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FTC's Early Christmas Present Arrives in Telemarketing Rule Changes

December 22, 2015
By Steve Anderson - Contributing Writer

With just a few days left until Christmas, the sales are winding down, and the industry is settling in for the returns rush and gift card frenzy that commonly follows the biggest part of the holiday shopping season. A new report from Lexology takes a look at a Christmas gift to telemarketers in new rule changes to the FTC (News - Alert)'s Telemarketing Sales Rule (TSR), and whether it will be Santa Claus's greatest gift or a white elephant the telemarketing industry would rather re-gift elsewhere.

The process started back in July 2013, as a public comment period was offered up for users to weigh in, and the process of retooling initial projections began. On November 18, 2015, the FTC's final rule setting emerged, and now a closer look at the rules has emerged. One of the biggest changes is to “novel payment methods,” including cash-to-cash transfers, cash reload systems, and remotely-created issues like checks and payment orders. These are now forbidden for use in telemarketing, mainly because such tools were frequently misused. The created issues were, as FTC Bureau of Consumer director Jessica Rich noted, “...tough to trace and hard for people to reverse.” Charging fees in advance to recover from telemarketing scams is also forbidden.

Changes were also made to the do-not-call list provisions; the “existing business relationship” (EBR) must be clear and provable, or the telemarketer must have an express written agreement (EWA) to receive calls if the subject is on the Do Not Call (DNC) Registry. This was a point that some regarded as self-evident, but the FTC wanted it more clearly on record.

Further, chances forbade consumers being unduly burdened when added to an internal DNC; no last-ditch sales pitches, fees for addition, or the like were allowed. Telemarketers are now required to obtain express verifiable authorization for processing payments that don't involve a credit or debit card. Finally, clarification on the business-to-business exemption came out, noting that it applied only to the business entity, not to its employees.

As someone who used to receive a wide array of calls from telemarketers, but has seen this number crash through the floor in recent years, the changes don't seem particularly onerous, at least not to the people who'd be receiving telemarketing calls. Those who make such calls may find these restrictions a bit tight, but for the most part much of this shouldn't be a problem for operations already behaving with some level of scruples. Some of these protective measures simply needed to be codified, and now that protection is quite clearly in place.

It should be a welcome early Christmas present for those who receive such calls, and though it likely won't be such good news for unscrupulous telemarketing organizations, that by itself is also welcome news.


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