosures, an opt-out mechanism. If the call could be answered in person by a consumer then the person called must be able to use an automated interactive voice and/or keypress-activated opt-out mechanism to assert a company- specific do-not-call request. If the call could be answered by an answering machine or voicemail service, then it must allow the person called to use a toll-free telephone number to add him or herself to the company-specific do-not-call list.

The prerecorded message rules do not apply to any outbound call from a covered entity or its business associate that delivers a prerecorded healthcare message, as defined under HIPAA privacy rules found at 45 C.F.R. § 160.103.

II. Abandoned Calls

The FTC also amended the method callers must use to measure the abandonment rate. This part of the rule becomes effective on October 1, 2008, and provides that abandoned calls shall be “measured over the duration of a single calling campaign, if less than 30 days, or separately over each successive 30-day period or portion thereof that the campaign continues.” The TSR previously required the abandonment rate to be measured on a per-day per-campaign basis.