Recent Amendments to FTC’s Telemarketing Sales Rule

Recently, 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. 

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 November’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 November’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.

Telemarketers:
Stay Attuned to Evolving Regulations

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.