FTC Seeks Comments on Proposed TSR Amendment On Call Abandonment

The FTC today announced that it will publish a notice in the Federal Register next week seeking comment on a proposal to modify the Telemarketing Sales Rule (TSR) to allow telemarketers to use prerecorded messages when they call consumers with whom they have an established business relationship. The Commission also determined to include in the Federal Register notice a policy statement indicating that, pending completion of the amendment proceeding, the Commission will not initiate an enforcement action against a seller or telemarketer for using recorded messages in calls to established customers if it does so in conformity with the proposed amendment to the TSR.

Currently, the TSR's "call abandonment" provisions provide that a telemarketer may use a prerecorded message - rather than a live sales representative - in no more than three percent of the calls answered by a live consumer, not an answering machine. There is currently no exception for calls delivering prerecorded messages to consumers with whom the seller has an established business relationship, although the Federal Communications Commission's similar regulations have such an exception. A telemarketing firm, Voice Mail Broadcasting Corporation (VMBC), petitioned the FTC to modify the TSR, arguing that such a change would make the rules of the two agencies more consistent, yet would not expose consumers to the abusive practices the TSR's call abandonment provisions are designed to prevent - "hang-up" calls and "dead air."

VMBC's petition asks that the Commission allow telemarketers to use prerecorded telephone messages solely in calls to consumers with whom the seller has an established business relationship. Under VMBC's scenario, the prerecorded messages would give the called party an opportunity to ask to be placed on the specific caller's Do Not Call list - which, under the TSR, sellers and telemarketers are required to compile as a backstop to the National Do Not Call Registry. These messages would allow the called party to speak to a sales representative by, for example, pressing a button on the telephone keypad during the message or calling a toll-free number, or would permit the called party to make a Do Not Call request via an automated system.

The Commission has proposed to amend the TSR along the lines requested by VMBC because the harms that the call abandonment provisions were intended to remedy seem unlikely to arise from telemarketing campaigns that VMBC describes. Nevertheless, the Commission's Federal Register notice will seek comment specifically on the appropriate and effective means to insure that consumers' ability to assert an entity-specific Do Not Call request is preserved when they receive telemarketing calls using prerecorded messages. The notice will emphasize that asserting an entity-specific Do Not Call request should be no more difficult in the case of prerecorded message telemarketing than it is in the case of telemarketing that uses live sales representatives. The comment period on this notice of proposed rule making will be open until January 10, 2005.

The Federal Register notice will also address a petition from the Direct Marketing Association (DMA) asking the Commission to revise the TSR's existing call abandonment safe harbor provision, which requires telemarketers to use "technology that ensures abandonment of no more than three percent of all calls answered by a person, measured per day per calling campaign." DMA asked the Commission to substitute "measured over a 30-day period" instead. The Commission invites comments on whether such a change is warranted.

Written comments should refer to "Prerecorded Message EBR Telemarketing, Project No. R411001" both in the text and on the envelope, and should be mailed to the following address: Federal Trade Commission/Office of the Secretary, Room H-159 (Annex K), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Comments containing confidential material must be filed in paper form. The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments also may be sent electronically by using the Web-based form at the following Web link: https://secure.commentworks.com/ftc-tsr. Comments must be received by January 10, 2005.

The Commission vote authorizing staff to publish the Federal Register notice was 5-0.

Copies of the Federal Register notice are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), 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 at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. R411001)