• April 8, 2024
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

FTC Hardens Protections Against Telemarketing Fraud

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The U.S. Federal Trade Commission has extended telemarketing fraud protections to businesses, updated recordkeeping requirements, and proposed a rule that would provide the agency with significant new tools to combat tech support scams.

These actions were part of the commission’s review of the Telemarketing Sales Rule (TSR), which includes the Do Not Call Registry (DNC) rules and provisions banning nearly all telemarketing robocalls to consumers. Importantly, the FTC also affirms the TSR’s prohibitions on robocalls using voice cloning technology.

The changes "provide important new protections for small business and will help ensure that the FTC can take action against deceptive marketers who use AI robocalls and other emerging technology," said Samuel Levine, director of the FTC's Bureau of Consumer Protection, in a statement. "We look forward to comments from the public on the additional proposals that would deter tech support scams and aid the commission's efforts to put money back into the pockets of defrauded consumers."

The TSR went into effect in 1995 and applies to virtually all telemarketing activities, both in the United States and international sales calls to consumers in the United States. It applies only to outbound calls made by telemarketers to consumers and protects consumers in a range of ways. For example, the rule requires telemarketers to make certain disclosures and prohibits misrepresentations during sales calls. The TSR also prohibits calls to consumers on the Do Not Call Registry and calls using prerecorded messages.

The final rule includes the following updates:

  • It prohibits deceptive and abusive practices in all business-to-business calls, which were exempted in the original TSR..
  • It updates the TSR's recordkeeping requirements for call detail records and its corresponding safe harbor, records of consent, records of compliance with the DNC Registry, and the provision allowing sellers and telemarketers to allocate responsibility for recordkeeping.

The commission is also looking to amend the TSR to extend coverage to inbound telemarketing calls for technical support services. This change, it said, is needed due to the widespread deception and consumer injury caused by tech support scams. The amendment would enable the FTC to obtain stronger relief—including civil penalties and consumer redress—against tech support scams.

Mark McKinney, vice president of market intelligence and innovation at Gryphon.ai , says the rules changes will have more far-reaching effects:

"The latest FTC changes to the Telemarketing Sales Rule underscore how regulators are cracking down on fraudulent and unwanted sales calls. This rule aims to add consumer protections against fraudsters and scammers, but will impact all organizations that use telemarketing as a part of their marketing strategy," he says.

Telemarketers, McKinney adds, will "need to establish clear and specific guidelines for how to handle conversation data and call logs. This requires setting up the right technology infrastructure and frameworks to ensure they’re following the proper record-keeping protocols. As we've seen the regulatory landscape evolve over recent months, it's important that organizations implement their own compliance practices or risk facing increased regulatory scrutiny."

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