FTC discusses possible adjustments to telemarketing sales rules

On April 27, 2022, the Federal Trade Commission (FTC) unanimously approved a Notice of Proposed Rulemaking (NPRM) (and Notice of Proposed Rulemaking (ANPRM)) to make adjustments to the Telemarketing Sales Rule agency to 16 CFR Part 310 (RST). Among other things, the TSR “requires telemarketers to make specific disclosures of material information; prohibits misrepresentation; limits the hours telemarketers can call consumers; prohibits calls to a consumer who has requested not to be called back; and sets payment restrictions for the sale of certain goods and services.

The NPRM would, among other things, require telemarketers and salespeople to keep additional records of their telemarketing transactions, prohibit material misrepresentations and false or misleading statements in business-to-business (“B2B”) telemarketing transactions, and add a new definition for the term “previous donor”.

Regarding changes to the existing B2B exemption, the NPRM notes that “[s]Since 2003, the Commission has continued to see businesses harmed by deceptive B2B telemarketing,” citing a number of different forms “including systems that sell business directory listings, hosting or design services web, search engine optimization services and market-specific advertising opportunities, as well as schemes that impersonate the government. As a result, the agency “believes now is the time to reassess the B2B exemption and address the issues associated with B2B telemarketing.”

For now, the agency proposes to “require all B2B telemarketing calls to comply with the TSR’s existing prohibitions on misrepresentation set out in Sections 310.3(a)(2) and 310.3(a)(4) .” These provisions deal with “(1) several types of material misrepresentation in the 3 sale of goods or services; and (2) false or misleading statements to induce a person to pay for goods or services or to induce a charitable contribution.

However, under the separate ANPRM, the FTC is “seeking comments on the B2B exemption generally, including comments on whether the Commission should remove the exemption entirely.” The ANPRM would also consider other changes.

The NPRM and ANPRM pose specific questions on which the agency seeks comments. The latter includes a specific list of “Questions for B2B Telemarketing Calls”.

Comments on the NPRM and ANRPM will be due no later than 60 days after publication in the Federal Register.