Telemarketing Sales Rule: We asked. You answered. We heard you.

The FTC has proposed some changes to the Telemarketing Sales Rule and would like your feedback. But that’s not all. Commenters raised a number of other issues about TSR compliance and enforcement. So the FTC is publishing a separate Advance Notice of Proposed Rulemaking seeking your input on whether additional changes are warranted to strengthen the protections of the Rule. Both Notices merit your attention, especially proposals that specifically address the impact misleading telemarketing has on small businesses.

Notice of Proposed Rulemaking. As part of our regulatory review of the TSR, we asked for your comments about how the TSR is working. You’ll want to read the Federal Register Notice for details, but based on what we heard from consumers, businesses, and others, we’re proposing to extend the TSR’s prohibition on material misrepresentations and false and misleading statements to business-to-business calls. Right now the TSR exempts most B2B telemarketing calls. (More about that in a minute.) But decades of FTC law enforcement experience demonstrates that businesses – especially small businesses – continue to be a prime target for unscrupulous telemarketers, resulting in hundreds of millions of dollars of financial injury due to imposter fraud and other forms of B2B deception. The proposed change would give the FTC and other agencies an important new enforcement tool for protecting small businesses.

Another proposed change would require telemarketers to keep more accurate records about their activities. Comments from government agencies – and the experience of FTC staff – suggest that many telemarketers don’t retain records about their practices. So when the time comes to go to court to protect consumers from illegal telemarketing, some defendants’ “Records? What records?” response can make it harder to enforce the law. In addition to specifying the information companies would need to keep, the proposed amendment to the TSR would establish that the failure to retain any required record would – in and of itself – violate the Rule.

Advance Notice of Proposed Rulemaking. People who responded to the TSR regulatory review raised a number of other issues related to protecting consumers and small businesses from unfair and deceptive practices. So in addition to the Notice of Proposed Rulemaking, the FTC has issued a new Advance Notice of Proposed Rulemaking asking for your feedback about some other possible Rule changes. Again, you’ll want to read what’s in the Federal Register, but the FTC is seeking your thoughts on these questions:

1. Should the FTC more broadly repeal the TSR’s exemption for B2B telemarketing calls?
2. Should the TSR apply to calls consumers make to sellers or telemarketers selling tech support services? and
3. Are additional TSR provisions needed to protect consumers from deceptive negative option programs – for example, should the Rule mandate specific notice requirements and a simple cancelation mechanism?

Both Federal Register Notices include instructions on how to make your voice heard, including an easy online public comment process. Let us know what you’re thinking about the Notice of Proposed Rulemaking and the Advance Notice.