This month, the Federal Trade Commission (the "FTC" or "Commission") made several revisions to the Do-Not-Call regulations contained in its Telemarketing Sales Rule ("TSR"), as well as additional amendments to its business-to-businesses exemption and oral verification recording requirements.
How do these changes affect telemarketers?
Do-Not-Call Regulations Amended
The FTC's recent rulemaking contains three separate amendments with respect to Do-Not-Call regulations.
First, the FTC did away with the traditional safe harbor protections afforded to telemarketers and sellers for inadvertent entity-specific Do-Not-Call violations, unless such parties are able to obtain the information necessary from the consumer to honor an internal Do-Not-Call request. Additionally, the amendment adds illustrative examples of the types of burdens the Commission regards as impermissibly interfering with a consumer's right to be placed on a seller's internal Do-Not-Call list, including:
- harassing consumers who make such a request;
- hanging up on such consumers;
- failing to honor the request;
- requiring the consumer to listen to a sales pitch before accepting the request;
- assessing a charge or fee for honoring the request;
- requiring the consumer to call a different number to submit the request; and
- requiring the consumer to identify the seller or charitable organization making the call or on whose behalf the call is made.
Second, the amended TSR regulations expressly state that sellers and telemarketers bear the burden of demonstrating when a seller has an existing business relationship ("EBR") with a customer whose number is listed on the National Do-Not-Call Registry, or has obtained the customer's express written consent to receive such calls.
Third, although the FTC previous banned the sharing or division of costs for accessing the National Do-Not-Call Registry, this month's rulemaking forbids signing up to access the Registry and, before ever actually accessing it, selling or transferring the registration for consideration to others seeking Registry access.
Additional Oral Verification Recording Requirements
The FTC previously permitted the use of an audio recording to memorialize a consumer's oral authorization of a charge for a telemarketing transaction if payment was not made by credit or debit card, provided that the telemarketer also made certain disclosures to the consumer. With this month's revisions, TSR regulations now require telemarketers and sellers to include a clear and conspicuous description of the material terms and conditions in the recording of the featured goods, services or charitable donation for which payment is sought.
The FTC adopted this additional disclosure requirement because "the Commission's law enforcement experience shows that some sellers and telemarketers appear to have omitted this information intentionally from their audio recordings to conceal from consumers the real purpose of the verification recording and the fact that they will be charged."
Business-to-Businesses Exemption Amended
Under the pre-existing TSR regulations, telephone calls between a telemarketer and "any business" were exempted from Commission regulations.
With the recent rulemaking, the FTC has clarified that the business-to-business TSR exemption applies only to "telephone calls between a telemarketer and any business to induce the purchase of goods or services or a charitable contribution by the business." As such, this exemption does not apply to telemarketing solicitations for personal purchases or contributions by employees of a business.
Protect Your Telemarketing Business
In recent months, the FTC, Federal Communications Commission ("FCC") and federal courts have revised and reinterpreted a number of regulations related to the Telephone Consumer Protection Act ("TCPA"). Sellers and telemarketers should ensure that they stay attuned to the TCPA and its implementing regulations as they continue to evolve.
If you are interested in learning more about this topic, or need to review your telemarketing practices, please e-mail us at firstname.lastname@example.org, or call us at (212) 246-0900.
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