Let’s Reconnect Over The Telemarketing Sales Rule

November 18, 2024
Andrew Cove

The Telemarketing Sales Rule (TSR) regulates telemarketing activities in the United States. It protects consumers from deceptive and abusive telemarketing practices while establishing guidelines for telemarketers’ operations. Understanding the TSR is key for businesses engaged in telemarketing to stay compliant and avoid penalties.

What the TSR Is & What It Requires

The TSR applies to telemarketing campaigns involving multiple interstate calls to sell products and services or collect charitable donations. This includes any plan, program, or campaign initiated to persuade consumers to buy or donate over the phone. Unlike the Federal Communications Commission (FCC), which oversees interstate and intrastate calls, the FTC focuses on interstate telemarketing. The TSR covers calls originating inside or outside the United States as long as they target U.S. consumers.

Telemarketers must follow specific disclosure rules, such as providing clear and truthful information about the products or services. Before a consumer decides to make a purchase or a donation, the telemarketer must disclose key details, including the total cost and terms of the sale. Failing to provide these disclosures in a clear and obvious way is considered deceptive, and penalties can be imposed for each violation.

The TSR also has specific requirements for telemarketers who accept payments through methods other than credit or debit cards. In these cases, telemarketers must get express, verifiable authorization from consumers. Furthermore, they must keep certain records, such as sales and employee records, for two years to show compliance. For calls on behalf of non-profit charities, telemarketers known as “telefunders” must make prompt disclosures, obtain payment authorization, and allow an opt-out option in prerecorded messages.

However, specific organizations, such as non-profits and common carriers like long-distance phone companies and airlines, are exempt from the TSR. Additionally, businesses outside FTC jurisdiction, such as banks and federal credit unions, are not subject to the TSR. However, companies these entities hire to conduct telemarketing must still comply with the rule.

Tips For Remaining Compliant with the TSR

  • Check the National Do Not Call (DNC) Registry: The TSR requires telemarketers to verify their call lists against the DNC Registry. This list must be checked regularly to avoid unintentional violations, which can lead to significant penalties.
  • Follow Call Time Restrictions: Telemarketers can only call consumers between 8 a.m. and 9 p.m. local time. Calls made outside these hours are considered abusive practices under the TSR, so it’s essential to ensure all calling systems and employees are aware of these time restrictions.
  • Keep Accurate Records: Telemarketers must keep certain records for two years, including sales records, employee information, and consumer authorizations. These records provide a traceable compliance history and can be helpful if a business is audited or investigated.
  • Provide Required Disclosures Promptly and Clearly: All disclosures must be clear and noticeable. For example, telemarketers must disclose all conditions and restrictions in a prize promotion before describing the prize itself. Misleading statements or omissions can result in severe penalties, so accurate information is key.
  • Implement Opt-Out Mechanisms for Prerecorded Messages: Non-profit organizations using prerecorded calls to previous donors or members must include an easy opt-out mechanism. This can be a voice-activated option or a keypress, allowing consumers to remove themselves from future calls easily.
  • Avoid Misleading Statements and Misrepresentations: Telemarketers must not make false claims to encourage sales or donations. Misleading consumers to induce purchases or contributions goes against the TSR and results in significant fines.

For Compliance & Defense 

The TSR has specific rules for telemarketers, and staying compliant is a cost of doing business. Contact Cove Law for a free consultation and guidance on TSR requirements and other telemarketing regulations. 

Andrew Cove
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