FTC Telemarketing Sales Rule Marks Fifth Anniversary

The Federal Trade Commission today announced the results of five years of enforcement of the Telemarketing Sales Rule ("TSR"), which was mandated by Congress through the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994 and has been in effect since December 31, 1995. During the Rule's first five years, the Commission (or the U.S. Department of Justice, acting on its behalf) brought 121 law enforcement actions alleging Rule violations. Three-quarters have been concluded, resulting in injunctions against misrepresentations and future violations of the Rule, outright bans against some or all forms of telemarketing in some cases, and monetary judgments totaling more than $152 million in consumer redress and $500,000 in civil penalties.

The TSR requires telemarketers to make specific disclosures of material information; prohibits misrepresentations; limits the hours that telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets payment restrictions for the sale of certain goods and services. The Act also authorizes state attorneys general to enforce the Rule in federal court.

"The states have brought many Rule enforcement actions during the last five years, both on their own and with the FTC as co-plaintiff," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "The TSR effectively put 50+ cops on the beat."

The law enforcement actions have attacked a variety of telemarketing scams. Some defendants promised loans and credit cards for an advance fee, but never delivered. Others misled consumers by telling them that they were not currently protected against credit card fraud, and mistakenly claimed that if the consumers did not purchase their services, they could be held liable for all unauthorized charges made with their cards. Some defendants operated travel scams, misrepresenting the total cost of the vacation travel package offered, and failing to disclose material restrictions on the use of the package, such as requiring attendance at timeshare sales presentations. Still others engaged in phony prize promotions, fraudulently offering purportedly valuable prizes to consumers to induce them to purchase products.

Copies of the news releases and other documents pertaining to previous Telemarketing Sales Rule cases are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center. Copies of telemarketing brochures for consumers and businesses are available online. Copies of the complaints and judgments filed in the above actions are available from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form. The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

Mitchell J. Katz,

Office of Public Affairs

202-326-2161

Allen W. Hile,

Bureau of Consumer Protection

202-326-3779