What is the Telemarketing Sales Rule?
The Telemarketing Sales Rule (TSR) was enacted in 1995 and has been amended several times, most recently in 2015. The TSR gives the Federal Trade Commission (FTC) and state attorneys general tools to combat telemarketing fraud, gives consumers added privacy protections and defenses against unscrupulous telemarketers, and helps consumers tell the difference between fraudulent and legitimate telemarketing.
Any business or individual that utilizes telemarketing must comply with the TSR. The TSR defines telemarketing “as a plan, program, or campaign to induce the purchase of goods or services or a charitable contribution involving more than one telephone call.”
Tax-exempt non-profit charities that conduct their own telemarketing are not covered by the TSR. For-profit telemarketers soliciting on behalf of non-profit charities must follow the Telemarketing Sales Rule regulations.
Achieving TSR Compliance
To comply with the TSR, telemarketers must meet multiple requirements, including:
Disclose Material Information
During a call initiated by a telemarketer, the following information must be provided to the consumer:
- The identity of the seller
- That the purpose of the call is to sell goods or services.
- The nature of the goods or services being offered
- In the case of a prize promotion, no purchase or payment is necessary to participate or win, and that a purchase or payment does not increase the chances of winning.
For calls on behalf of a charity, the following information must be disclosed:
- The identity of the charitable organization on whose behalf the solicitation is being made.
- That the purpose of the call is to solicit a charitable contribution.
Protecting Consumer Privacy
The TSR prohibits sellers and telemarketers from engaging in certain abusive practices that infringe on a consumer’s right to be left alone. The TSR’s privacy protections include prohibitions on:
- Calling a person whose number is on the National Do Not Call Registry or a person who has asked not to get telemarketing calls from a particular company or charity.
- Misusing a Do Not Call list
- Denying or interfering with a person’s Do Not Call rights
- Prerecorded messages to a person without that person’s express written agreement to receive such calls, and without providing an automated interactive opt-out mechanism
- Failing to transmit Caller ID information
- Using threats, intimidation, or profane or obscene language
- Causing any telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass
Call Time Restrictions
Telemarketing calls to the person’s home must be made between the hours of 8 a.m. and 9 p.m. local time at the location called. A telemarketer can make a call outside of that window if they have the person’s prior consent to do so.
The TSR prohibits telemarketers from abandoning any outbound telephone call. A call is considered “abandoned” if a person answers it and the telemarketer does not connect the call to a sales representative within two seconds of the person’s completed greeting.
In sales transactions, the TSR prohibits telemarketers from making false or misleading statements about the following:
- Cost and quantity
- Material restrictions, limitations, or conditions
- Performance, efficacy, or central characteristics
- Refund, prepurchase, or cancellation policies
- Material aspects of prize promotions
- Material aspects of investment opportunities
- Affiliations, endorsements, or sponsorships
- Credit card loss protection
- Negative-option features (that a consumer will be charged unless they take an affirmative action to avoid the charges)
- Debt relief services
The Risks of Non-compliance
Organizations that violate the TSR face civil penalties of up to $50,120 for each violation. Violations may also result in penalties that prohibit certain conduct and having to pay restitution to impacted consumers.
The FTC, state Attorneys General, and private citizens can initiate TSR enforcement actions. Private citizens may bring an action to enforce the TSR if they have suffered $50,000 or more in actual damages.
How We Can Help
CompliancePoint has a team of marketing compliance experts that use industry-leading technology to help customers achieve and maintain TSR and TCPA compliance. They will work with your organization to identify any gaps or deficiencies in your existing marketing program that could lead to unnecessary risk exposure. They will then guide you through the implementation of policies and procedures to mitigate those risks.
We offer a wide range of monitoring services designed to help organizations stay in compliance on an ongoing basis.
Failure to comply with relevant Telemarketing requirements can have a devastating impact on your organization. Don't take chances, let the experts at CompliancePoint help.