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Proposed FTC Rules Could Reduce Telemarketing Abuses
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Date: Mon, 27 Feb 1995 16:54:10 -0800 (PST)
From: Privacy Rights Clearinghouse
The Federal Trade Commission (FTC) has proposed a set of rules which would ban many deceptive or abusive telemarketing sales practices. Although there has been very little publicity about this rulemaking, it could severely restrict telemarketing activity and substantially cut down on those annoying sales calls that always seem to come at the wrong time. It would also provide a strong deterrent to scam artists.
The FTC is seeking public comment over the next several weeks on the proposed rules. A copy of the proposal can be obtained by calling 202.326.2222. The actual text is very long (120 pages), so interested persons might request a press release which explains the rules in some detail. I'm not aware of any online availability of these materials.
Under the proposed rules, telemarketers would have to tell consumers at the beginning of each call that it is a sales call and provide the name of the seller. The rule would prohibit telemarketing calls before 8 a.m. or after 9 p.m. Telemarketers offering credit or loans, credit repair services, or assistance to consumers in recovering lost money from prior telemarketing schemes, would be prohibited from seeking payment until the services have been rendered.
Additionally, telemarketers would be required to disclose all material information about any offer made to a consumer, and would be required to obtain signed acknowledgement of written disclosure regarding all prize-promotions and investment offerings before seeking any payment. These disclosures must include information about the retail price of all prizes, odds of winning, costs of obtaining any prize, and the "No purchase necessary to win" statement.
The proposed rules also prohibit a variety of specific misrepresentations, including that a person was selected to receive a prize, that the telemarketer is affiliated with a government entity, or that the telemarketer can improve credit records or obtain loans for customers regardless of credit record.
Also, telemarketers would be prohibited from calling consumers more than once every three months to sell the same thing, and calling consumers who have stated that they do not want to be called by the telemarketer. Violations of the proposed rule could result in civil penalties of up to $10,000 per violation.
There will likely be strong resistance from the telemarketing industry to these regulations, and attempts to weaken the proposed rules. Written comments in support of the rules may be submitted to the FTC, Office of the Secretary, Room 159, Washington D.C. 20580, and should be captioned "Proposed Telemarketing Sales Rule." The FTC requests that the comments also be submitted on disk, preferably in a DOS word processer format, or as a text file.
BTW, the Privacy Rights Clearinghouse has a free publication entitled "Telemarketing: Whatever Happened to a Quiet Evening at Home?" that provides tips on cutting down on sales calls. The document is available via gopher at gopher.acusd.edu; ftp at teetot.acusd.edu cd pub/privacy; WWW at http://www.manymedia.com/prc/; or e-mail this address for a copy.
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Barry D. Fraser fraser@pwa.acusd.edu Online Legal Research Associate
Privacy Rights Clearinghouse prc@pwa.acusd.edu Center for Public Interest Law telnet teetot.acusd.edu University of San Diego login: privacy Privacy Hotline: 619-298-3396 BBS: 619-260-4789 In California: 800-773-7748 host: teetot login: privacy
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