It’s time to review the Telemarketing Sales Rule, the Federal Trade Commission has announced.
Enacted in 1995, the Telemarketing Sales Rule (the Rule) has been frequently updated over the years, including the addition of the Do Not Call Registry in 2003 and the changes made in 2008 and 2010. Last year, the agency proposed amendments to the Rule that would ban certain payment methods that are commonly used by “con artists” and scammers. They include unsigned checks, “payment orders” that have been “remotely created,” “cash-to-cash” money transfers, and “cash reload” mechanisms.
The review is part of the agency’s ongoing check-up of its rules and regulations as the FTC considers whether the Rule should be amended or improved. The agency first asked for general comments on the Rule, whether there is a continuing need for the Rule, and what kind of impact it has on consumers, industry members, and small businesses.
The agency then requested public comment on three specific issues, including the use and sharing of pre-acquired account information in telemarketing and inbound calls from consumers responding to negative option and free trial offers in combination with media ads.
Specifically the Commission asked whether it should “consider a prohibition on any use of pre-acquired account information in external upsells? If so, why? If not, why not, and what costs and burdens would such a requirement impose on businesses and consumers?”
The agency also queried: “Should telemarketers and sellers who receive inbound calls from consumers in response to general media ads for a negative-option product or service receive the same disclosures currently required for outbound telemarketing calls? Why or why not?”
Comments on the possibility of adding a requirement that sellers and telemarketers retain records of all calls placed were also requested.
To read the Federal Register notice of the FTC’s request for comment, click here.
Why it matters: In addition to general lines of inquiry about the continuing need for and effectiveness of the Telemarketing Sales Rule, the FTC centered its questions on the use and sharing of pre-acquired information, required disclosures for inbound calls for negative option and free trial offers, and possibly requiring telemarketers to keep records of calls placed. Industry members have until October 14 to file a comment.