The FTC just announced final updates to its telemarketing sales rules, including an important revision that will help protect small businesses from scammers who make false statements on B2B calls. But that’s not all. The FTC also announced a proposed amendment to the TSR that would extend coverage to inbound telemarketing calls involving technical support services, another call that causes harm to consumers.
First, review compliance. The Telemarketing Sales Rule has been in place since 1995 and applies to virtually all telemarketing activities, whether in the United States or making international sales calls to U.S. consumers. With limited exceptions, this rule applies to outbound calls made by telemarketers to consumers. The TSR makes it illegal to call most numbers on the Do Not Call Registry. It also bans the use of most prerecorded messages (robocalls), regardless of whether the number is on the Do-Not-Call registry. Additionally, telemarketers must make required disclosures during sales calls and are prohibited from making certain misrepresentations.
TSR New Final Amendment
The FTC regularly reviews the rules it enforces to ensure they keep pace with technological developments and changes in the marketplace. The just-announced amendments covering telemarketing protections against misrepresentations that B2B has called for are the result of a careful look at the current telemarketing landscape and a process of reviewing the public comments we received.
The original telemarketing sales rules did not cover business-to-business calls. The only exception was calls selling office and cleaning supplies—a category of B2B solicitations that the FTC deemed at the time “by far the most important business-to-business issue area.” Ask a small business owner today and they’ll likely tell you that scammers are reaching far beyond toner and paper towels, which is why the new final rule expands the prohibition against misrepresentation to include B2B telemarketing.
The final rule also modifies recordkeeping requirements for telemarketers. Let’s be clear: this isn’t just a paperwork issue. The updated recordkeeping requirements are directly related to the tools the FTC needs to respond to fraudsters taking advantage of new technologies to deceive and abuse consumers. The rule is explained as follows:
“Advances in technology have made it easier and cheaper for unscrupulous telemarketers to engage in illegal telemarketing, leading to a surge in spam calls. Bad actors are hiding their identities by using technology to ‘spoof’ or spoof call numbers,” the Commission said. It is more difficult to identify the responsible parties or obtain records of their illegal telemarketing activities. Technology also allows these bad actors to operate from anywhere in the world, creating additional challenges for the Commission’s enforcement efforts. “
To address these issues, the final rule requires telemarketers and sellers to preserve new categories of messages, which will make it more difficult for scammers to harm consumers and disappear into digital oblivion. An important tool in this fight is a new requirement that telemarketers and salespeople keep “call detail records” — including the date, time, duration of the call and the disposition of each call, or the number of calls made and received Number record. And, in case there was any doubt, the final rule also states that recordkeeping requirements apply to records related to companies that use artificial intelligence to imitate or clone voices used in telemarketing conversations. In fact, all provisions of the TSR apply to AI-enabled calls.
The final rule will take effect 30 days after publication in the Federal Register. The call detail recording requirements will take effect 180 days after publication.
Notice of Proposed Rulemaking Regarding Technical Support Services
The FTC also just issued a notice of proposed rulemaking to expand the scope of TSR to cover inbound telemarketing calls from consumers to technical support services. Some tech support scams start by calling consumers to warn them that their computers are infected. Other scammers use fake screen pop-up “alerts” to direct consumers to call a phone number to resolve purportedly serious problems with their computers. There are also scammers who pay security software companies so that when consumers call to activate their services, they are met by scammers who sell them unnecessary products.
Tech support scams are particularly harmful to older consumers, with those over 60 years old five times more likely than younger consumers to report financial losses from this form of fraud. But there is no doubt that scammers’ tactics have become so sophisticated that consumers of all ages are being victimized by a type of scam that one industry group has described as a “significant threat to consumers and businesses.”
You’ll need to read the proposed rulemaking for the details, but the main reason for the proposal is to give the FTC the legal tools it needs to crack down on tech support scammers in the wallet. The amendment would allow the FTC to ask courts to impose civil penalties and order restitution, creating a financial disincentive to this form of fraud and providing a means for injured consumers to receive refunds.
We want to hear what you think about the FTC’s proposal to take the fight against tech support scams to the next level. Once the notice of proposed rulemaking is published in the Federal Register, you will have 60 days to submit public comments.
