The Telemarketing Sales Rule (TSR)

Issued by the FTC in 1995

FCC issued regulations under the Telephone Consumer Protection Act of 1991 (TCPA) that place

restrictions on unsolicited advertising by phone and facsimile.

Does not preempt stricter state laws

o Some states require marketer obtain a license or register w/state
o States can create their own DNC with differing exceptions/fines
o Some states may require that a written contract be created for certain transactions

May have private right to action via the intrusion on seclusion tort

Enforcement: FTC, state AGs, or private individuals

Defines telemarketing as a plan, program, or campaign which is conducted to induce the purchase of goods or services or charitable contribution, by use of one or more telephones and which involve more than one interstate telephone call

Created the U.S National Do Not Call (DNC) Registry enforced by the FTC, FCC, and state AGs

o Requires sellers and marketers to update their call lists every 31 days.
Exceptions to list:
- ▪ Nonprofits calling on their own behalf
- ▪ Calls to customers with existing business relationships (EBRs)
- ▪ Inbound calls, provided there’s no upsell of additional products/service
- ▪ Most business to business calls
- ▪ Consumer clearly and conspicuously opts in to calls
Telemarketers can avoid liability under the DNC safe harbor:
- - - Seller/telemarketer established and implemented written procedures to honor

consumers’ requests

▪ Seller/marketer has trained its personnel and any entity assisting in its

compliance

▪ Seller/telemarketer has maintained and recorded an entity specific DNC
▪ Seller/telemarketer uses and maintains records documenting DNC and National DNC within 31 days of call
▪ Seller/telemarketer monitors and enforces compliance with entity’s DNC procedures
Violations: civil penalties up to $40,654/call

TSR requires covered orgs to:

o Call only between 8am and 9pm
o Screen and scrub names against national DNC list
o Display caller ID info
o Identify themselves and what they are selling
o Disclose all material info and terms
o Comply with special rules for prizes and promotions
o Respect requests to call back
o Retain records for at least 24 hours
o Comply with special rules for automated dialers

Required disclosures before delivering sales content:

o Identity of seller
o Purpose of the call is to sell goods/services
o Nature of goods/services
o No purchase or payment is necessary to participate to win prize/promotion and does
not increase chances of winning

Ten broad categories of info that must always be disclosed:

o Cost and quantity
o Material restrictions, limitations, conditions
o Performance, efficacy, central characteristics
o Refund, repurchase, or cancellation policies
o Material aspects of prize promotions
o Material aspect of investment opportunities
o Affiliations, endorsements, or sponsorships
o Credit card loss protection
o Negative option features
o Debt relief services

Call Abandonment expressly prohibited: telemarketer does not connect the call to a live sales

rep within two seconds of the person’s completed greeting. Pre-recorded sales pitches are not

allowed (must have opt in from consumer)

o Abandonment Safe Harbor:
- - ▪ Use tech that ensure abandonment of no more than three percent of all calls answered by live person measured per day per calling campaign
  - ▪ Allows telephone to ring for 15 seconds or four rings before disconnecting unanswered call
  - ▪ Plays recorded message stating name and phone number of seller on whosebehalf the call was placed whenever a live sales rep is unavailable w/in 2 secs of a live person answering
  - ▪ Maintains records documenting adherence to the preceding three reqs

Requires sellers and telemarketers to keep substantial records:

o Advertising and promotional materials
o Information about prize recipients
o Sales records
o Employee records
o All verifiable authorizations or records of express informed consent or express
agreement

For each record above, sales records must include:

o The name and last known home address of each customer
o Goods or services to be purchased
o The date the goods or services were shipped/provided
o The amount the customer paid for goods/services
For all former and current employees involved in sales above:

o Their name
o The last known home address and phone numberCIPP/US Outline
o Job titles

Other provisions to address:

o Credit card laundering
o Telemarketing sales of credit repair programs, loss recovery services and advance loans
o Telefunding activities (for-profit companies that call on behalf of charitable orgs)

The Telephone Consumer Protection Act of 1991 (TCPA)

Enforced by the FCC

Prohibits unsolicited commercial fax transmissions

o Penalties: private right of action and statutory damages of up to $500/fax

Preempts interstate regulation

Does not preempt within states (CA attempted to eliminate the EBR requirement)

Updates to the Telephone Consumer Protection Act (TCPA)

o Even if a company has an EBR, it is required to receive prior express written consent for all robocalls to residential lines.
o Consumers allowed to opt out of future robocalls during a robocall
o Robocalls to residential lines made by healthcare related entities governed by HIPAA are exempt from these requirements (Ex: CVS pharmacy robocall)
o Robotexts require express consent

▪ Consent can be revoked at any time by any reasonable means

▪ The mere fact that a consumer’s wireless number appears in the contact list of

another wireless customer is not sufficient to establish consent

▪ When a caller has consent for a wireless number and the number has been

reassigned, the caller is not liable for the first call but will be liable for subsequent calls if the new consumer makes the caller aware of the change

The Junk Fax Prevention Act of 2005 (JFPA)

• Consent required for commercial faxing

• Consent can be inferred from an EBR and it permits sending of commercial faxes to recipients

based on EBR as long as the sender offers an opt out in accordance with the act

• EBR has same definition as FTC’s DNC rule

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