A bipartisan coalition of 38 state attorneys general last week sent a letter to the Federal Trade Commission urging the regulator to update the Telemarketing Sales Rule “in order to reflect realities of today’s marketplace and better protect consumers from unscrupulous telemarketers.” Currently-evolving alternative payment methods are a focus of the request.
The letter, originally sponsored by the AGs of Florida and Pennsylvania, notes that the Telemarketing Sales Rule (TSR) was expanded in 2003 to cover new solicitations that were popping up in consumer complaints, including advertisements for investment or business opportunities, advance fee loans, credit card protection services, credit repair services, recovery services, and (since 2010) debt relief services.
Now, according to the AGs, the FTC needs to direct the TSR protections to inbound telemarketing calls resulting from general media advertising, most notably over the Internet and social media.
Rather than focusing exclusively on outbound telemarketing — calls going from a call center to a consumer’s phone — the FTC should be focusing on solicitations that encourage consumers to call a number themselves, and the FTC can use its authority under the TSR to do just that, said the AGs.
The law enforcers also want the FTC to focus on certain “novel payment methods” in its regulation. Specifically proposed steps include banning sellers and telemarketers from accepting remotely created checks, remotely created payment orders, cash-to-cash money transfers, and cash reload mechanism as payment in inbound or outbound telemarketing transactions; and expanding the scope of the advance fee ban on “recovery” services to include recovery of losses in any previous transaction (at present, they are limited to recovery of losses in prior telemarketing transactions).
The letter noted that because the perpetrators of such scams are unlikely to be deterred by the law, the Attorneys General support the FTC’s efforts to hold money transfer companies, whose payment systems are being utilized to accomplish such fraud, responsible for making reasonable inquiry into whether the transfer results from a prohibited telemarketing solicitation.
Finally, the AGs recommended a new rule under the TSR that would require telemarketers and sellers to create and maintain call records, perhaps the most onerous proposal in the letter. The AGs recognized the impact that rule might have, writing that they “recognize a recordkeeping requirement may impose additional costs on telemarketers, but in today’s marketplace, telemarketers are making more calls than ever before with decreasing expense. The increasing availability of automated dialing technologies, ‘caller-ID management’ services, and other Internet-based services, both within the United States and in other countries, means the costs of such services and technologies continue to plummet.”
In addition to the attorneys general of Florida and Pennsylvania, the letter was signed by the AGs of Alaska, Arizona, Arkansas, Colorado, Delaware, District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oregon, Rhode Island, South Dakota, Tennessee, Utah, Vermont, and Washington.