FTC rule on telemarketing sales effective Feb.12
WASHINGTON (12/15/15)--Final amendments to the Federal Trade Commission's (FTC) Telemarketing Sales Rule (TSR) were published Monday in the Federal Register. They go into effect, for the most part, Feb. 12.
The TSR does not apply to federal credit unions. However, it does apply to state-chartered credit unions and third-party telemarketers, whether hired by a federal or state-chartered credit union.
The rule changes, proposed in 2013, are intended to protect consumers from deceptive or abusive practices in telemarketing. They were mandated under the Telemarketing and Consumer Fraud and Abuse Prevention Act.
The amendments prohibit the use of four types of payment methods by telemarketers and sellers: remotely created checks, remotely created payment orders, cash-to-cash money transfers and cash reload mechanisms.
The new rule also expands the prohibition against advanced fees for recovery services to include recovery of losses in any previous transaction.
In addition, the TSR amendments update several provisions related to the national Do Not Call (DNC) Registry to, among other things:
Expressly state that a seller or telemarketer has to demonstrate that it has an existing business relationship with, or has received an express written agreement from, a consumer it calls if the consumer’s number is on the DNC Registry;
Illustrate the types of burdens that deny or interfere with a consumer’s right to be placed on a seller’s or telemarketer’s entity-specific do-not-call list;
Specify that if a seller or telemarketer does not get the information needed to place a consumer’s number on its entity-specific do-not-call list, the seller or telemarketer is disqualified from the safe harbor for isolated or accidental violations; and
- Emphasize that sellers are prohibited from sharing the cost of the fees to access the DNC Registry.
In an August 2013 comment letter, CUNA urged the FTC to craft its rule carefully to limit the impact of its regulatory reach on legitimate payment activities that meet consumers’ needs and support their daily activities.
CUNA also recommended the agency coordinate with other regulators to increase consumer awareness about telemarketer fraud, and to further research fraudulent schemes and methods.
The DNC Registry related changes are effective Feb. 12. The payment prohibitions become effective June 13.