Telemarketing Software Featured Article

FTC and Telemarketing: Cracking Down on Legalities and Inaccuracies

December 10, 2009
By Kelly McGuire - Telemarketing Software Editor

It’s no surprise that the Federal Trade Commission, or “FTC (News - Alert),” has to stay on their toes in regards to keeping telemarkers in line in terms of regulations, rules and legalities. 

Since VanillaSoft’s telemarketing software channel’s inception, the FTC has been altering the Telemarketing Sales Rule, or “TSR (News - Alert),” in efforts to create a concise operational platform for the entire telemarketing industry. 

And, in June of this year, the FTC filed lawsuits against three companies that were attempting to sell some questionable auto warranties. The lawsuit made headlines after the FTC cracked down on several Florida-based real estate companies for making large amount of robocalls earlier in 2009.

In keeping up with the news, new regulations went into effect on September 1, 2009 that will ban almost all robocalls. And, regarding the three lawsuits filed in June, the courts have granted the FTC its request to temporarily shut down the three telemarketing companies. 

Claiming that the companies made illegal pre-recorded sales calls, the action states that these three companies did not negotiate lower rates. 

According to FTC reports, JPM Accelerated Services, one of the three companies in question, and its affiliate operations reportedly charged anywhere from $495 to $995 upfront for negotiating the lowest possible interest rate, but consistently failed to get reductions for its customers. 

Following suit – no pun intended – Fort Lauderdale's Transcontinental Warranty Inc. agreed to a $24 million settlement with the Federal Trade Commission for the same false promises of low interest rates. Currently, the company is out of business and the judgment was suspended due to inability to pay.

In addition, separate suites were filed in Georgia against Economic Relief Technologies LLC, and in Illinois against Dynamic Financial Group USA. Both companies had multiple affiliates, some based in Florida.

It’s evident that the telemarketing industry is booming with controversy over the validity of the profession and, even worse, the quality of services associated with companies in this industry. What lies ahead for the future of telemarketing, it’s too early to tell. But one thing is certain: the FTC is doing its best to quality control for the general public. 

Kelly McGuire is a TMCnet Web editor, covering CRM and workforce technologies, and anchor of its daily TMC Newsroom video broadcast. Kelly also writes about eco-friendly "green" technologies and smart grids, compiling TMCnet's weekly e-Newsletters on those topics, as well as the cable industry. To read more of Kelly's articles, please visit her columnist page.

Edited by Kelly McGuire