On March 7, 2024, the Federal Trade Commission (FTC) announced a final rule extending the Telemarketing Sales Rule (TSR) to cover business-to-business telemarketing calls, and updating the TSR’s recordkeeping requirements. The Commission also issued a notice of proposed rulemaking (NPRM) seeking to amend the TSR to extend its coverage to inbound telemarketing calls involving technical support services.
What is the Telemarketing Sales Rule?
The FTC initially adopted the TSR in 1995 to enforce the provisions of the Telemarketing and Consumer Fraud and Abuse Prevention Act (TCFAPA), which requires the FTC to issue regulations prohibiting deceptive and abusive telemarketing acts and practices. The statute itself includes few details concerning the practices the FTC enacted the TSR to cover, specifying only that it restrict late-night and early-morning calls, require disclosures, and prohibit coercive calls and those that abuse the consumer’s right to privacy.
The initial version of the Telemarketing Sales Rule went well beyond those few statutorily mandated provisions, and the FTC has regularly updated it to keep pace with technological and marketplace developments. In 2003, the TSR was amended to create the rules implementing the National Do-Not-Call Registry, as well as other new substantive requirements. In 2010, the FTC amended the rule again to impose special restrictions on the sale of debt relief services, and a 2016 amendment imposed further restrictions on payment methods often used by fraudulent sellers.
The current version of the TSR governs virtually every aspect of telemarketing and telemarketing sales transactions, although until recently it only applied to outbound telemarketing calls placed to consumers, with some notable exceptions.
The Final Revision to the Telemarketing Sales Rule
The final rule announced by the FTC stems from an NPRM announced in April of 2022 extending the Telemarketing Sales Rule’s protections to businesses, and the comments submitted by the public in response. The final rule updates the TSR by adding the following requirements:
- Lifting the Exemption on Business-to-Business Calls: The original TSR exempted B2B calls except for those selling office and cleaning supplies, which was apparently a significant issue at one time. The final rule expands the Telemarketing Sales Rule’s prohibitions against misrepresentations in B2B telemarketing calls.
- Expanded Recordkeeping Requirements: The final rule makes several modifications to the TSR’s recordkeeping amendments, which have remained unchanged since the Telemarketing Sales Rule was first enacted. The prior version of the rule required telemarketers and sellers to maintain call detail records, consent records, telemarketing scripts, prizes awarded, and other records for a period of 24 months from the date the record was produced. The new rule requires sellers and telemarketers to retain those records for a period of five years and describes additional records that must be kept for that period.
Notice of Proposed Rulemaking
The FTC also announced a new NPRM that calls for amending the Telemarketing Sales Rule to extend its coverage to inbound telemarketing calls involving technical support services. While the Telemarketing Sales Rule generally only applies to outbound calls from telemarketers, it also applies to certain categories of inbound calls made by consumers, such as those placed in response to advertisements for investment opportunities and debt relief services. The proposed amendment would add calls selling technical support services to that list.
