The telemarketing sales rule (TSR) is a Federal Trade Commission (FTC)-administered rule to protect consumers from abusive and deceptive telemarketing tactics. Signed into law under the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994, the TSR mandates disclosures by telemarketers, prohibits misrepresentations, puts time constraints on calling, and imposes payment limits on some goods and services.
Other options include state-level law and the National Do Not Call Registry, which provides consumers additional protection against unsolicited solicitations.
TSR efficiency
- In the last fiscal year, over 4.2 million people added their phone numbers, bringing the total to over 253 million actively registered numbers.
- Complaints of unwanted telemarketing calls have decreased by more than 50% since 2021, demonstrating the TSR’s efficacy.
Don’t fall prey
The telemarketing sales rule is central to our anti-fraud efforts and prevents consumers from being victimized by aggressive and deceptive sales practices.
This strengthens the rule’s significance in maintaining consumer confidence and market integrity.
On the wrong side of the law?
In 2024, the FTC imposed a $29 million penalty on Day Pacer, a telemarketing company accused of making millions of harassing calls to individuals on the Do Not Call Registry. The company appealed the penalty, setting up a court battle highlighting the challenge of enforcing the TSR. An appeals court later ordered a recalculation of the damages, highlighting the need for accuracy in such computations.
In another case, in 2016, a jury in the federal court in Utah ruled in the FTC’s favor against three Utah businesses and their owner. The defendants had run deceptive telemarketing campaigns, making over 117 million illegal calls to consumers, violating the TSR. This high-profile enforcement action demonstrated the FTC’s dedication to enforcing the TSR and protecting consumers from deceptive telemarketing.
Meeting all the requirements
Challenge: A few primary challenges businesses must face are complying with the TSR’s broad requirements.
Solution:
- Educate all telemarketing staff on TSR rules so that they understand and adhere to the regulations.
- Invest in technology that automatically filters out numbers on the Do Not Call Registry and monitors calling practices.
- Conduct frequent reviews of telemarketing practices to identify and rectify potential compliance issues early.
Stay on top of things
- Monitor FTC updates on the TSR regularly to remain abreast of any changes or amendments.
- Consult with legal advisors specializing in telemarketing law to ensure all practices comply with federal and state legislation.
- Embrace a consumer-first mentality and ensure all telemarketing activities are respectful, transparent, and TSR-compliant.
