March 18, 2024
The Federal Trade Commission (“FTC”) issued a Final Rule updating the Telemarketing Sales Rule (“TSR”) (the “Final Rule”) to extend the prohibition against misrepresentations to business-to-business (“B2B”) calls and impose heightened recordkeeping requirements for telemarketers.
The original TSR generally applies to any outbound telemarketing calls to consumers and largely excludes B2B calls. In response to the rise in “scam” or deceptive telemarketing schemes, the FTC, through the Final Rule, prohibits misrepresentations during business-to-business calls and extends coverage of the TSR to additional categories of calls. This portion of the rule is unlikely to have a substantial impact on the operation of scrupulous telemarketers who have compliance programs in place to prevent deceptive marketing. More relevant to that cohort are the Final Rule’s new recordkeeping requirements.
Misrepresentations in B2B Calls:
Before the Final Rule, the TSR generally excluded B2B calls other than calls to sell office and cleaning supplies. At the time, the FTC determined that such B2B calls were the “most significant business-to-business problem area.” The FTC has continued to monitor areas of concern for B2B telemarketing. With the proliferation of deceptive, scam and “spoofed” telemarketing in recent years, the FTC has concluded that deceptive B2B telemarketing are now a major area of concern harming business—particularly small businesses. This type of calls also thwarts FTC action because the technology used can make it difficult to “identify the bad actor responsible for the spoofed or otherwise illegal calls.”
To that end, the Final Rule extends the portions of the TSR that prohibit misrepresentations and false or misleading statements to apply to B2B calls (as those provisions already apply to consumer-facing calls).
Call Detail Record Retention Requirements:
In an effort to combat difficulties in identifying responsible parties when “unscrupulous telemarketers” use spoofing or similar technology to engage in illegal telemarketing, the FTC has imposed heightened recordkeeping requirements and new categories of information that telemarketers must maintain and retain for a minimum of five years.
Among other specific requirements for certain types of telemarketing calls, telemarketers will now be required to maintain call detail records that include:
Telemarketers must also maintain a “record of which version of the Commission’s ‘do-not-call’ registry was used to ensure compliance with [16 C.F.R. Part] § 310.4(b)(1)(iii)(B)” which generally prohibits calls to telephone numbers on the “do-not-call registry.” Such records must include:
The FTC clarified that such records must be maintained for a minimum of five years. A limited safe harbor allows a telemarketer 30 days from the date of discovery to correct a “a temporary and inadvertent” error regarding the call detail retention requirements provided that the telemarketer otherwise complies with the safe harbor requirements including, but not limited to, establishing, monitoring and enforcing procedures to ensure completeness and accuracy of its records under Section 310.5(a)(2) and training personnel regarding the procedures.
Other Changes:
The Final Rule makes various additional changes or clarifications including:
The changes regarding misrepresentations are effective 30 days after publication in the Federal Register. The recordkeeping requirements to retain call detail records are effective 180 days after publication in the Federal Register. The Final Rule is available from the FTC here: https://www.ftc.gov/system/files/ftc_gov/pdf/r411001_tsr_final_rule_2024.pdf.