On August 19, 2008, the FTC issued a Final Rule to amend the Telemarketing Sales Rule regarding prerecorded telemarketing. View the commission’s rule at http://www.ftc.gov/os/2008/08/R411001tsrfrn.pdf. Most of these regulations went into effect in the months following the rule, but the FTC granted a one-year grace period for telemarketers to continue making prerecorded calls to consumers with existing business relationships. That one-year period expired at the end of last month, meaning companies must comply with all provisions of the Final Rule by September 1, 2009.

WHAT HAPPENED:

Prior to this amendment, companies could deliver prerecorded messages to any consumer with whom they had an established business relationship without running afoul of the Telemarketing Sales Rule. The new rule, effective September 1, 2009, prohibits companies from delivering prerecorded messages to any consumers who have not previously agreed in writing to receive such calls. The amended rule does permit a seller to obtain agreements by any electronic means authorized by the ESIGN Act. The E-SIGN Act establishes that the use of an electronic record to provide information is sufficient as long as 1) the consumer has effectively consented; 2) the consumer, prior to consenting, received a clear and conspicuous statement informing the consumer of the option to have the record provided in a paper form, the right to withdraw consent, and whether the consent applies only to the immediate transaction; and 3) the consumer is provided a statement describing the system used to electronically store the information and signs electronically in such a way that demonstrates the consumer can access the information. Prerecorded informational calls, such as a message alerting a consumer of a loan due date or a message reminding a consumer of a scheduled appointment, are unaffected by this rule, but the FTC has cautioned against making sales calls under the guise of purported “informational” calls.

WHAT IT MEANS:

If your company does not engage in any telemarketing efforts using prerecorded messages, this rule change should have no effect on your operations. However, any company using prerecorded messages needs to ensure that it has obtained proper consent, either in writing or in compliance with the E-SIGN Act, from everyone on its call list. As of September 1, 2009, it is no longer sufficient to have an established business relationship with the consumer. Note that the commission has provided two exemptions from the requirements of the prerecorded call amendment: healthcare-related calls subject to HIPAA and charitable fundraising calls made by for-profit telemarketers to members of a non-profit charitable organization on whose behalf the calls are placed.

WHAT TELEMARKETERS SHOULD DO:

To ensure compliance with the Telemarketing Sales Rule, all companies engaged in telemarketing via prerecorded calls should take this opportunity to review all telemarketing policies.