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Telemarketing Sales Rules, Final
 

Telemarketing Sales Rules, Final

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    Telemarketing Sales Rules, Final Telemarketing Sales Rules, Final Document Transcript

    • Federal Register / Vol. 68, No. 19 / Wednesday, January 29, 2003 / Rules and Regulations 4669 proposition that local retail shopping determined, in accordance with § 1.83 of or in addition to the person to whom has, to date, been reduced as a result of of the FTC’s Rules of Practice, that no the credit card is issued. inbound or outbound telemarketing. environmental assessment or EIS is (f) Charitable contribution means any And, the fact remains that, other than required.1075 donation or gift of money or any other DeHart, none of the commenters, thing of value. List of Subjects in 16 CFR Part 310. (g) Commission means the Federal including major sellers, telemarketers, and industry groups, provides any Telemarketing, Trade practices. Trade Commission. evidence relating to the potential for a Accordingly, title 16, part 310 of the (h) Credit means the right granted by national ‘‘do-not-call’’ registry to result Code of Federal Regulations, is revised a creditor to a debtor to defer payment in a reduction in service or an increase to read as follows: of debt or to incur debt and defer its in cost for inbound telemarketing, nor in payment. a concomitant increase in retail PART 310—TELEMARKETING SALES (i) Credit card means any card, plate, shopping done in local malls. RULE coupon book, or other credit device Moreover, the Commission believes existing for the purpose of obtaining there can be no hard evidence on which Sec. money, property, labor, or services on to base a prediction of consumers’ 310.1 Scope of regulations in this part. credit. actions following the implementation of 310.2 Definitions. (j) Credit card sales draft means any 310.3 Deceptive telemarketing acts or the ‘‘do-not-call’’ registry provision. It record or evidence of a credit card practices. seems likely, based on the experience of 310.4 Abusive telemarketing acts or transaction. states that have implemented statewide practices. (k) Credit card system means any ‘‘do-not-call’’ lists, and the 310.5 Recordkeeping requirements. method or procedure used to process overwhelmingly high response of 310.6 Exemptions. credit card transactions involving credit consumers to the Commission’s 310.7 Actions by states and private persons. cards issued or licensed by the operator proposal, that many consumers will 310.8 Reserved: Fee for access to ‘‘do-not­ of that system. avail themselves of the opportunity to call’’ registry. (l) Customer means any person who is place their telephone numbers on the 310.9 Severability. or may be required to pay for goods or national ‘‘do-not-call’’ registry. Authority: 15 U.S.C. 6101–6108. services offered through telemarketing. However, as noted above, this may or (m) Donor means any person solicited may not have any impact on consumers’ § 310.1 Scope of regulations in this part. to make a charitable contribution. decision to shop at local malls, or on This part implements the (n) Established business relationship their choice of transportation. Thus, Telemarketing and Consumer Fraud and means a relationship between a seller while consumer behavior may change as Abuse Prevention Act, 15 U.S.C. 6101­ and a consumer based on: a result of the promulgation of 6108, as amended. (1) the consumer’s purchase, rental, or amendments to the Rule, such changes lease of the seller’s goods or services or § 310.2 Definitions. a financial transaction between the cannot be quantified or even reasonably estimated because consumer decisions (a) Acquirer means a business consumer and seller, within the are influenced by many variables other organization, financial institution, or an eighteen (18) months immediately than existence of the ‘‘do-not-call’’ agent of a business organization or preceding the date of a telemarketing registry. Any indirect impact of the financial institution that has authority call; or amended Rule on the environment from an organization that operates or (2) the consumer’s inquiry or would therefore be highly speculative licenses a credit card system to application regarding a product or and impossible to accurately predict or authorize merchants to accept, transmit, service offered by the seller, within the measure. or process payment by credit card three (3) months immediately preceding The Commission does not believe that through the credit card system for the date of a telemarketing call. any alternative to creating a national money, goods or services, or anything (o) Free-to-pay conversion means, in ‘‘do-not-call’’ registry would both else of value. an offer or agreement to sell or provide provide the benefits of the registry and (b) Attorney General means the chief any goods or services, a provision under ameliorate all potential concerns legal officer of a state. which a customer receives a product or regarding environmental impact. For (c) Billing information means any data service for free for an initial period and example, the Commission does not that enables any person to access a will incur an obligation to pay for the believe that given its justification for the customer’s or donor’s account, such as product or service if he or she does not necessity of the registry, eliminating the a credit card, checking, savings, share or take affirmative action to cancel before provision from the amended Rule would similar account, utility bill, mortgage the end of that period. be appropriate based solely on the loan account, or debit card. (p) Investment opportunity means unsupported allegations of indirect (d) Caller identification service means anything, tangible or intangible, that is environmental effect raised in the a service that allows a telephone offered, offered for sale, sold, or traded DeHart comment. Furthermore, the subscriber to have the telephone based wholly or in part on Commission can think of no alternative number, and, where available, name of representations, either express or other than eliminating the national ‘‘do­ the calling party transmitted implied, about past, present, or future not-call’’ registry that would address contemporaneously with the telephone income, profit, or appreciation. DeHart’s unsupported and highly call, and displayed on a device in or (q) Material means likely to affect a speculative concern. connected to the subscriber’s telephone. person’s choice of, or conduct regarding, In sum, although any evaluation of (e) Cardholder means a person to goods or services or a charitable the environmental impact of the whom a credit card is issued or who is contribution. amendments to the TSR is uncertain authorized to use a credit card on behalf (r) Merchant means a person who is and highly speculative, the Commission authorized under a written contract finds no evidence of avoidable adverse 1075 16 CFR 1.83. See also National Citizens with an acquirer to honor or accept impacts stemming from the amended Comm. for Broad. v. FCC, 567 F.2d 1095, 1098 n.3 credit cards, or to transmit or process for Rule. Therefore, the Commission has (D.C. Cir. 1977). payment credit card payments, for the VerDate Dec<13>2002 18:14 Jan 28, 2003 Jkt 200001 PO 00000 Frm 00091 Fmt 4701 Sfmt 4700 E:FRFM29JAR2.SGM 29JAR2
    • 4670 Federal Register / Vol. 68, No. 19 / Wednesday, January 29, 2003 / Rules and Regulations purchase of goods or services or a conducted to induce the purchase of or services that are the subject of the charitable contribution. goods or services or a charitable sales offer;2 (s) Merchant agreement means a contribution, by use of one or more (ii) All material restrictions, written contract between a merchant telephones and which involves more limitations, or conditions to purchase, and an acquirer to honor or accept than one interstate telephone call. The receive, or use the goods or services that credit cards, or to transmit or process for term does not include the solicitation of are the subject of the sales offer; payment credit card payments, for the sales through the mailing of a catalog (iii) If the seller has a policy of not purchase of goods or services or a which: contains a written description or making refunds, cancellations, charitable contribution. illustration of the goods or services exchanges, or repurchases, a statement (t) Negative option feature means, in offered for sale; includes the business informing the customer that this is the an offer or agreement to sell or provide address of the seller; includes multiple seller’s policy; or, if the seller or any goods or services, a provision under pages of written material or telemarketer makes a representation which the customer’s silence or failure illustrations; and has been issued not about a refund, cancellation, exchange, to take an affirmative action to reject less frequently than once a year, when or repurchase policy, a statement of all goods or services or to cancel the the person making the solicitation does material terms and conditions of such agreement is interpreted by the seller as not solicit customers by telephone but policy; acceptance of the offer. only receives calls initiated by (iv) In any prize promotion, the odds (u) Outbound telephone call means a customers in response to the catalog and of being able to receive the prize, and, telephone call initiated by a during those calls takes orders only if the odds are not calculable in telemarketer to induce the purchase of without further solicitation. For advance, the factors used in calculating goods or services or to solicit a purposes of the previous sentence, the the odds; that no purchase or payment charitable contribution. term ‘‘further solicitation’’ does not is required to win a prize or to (v) Person means any individual, include providing the customer with participate in a prize promotion and group, unincorporated association, information about, or attempting to sell, that any purchase or payment will not limited or general partnership, any other item included in the same increase the person’s chances of corporation, or other business entity. catalog which prompted the customer’s winning; and the no-purchase/no­ (w) Preacquired account information call or in a substantially similar catalog. payment method of participating in the means any information that enables a prize promotion with either instructions (dd) Upselling means soliciting the seller or telemarketer to cause a charge on how to participate or an address or purchase of goods or services following to be placed against a customer’s or local or toll-free telephone number to an initial transaction during a single donor’s account without obtaining the which customers may write or call for telephone call. The upsell is a separate account number directly from the information on how to participate; telemarketing transaction, not a customer or donor during the (v) All material costs or conditions to continuation of the initial transaction. telemarketing transaction pursuant to receive or redeem a prize that is the An ‘‘external upsell’’ is a solicitation which the account will be charged. subject of the prize promotion; made by or on behalf of a seller different (x) Prize means anything offered, or from the seller in the initial transaction, (vi) In the sale of any goods or purportedly offered, and given, or regardless of whether the initial services represented to protect, insure, purportedly given, to a person by transaction and the subsequent or otherwise limit a customer’s liability chance. For purposes of this definition, solicitation are made by the same in the event of unauthorized use of the chance exists if a person is guaranteed telemarketer. An ‘‘internal upsell’’ is a customer’s credit card, the limits on a to receive an item and, at the time of the solicitation made by or on behalf of the cardholder’s liability for unauthorized offer or purported offer, the telemarketer same seller as in the initial transaction, use of a credit card pursuant to 15 does not identify the specific item that regardless of whether the initial U.S.C. 1643; and the person will receive. transaction and subsequent solicitation (vii) If the offer includes a negative (y) Prize promotion means: (1) A sweepstakes or other game of are made by the same telemarketer. option feature, all material terms and chance; or conditions of the negative option § 310.3 Deceptive telemarketing acts or feature, including, but not limited to, (2) An oral or written express or practices. implied representation that a person has the fact that the customer’s account will won, has been selected to receive, or (a) Prohibited deceptive telemarketing be charged unless the customer takes an may be eligible to receive a prize or acts or practices. It is a deceptive affirmative action to avoid the charge(s), purported prize. telemarketing act or practice and a the date(s) the charge(s) will be (z) Seller means any person who, in violation of this Rule for any seller or submitted for payment, and the specific connection with a telemarketing telemarketer to engage in the following steps the customer must take to avoid transaction, provides, offers to provide, conduct: the charge(s). or arranges for others to provide goods (1) Before a customer pays1 for goods (2) Misrepresenting, directly or by or services to the customer in exchange or services offered, failing to disclose implication, in the sale of goods or for consideration. truthfully, in a clear and conspicuous services any of the following material (aa) State means any state of the manner, the following material information: United States, the District of Columbia, information: (i) The total costs to purchase, receive, Puerto Rico, the Northern Mariana (i) The total costs to purchase, receive, or use, and the quantity of, any goods Islands, and any territory or possession or use, and the quantity of, any goods or services that are the subject of a sales of the United States. offer; (bb) Telemarketer means any person 1 When a seller or telemarketer uses, or directs a who, in connection with telemarketing, customer to use, a courier to transport payment, the 2 For offers of consumer credit products subject initiates or receives telephone calls to or seller or telemarketer must make the disclosures to the Truth in Lending Act, 15 U.S.C. 1601 et seq., required by § 310.3(a)(1) before sending a courier to and Regulation Z, 12 CFR 226, compliance with the from a customer or donor. pick up payment or authorization for payment, or disclosure requirements under the Truth in Lending (cc) Telemarketing means a plan, directing a customer to have a courier pick up Act and Regulation Z shall constitute compliance program, or campaign which is payment or authorization for payment. with § 310.3(a)(1)(i) of this Rule. VerDate Dec<13>2002 18:14 Jan 28, 2003 Jkt 200001 PO 00000 Frm 00092 Fmt 4701 Sfmt 4700 E:FRFM29JAR2.SGM 29JAR2
    • Federal Register / Vol. 68, No. 19 / Wednesday, January 29, 2003 / Rules and Regulations 4671 (ii) Any material restriction, upon request to the customer or donor, credit card system, it is a deceptive limitation, or condition to purchase, and the customer’s or donor’s bank or telemarketing act or practice and a receive, or use goods or services that are other billing entity, and which violation of this Rule for: the subject of a sales offer; evidences clearly both the customer’s or (1) A merchant to present to or (iii) Any material aspect of the donor’s authorization of payment for the deposit into, or cause another to present performance, efficacy, nature, or central goods or services or charitable to or deposit into, the credit card system characteristics of goods or services that contribution that are the subject of the for payment, a credit card sales draft are the subject of a sales offer; telemarketing transaction and the generated by a telemarketing transaction (iv) Any material aspect of the nature customer’s or donor’s receipt of all of that is not the result of a telemarketing or terms of the seller’s refund, the following information: credit card transaction between the cancellation, exchange, or repurchase (A) The number of debits, charges, or cardholder and the merchant; policies; payments (if more than one); (2) Any person to employ, solicit, or (v) Any material aspect of a prize (B) The date(s) the debit(s), charge(s), otherwise cause a merchant, or an promotion including, but not limited to, or payment(s) will be submitted for employee, representative, or agent of the the odds of being able to receive a prize, payment; merchant, to present to or deposit into the nature or value of a prize, or that a (C) The amount(s) of the debit(s), the credit card system for payment, a purchase or payment is required to win charge(s), or payment(s); credit card sales draft generated by a a prize or to participate in a prize (D) The customer’s or donor’s name; telemarketing transaction that is not the promotion; (E) The customer’s or donor’s billing result of a telemarketing credit card (vi) Any material aspect of an information, identified with sufficient transaction between the cardholder and investment opportunity including, but specificity such that the customer or the merchant; or not limited to, risk, liquidity, earnings donor understands what account will be (3) Any person to obtain access to the potential, or profitability; used to collect payment for the goods or credit card system through the use of a (vii) A seller’s or telemarketer’s services or charitable contribution that business relationship or an affiliation affiliation with, or endorsement or are the subject of the telemarketing with a merchant, when such access is sponsorship by, any person or transaction; not authorized by the merchant government entity; (F) A telephone number for customer agreement or the applicable credit card (viii) That any customer needs offered or donor inquiry that is answered system. goods or services to provide protections during normal business hours; and (d) Prohibited deceptive acts or a customer already has pursuant to 15 (G) The date of the customer’s or practices in the solicitation of charitable U.S.C. 1643; or donor’s oral authorization; or contributions. It is a fraudulent (ix) Any material aspect of a negative (iii) Written confirmation of the charitable solicitation, a deceptive option feature including, but not limited transaction, identified in a clear and telemarketing act or practice, and a to, the fact that the customer’s account conspicuous manner as such on the violation of this Rule for any will be charged unless the customer outside of the envelope, sent to the telemarketer soliciting charitable takes an affirmative action to avoid the customer or donor via first class mail contributions to misrepresent, directly charge(s), the date(s) the charge(s) will prior to the submission for payment of or by implication, any of the following be submitted for payment, and the the customer’s or donor’s billing material information: specific steps the customer must take to information, and that includes all of the (1) The nature, purpose, or mission of avoid the charge(s). information contained in any entity on behalf of which a (3) Causing billing information to be §§ 310.3(a)(3)(ii)(A)-(G) and a clear and charitable contribution is being submitted for payment, or collecting or conspicuous statement of the requested; attempting to collect payment for goods procedures by which the customer or (2) That any charitable contribution is or services or a charitable contribution, donor can obtain a refund from the tax deductible in whole or in part; directly or indirectly, without the seller or telemarketer or charitable (3) The purpose for which any customer’s or donor’s express verifiable organization in the event the charitable contribution will be used; authorization, except when the method confirmation is inaccurate; provided, (4) The percentage or amount of any of payment used is a credit card subject however, that this means of charitable contribution that will go to a to protections of the Truth in Lending authorization shall not be deemed charitable organization or to any Act and Regulation Z,3 or a debit card verifiable in instances in which goods or particular charitable program; subject to the protections of the services are offered in a transaction (5) Any material aspect of a prize Electronic Fund Transfer Act and involving a free-to-pay conversion and promotion including, but not limited to: Regulation E.4 Such authorization shall preacquired account information. the odds of being able to receive a prize; be deemed verifiable if any of the (4) Making a false or misleading the nature or value of a prize; or that a following means is employed: statement to induce any person to pay charitable contribution is required to (i) Express written authorization by for goods or services or to induce a win a prize or to participate in a prize the customer or donor, which includes charitable contribution. promotion; or the customer’s or donor’s signature;5 (b) Assisting and facilitating. It is a (6) A charitable organization’s or (ii) Express oral authorization which deceptive telemarketing act or practice telemarketer’s affiliation with, or is audio-recorded and made available and a violation of this Rule for a person endorsement or sponsorship by, any to provide substantial assistance or person or government entity. 3 Truth in Lending Act, 15 U.S.C. 1601 et seq., support to any seller or telemarketer and Regulation Z, 12 CFR part 226. when that person knows or consciously § 310.4 Abusive telemarketing acts or 4 Electronic Fund Transfer Act, 15 U.S.C. 1693 et avoids knowing that the seller or practices. seq., and Regulation E, 12 CFR part 205. telemarketer is engaged in any act or (a) Abusive conduct generally. It is an 5 For purposes of this Rule, the term ‘‘signature’’ practice that violates §§ 310.3(a), (c) or abusive telemarketing act or practice shall include an electronic or digital form of signature, to the extent that such form of signature (d), or § 310.4 of this Rule. and a violation of this Rule for any is recognized as a valid signature under applicable (c) Credit card laundering. Except as seller or telemarketer to engage in the federal law or state contract law. expressly permitted by the applicable following conduct: VerDate Dec<13>2002 18:14 Jan 28, 2003 Jkt 200001 PO 00000 Frm 00093 Fmt 4701 Sfmt 4700 E:FRFM29JAR2.SGM 29JAR2
    • 4672 Federal Register / Vol. 68, No. 19 / Wednesday, January 29, 2003 / Rules and Regulations (1) Threats, intimidation, or the use of in paragraphs (a)(6)(i) through (ii) of this outbound telephone calls established to profane or obscene language; section must be met to evidence express comply with § 310.4(b)(1)(iii); (2) Requesting or receiving payment informed consent. (iii) Initiating any outbound telephone of any fee or consideration for goods or (i) In any telemarketing transaction call to a person when: services represented to remove involving preacquired account (A) that person previously has stated derogatory information from, or information and a free-to-pay that he or she does not wish to receive improve, a person’s credit history, credit conversion feature, the seller or an outbound telephone call made by or record, or credit rating until: telemarketer must: on behalf of the seller whose goods or (i) The time frame in which the seller (A) obtain from the customer, at a services are being offered or made on has represented all of the goods or minimum, the last four (4) digits of the behalf of the charitable organization for services will be provided to that person account number to be charged; which a charitable contribution is being has expired; and (B) obtain from the customer his or solicited; or (ii) The seller has provided the person her express agreement to be charged for (B) that person’s telephone number is with documentation in the form of a the goods or services and to be charged on the ‘‘do-not-call’’ registry, consumer report from a consumer using the account number pursuant to maintained by the Commission, of reporting agency demonstrating that the paragraph (a)(6)(i)(A) of this section; persons who do not wish to receive promised results have been achieved, and, outbound telephone calls to induce the such report having been issued more (C) make and maintain an audio purchase of goods or services unless the than six months after the results were recording of the entire telemarketing seller achieved. Nothing in this Rule should transaction. (i) has obtained the express be construed to affect the requirement in (ii) In any other telemarketing agreement, in writing, of such person to the Fair Credit Reporting Act, 15 U.S.C. transaction involving preacquired place calls to that person. Such written 1681, that a consumer report may only account information not described in agreement shall clearly evidence such be obtained for a specified permissible paragraph (a)(6)(i) of this section, the person’s authorization that calls made purpose; seller or telemarketer must: by or on behalf of a specific party may (3) Requesting or receiving payment (A) at a minimum, identify the be placed to that person, and shall of any fee or consideration from a account to be charged with sufficient include the telephone number to which person for goods or services represented specificity for the customer or donor to the calls may be placed and the to recover or otherwise assist in the understand what account will be signature6 of that person; or return of money or any other item of charged; and (ii) has an established business value paid for by, or promised to, that (B) obtain from the customer or donor relationship with such person, and that person in a previous telemarketing his or her express agreement to be person has not stated that he or she does transaction, until seven (7) business charged for the goods or services and to not wish to receive outbound telephone days after such money or other item is be charged using the account number calls under paragraph (b)(1)(iii)(A) of delivered to that person. This provision identified pursuant to paragraph this section; or shall not apply to goods or services (a)(6)(ii)(A) of this section; or (iv) Abandoning any outbound provided to a person by a licensed (7) Failing to transmit or cause to be telephone call. An outbound telephone attorney; transmitted the telephone number, and, call is ‘‘abandoned’’ under this section (4) Requesting or receiving payment when made available by the if a person answers it and the of any fee or consideration in advance telemarketer’s carrier, the name of the telemarketer does not connect the call to of obtaining a loan or other extension of telemarketer, to any caller identification a sales representative within two (2) credit when the seller or telemarketer service in use by a recipient of a seconds of the person’s completed has guaranteed or represented a high telemarketing call; provided that it shall greeting. likelihood of success in obtaining or not be a violation to substitute (for the (2) It is an abusive telemarketing act arranging a loan or other extension of name and phone number used in, or or practice and a violation of this Rule credit for a person; billed for, making the call) the name of for any person to sell, rent, lease, (5) Disclosing or receiving, for the seller or charitable organization on purchase, or use any list established to consideration, unencrypted consumer behalf of which a telemarketing call is comply with § 310.4(b)(1)(iii)(A), or account numbers for use in placed, and the seller’s or charitable maintained by the Commission telemarketing; provided, however, that organization’s customer or donor service pursuant to § 310.4(b)(1)(iii)(B), for any this paragraph shall not apply to the telephone number, which is answered purpose except compliance with the disclosure or receipt of a customer’s or during regular business hours. provisions of this Rule or otherwise to donor’s billing information to process a (b) Pattern of calls. prevent telephone calls to telephone payment for goods or services or a (1) It is an abusive telemarketing act numbers on such lists. charitable contribution pursuant to a or practice and a violation of this Rule (3) A seller or telemarketer will not be transaction; for a telemarketer to engage in, or for a liable for violating § 310.4(b)(1)(ii) and (6) Causing billing information to be seller to cause a telemarketer to engage (iii) if it can demonstrate that, as part of submitted for payment, directly or in, the following conduct: the seller’s or telemarketer’s routine indirectly, without the express informed (i) Causing any telephone to ring, or business practice: consent of the customer or donor. In any engaging any person in telephone (i) It has established and implemented telemarketing transaction, the seller or conversation, repeatedly or written procedures to comply with telemarketer must obtain the express continuously with intent to annoy, § 310.4(b)(1)(ii) and (iii); informed consent of the customer or abuse, or harass any person at the called (ii) It has trained its personnel, and donor to be charged for the goods or number; any entity assisting in its compliance, in services or charitable contribution and (ii) Denying or interfering in any way, 6 For purposes of this Rule, the term ‘‘signature’’ to be charged using the identified directly or indirectly, with a person’s shall include an electronic or digital form of account. In any telemarketing right to be placed on any registry of signature, to the extent that such form of signature transaction involving preacquired names and/or telephone numbers of is recognized as a valid signature under applicable account information, the requirements persons who do not wish to receive federal law or state contract law. VerDate Dec<13>2002 18:14 Jan 28, 2003 Jkt 200001 PO 00000 Frm 00094 Fmt 4701 Sfmt 4700 E:FRFM29JAR2.SGM 29JAR2
    • Federal Register / Vol. 68, No. 19 / Wednesday, January 29, 2003 / Rules and Regulations 4673 the procedures established pursuant to telemarketing act or practice and a the amount paid by the customer for the § 310.4(b)(3)(i); violation of this Rule for a telemarketer goods or services;8 (iii) The seller, or a telemarketer or in an outbound telephone call or (4) The name, any fictitious name another person acting on behalf of the internal or external upsell to induce the used, the last known home address and seller or charitable organization, has purchase of goods or services to fail to telephone number, and the job title(s) maintained and recorded a list of disclose truthfully, promptly, and in a for all current and former employees telephone numbers the seller or clear and conspicuous manner to the directly involved in telephone sales or charitable organization may not contact, person receiving the call, the following solicitations; provided, however, that if in compliance with § 310.4(b)(1)(iii)(A); information: the seller or telemarketer permits (iv) The seller or a telemarketer uses (1) The identity of the seller; fictitious names to be used by a process to prevent telemarketing to (2) That the purpose of the call is to employees, each fictitious name must be any telephone number on any list sell goods or services; traceable to only one specific employee; established pursuant to (3) The nature of the goods or and §§ 310.4(b)(3)(iii) or 310.4(b)(1)(iii)(B), services; and (5) All verifiable authorizations or employing a version of the ‘‘do-not-call’’ (4) That no purchase or payment is records of express informed consent or registry obtained from the Commission necessary to be able to win a prize or express agreement required to be no more than three (3) months prior to participate in a prize promotion if a provided or received under this Rule. the date any call is made, and maintains prize promotion is offered and that any (b) A seller or telemarketer may keep records documenting this process; purchase or payment will not increase the records required by § 310.5(a) in any (v) The seller or a telemarketer or the person’s chances of winning. This form, and in the same manner, format, another person acting on behalf of the disclosure must be made before or in or place as they keep such records in the seller or charitable organization, conjunction with the description of the ordinary course of business. Failure to monitors and enforces compliance with prize to the person called. If requested keep all records required by § 310.5(a) the procedures established pursuant to by that person, the telemarketer must shall be a violation of this Rule. § 310.4(b)(3)(i); and disclose the no-purchase/no-payment (c) The seller and the telemarketer (vi) Any subsequent call otherwise entry method for the prize promotion; calling on behalf of the seller may, by violating § 310.4(b)(1)(ii) or (iii) is the provided, however, that, in any internal written agreement, allocate result of error. upsell for the sale of goods or services, responsibility between themselves for (4) A seller or telemarketer will not be the seller or telemarketer must provide the recordkeeping required by this liable for violating 310.4(b)(1)(iv) if: the disclosures listed in this section Section. When a seller and telemarketer (i) the seller or telemarketer employs only to the extent that the information have entered into such an agreement, technology that ensures abandonment of in the upsell differs from the disclosures the terms of that agreement shall govern, no more than three (3) percent of all provided in the initial telemarketing and the seller or telemarketer, as the calls answered by a person, measured transaction. case may be, need not keep records that per day per calling campaign; (e) Required oral disclosures in duplicate those of the other. If the (ii) the seller or telemarketer, for each charitable solicitations. It is an abusive agreement is unclear as to who must telemarketing call placed, allows the telemarketing act or practice and a maintain any required record(s), or if no telephone to ring for at least fifteen (15) violation of this Rule for a telemarketer, such agreement exists, the seller shall be seconds or four (4) rings before in an outbound telephone call to induce responsible for complying with disconnecting an unanswered call; a charitable contribution, to fail to §§ 310.5(a)(1)-(3) and (5); the (iii) whenever a sales representative is disclose truthfully, promptly, and in a telemarketer shall be responsible for not available to speak with the person clear and conspicuous manner to the complying with § 310.5(a)(4). answering the call within two (2) person receiving the call, the following (d) In the event of any dissolution or seconds after the person’s completed information: termination of the seller’s or greeting, the seller or telemarketer telemarketer’s business, the principal of (1) The identity of the charitable promptly plays a recorded message that that seller or telemarketer shall maintain organization on behalf of which the states the name and telephone number all records as required under this request is being made; and of the seller on whose behalf the call Section. In the event of any sale, (2) That the purpose of the call is to was placed7; and assignment, or other change in solicit a charitable contribution. (iv) the seller or telemarketer, in ownership of the seller’s or accordance with § 310.5(b)-(d), retains § 310.5 Recordkeeping requirements. telemarketer’s business, the successor records establishing compliance with (a) Any seller or telemarketer shall business shall maintain all records § 310.4(b)(4)(i)-(iii). keep, for a period of 24 months from the required under this Section. (c) Calling time restrictions. Without date the record is produced, the § 310.6 Exemptions. the prior consent of a person, it is an following records relating to its (a) Solicitations to induce charitable abusive telemarketing act or practice telemarketing activities: contributions via outbound telephone and a violation of this Rule for a (1) All substantially different calls are not covered by telemarketer to engage in outbound advertising, brochures, telemarketing § 310.4(b)(1)(iii)(B) of this Rule. telephone calls to a person’s residence scripts, and promotional materials; (b) The following acts or practices are at any time other than between 8:00 a.m. (2) The name and last known address exempt from this Rule: and 9:00 p.m. local time at the called of each prize recipient and the prize (1) The sale of pay-per-call services person’s location. awarded for prizes that are represented, subject to the Commission’s Rule (d) Required oral disclosures in the directly or by implication, to have a sale of goods or services. It is an abusive value of $25.00 or more; 8 For offers of consumer credit products subject (3) The name and last known address to the Truth in Lending Act, 15 U.S.C. 1601 et seq., 7 This provision does not affect any seller’s or and Regulation Z, 12 CFR 226, compliance with the of each customer, the goods or services telemarketer’s obligation to comply with relevant recordkeeping requirements under the Truth in state and federal laws, including but not limited to purchased, the date such goods or Lending Act, and Regulation Z, shall constitute the TCPA, 47 U.S.C. 227, and 47 CFR part 64.1200. services were shipped or provided, and compliance with § 310.5(a)(3) of this Rule. VerDate Dec<13>2002 18:14 Jan 28, 2003 Jkt 200001 PO 00000 Frm 00095 Fmt 4701 Sfmt 4700 E:FRFM29JAR2.SGM 29JAR2
    • 4674 Federal Register / Vol. 68, No. 19 / Wednesday, January 29, 2003 / Rules and Regulations entitled ‘‘Trade Regulation Rule customer or donor in response to an (7) Telephone calls between a Pursuant to the Telephone Disclosure advertisement relating to investment telemarketer and any business, except and Dispute Resolution Act of 1992,’’ 16 opportunities, business opportunities calls to induce the retail sale of CFR Part 308, provided, however, that other than business arrangements nondurable office or cleaning supplies; this exemption does not apply to the covered by the Franchise Rule, or provided, however, that requirements of § § 310.4(a)(1), (a)(7), advertisements involving goods or § 310.4(b)(1)(iii)(B) and § 310.5 of this (b), and (c); services described in § § 310.3(a)(1)(vi) Rule shall not apply to sellers or (2) The sale of franchises subject to or 310.4(a)(2)-(4); or to any instances of telemarketers of nondurable office or the Commission’s Rule entitled upselling included in such telephone cleaning supplies. ‘‘Disclosure Requirements and calls; Prohibitions Concerning Franchising § 310.7 Actions by states and private (6) Telephone calls initiated by a persons. and Business Opportunity Ventures,’’ customer or donor in response to a (‘‘Franchise Rule’’) 16 CFR Part 436, (a) Any attorney general or other provided, however, that this exemption direct mail solicitation, including solicitations via the U.S. Postal Service, officer of a state authorized by the state does not apply to the requirements of to bring an action under the § § 310.4(a)(1), (a)(7), (b), and (c); facsimile transmission, electronic mail, and other similar methods of delivery in Telemarketing and Consumer Fraud and (3) Telephone calls in which the sale Abuse Prevention Act, and any private of goods or services or charitable which a solicitation is directed to specific address(es) or person(s), that person who brings an action under that solicitation is not completed, and Act, shall serve written notice of its payment or authorization of payment is clearly, conspicuously, and truthfully discloses all material information listed action on the Commission, if feasible, not required, until after a face-to-face prior to its initiating an action under sales or donation presentation by the in § 310.3(a)(1) of this Rule, for any goods or services offered in the direct this Rule. The notice shall be sent to the seller or charitable organization, Office of the Director, Bureau of provided, however, that this exemption mail solicitation, and that contains no material misrepresentation regarding Consumer Protection, Federal Trade does not apply to the requirements of Commission, Washington, D.C. 20580, § § 310.4(a)(1), (a)(7), (b), and (c); any item contained in § 310.3(d) of this Rule for any requested charitable and shall include a copy of the state’s (4) Telephone calls initiated by a contribution; provided, however, that or private person’s complaint and any customer or donor that are not the result this exemption does not apply to calls other pleadings to be filed with the of any solicitation by a seller, charitable initiated by a customer in response to a court. If prior notice is not feasible, the organization, or telemarketer, provided, direct mail solicitation relating to prize state or private person shall serve the however, that this exemption does not apply to any instances of upselling promotions, investment opportunities, Commission with the required notice included in such telephone calls; business opportunities other than immediately upon instituting its action. (5) Telephone calls initiated by a business arrangements covered by the (b) Nothing contained in this Section customer or donor in response to an Franchise Rule, or goods or services shall prohibit any attorney general or advertisement through any medium, described in §§ 310.3(a)(1)(vi) or other authorized state official from other than direct mail solicitation, 310.4(a)(2)-(4); or to any instances of proceeding in state court on the basis of provided, however, that this exemption upselling included in such telephone an alleged violation of any civil or does not apply to calls initiated by a calls; and criminal statute of such state. VerDate Dec<13>2002 18:14 Jan 28, 2003 Jkt 200001 PO 00000 Frm 00096 Fmt 4701 Sfmt 4700 E:FRFM29JAR2.SGM 29JAR2
    • Federal Register / Vol. 68, No. 19 / Wednesday, January 29, 2003 / Rules and Regulations 4675 § 310.8 [Reserved: Fee for access to ‘‘do­ Johnson—Johnson, Sharon Coleman AFSA—American Financial Services not-call’’ registry.] Jordan—Jordan, April Association Kelly—Kelly, Lawrence M. Red Cross—American Red Cross § 310.9 Severability. KTW—KTW Consulting Techniques, Inc. ARDA—American Resort Development The provisions of this Rule are Lamet—Lamet, Jerome S. Association separate and severable from one Lee—Lee, Rockie ARDA–2—American Resort Development another. If any provision is stayed or LSAP—Legal Services Advocacy Project Association-Do Not Call Registry determined to be invalid, it is the LeQuang—LeQuang, Albert American Rivers—American Rivers Lesher—Lesher, David ASTA—American Society of Travel Agents Commission’s intention that the Mack—Mack, Mr. and Mrs. Alfred ATA—American Teleservices Association remaining provisions shall continue in MPA—Magazine Publishers of America, Inc. Blood Centers—America’s Blood Centers effect. Manz—Manz, Matthias Community Bankers—America’s Community By direction of the Commission. McCurdy—McCurdy, Bridget E. Bankers Donald S. Clark, Menefee—Menefee, Marcie Ameriquest—Ameriquest Mortgage Company Merritt—Merritt, Everett W. Armey—Armey, The Honorable Dick (U.S. Secretary. Mey— Mey, Diana House of Representatives) Mitchelp—Mitchelp AFP—Association of Fundraising Note: Appendices A and B are published TeleSource—Morgan-Francis/Tele-Source Professionals for informational purposes only and will not Industries APTS—Association of Public Television be codified in Title 16 of the Code of Federal NACHA—NACHA-The Electronic Payments Stations Regulations. Association ANA—Association of National Advertisers NAAG—National Association of Attorneys Associations—joint comment of: American Appendix A General Teleservices Association, Direct Marketing NACAA—National Association of Consumer Association, Electronic Retailing List of Acronyms for Rule Review Agency Administrators Association, Magazine Publishers Commenters NCL—National Consumers League Association, and Promotion Marketing NFN—National Federation of Nonprofits Association February 28, 2000 Request for Comment NAA—Newspaper Association of America Assurant—Assurant Group Acronym — Commenter NASAA—North American Securities Avinta—Avinta Communications, Inc. Administrators Association Ayres—Ayres, Ian AARP—AARP Nova53—Nova53 Baldacci—Baldacci, The Honorable John Alan—Alan, Alicia Nurik— Nurik, Margy and Irv Elias (U.S. House of Representatives) ARDA—American Resort Development PLP—Personal Legal Plans, Inc. BofA—Bank of America Association Peters—Peters, John and Frederickson, Bank One—Bank One Corporation ATA—American Teleservices Association Constance Beautyrock—Beautyrock, Inc. Anderson—Anderson, Wayne Reese—Reese Brothers, Inc. BellSouth—BellSouth Corporation Baressi—Baressi, Sandy Reynolds—Reynolds, Charles Best Buy—Best Buy Company, Inc. Bell Atlantic—Bell Atlantic Rothman—Rothman, Iris BRI—Business Response Inc. Bennett—Bennett, Douglas H. Runnels—Runnels, Mike CCAA—California Consumer Affairs Biagiotti—Biagiotti, Mary Sanford—Sanford, Kanija Association Bishop—Bishop, Lew & Lois Schiber—Schiber, Bill CATS—Californians Against Telephone Blake—Blake, Ted Schmied—Schmied, R. L. Solicitation Bowman-Kruhm—Bowman-Kruhm, Mary Strang—Strang, Wayne G. Capital One—Capital One Financial Braddick—Braddick, Jane Ann TeleSource—Morgan-Francis/Tele-Source Corporation Brass—Brass, Eric Industries Car Wash Guys—WashGuy Systems Brosnahan—Brosnahan, Kevin Texas—Texas Attorney General Carper—Carper, The Honorable Thomas R. Budro—Budro, Edgar Thai—Thai, Linh Vien (U.S. Senate) Card—Card, Giles S. Vanderburg—Vanderburg, Mary Lou Collison—Collison, Doug Celebrity Prime Foods—Celebrity Prime Ver Steegt—Ver Steegt, Karen Foods Conn—Conn, David Verizon—Verizon Wireless Conway—Conway, Candace Cendant—Cendant Corporation Warren—Warren, Joshua Chamber of Commerce—Chamber of Croushore—Croushore, Amanda Weltha—Weltha, Nick Curtis—Curtis, Joel Commerce of the United States of America Worsham—Worsham, Michael C., Esq. CRF—Charitable Resource Foundation, Inc. Dawson—Dawson, Darcy DMA—Direct Marketing Association Appendix B Chicago ADM—Chicago Association of Direct DSA—Direct Selling Association Marketing Doe—Doe, Jane List of Acronyms for NPRM Commenters Childhood Leukemia—Childhood Leukemia ERA—Electronic Retailing Association Foundation Acronym — Commenter FAMSA—FAMSA-Funeral Consumers CDI—Circulation Development, Inc. Alliance, Inc. 1–800-DoNotCall—1–800-DoNotCall, Inc. CURE—Citizens United for Rehabilitation of Gannett—Gannett Co., Inc. AARP—AARP Errants Garbin—Garbin, David and Linda ACA—ACA International Citigroup—Citigroup Inc. A. Gardner—Gardner, Anne ACUTA—ACUTA Civil Service Leader—Civil Service Leader S. Gardner—Gardner, Stephen Advanta—Advanta Corp. Collier Shannon-Collier Shannon Scott Gibb—Gibb, Ronald E. Aegis—Aegis Communications Group Comcast—Comcast Gilchrist—Gilchrist, Dr. K. James Alabama Police—Alabama State Police CNHI—Community Newspaper Holdings, Gindin—Gindin, Jim Association, Inc. Inc. Haines—Haines, Charlotte AAST—American Association of State Community Safety—Community Safety, LLC Harper—Harper, Greg Troopers Connecticut—Connecticut Commissioner of Heagy—Heagy, Annette M. ABA—American Bankers Association Consumer Protection Hecht—Hecht, Jeff ABIA—American Bankers Insurance CBA—Consumer Bankers Association Hickman—Bill and Donna Association CCC—joint comment of: Consumer Choice Hollingsworth—Hollingsworth, Bob and Pat American Blind—American Blind Products, Coalition, ACI Telecentrics, Coverdell & Holloway—Holloway, Lynn S. Inc. Company, Discount Development Services, Holmay—Holmay, Kathleen ACE—American Council on Education HSN LP d/b/a HSN and Home Shopping ICFA—International Cemetery and Funeral ADA—American Diabetes Association Network, Household Credit Services, Association AmEx—American Express MBNA America Bank, MemberWorks VerDate Dec<13>2002 19:43 Jan 28, 2003 Jkt 200001 PO 00000 Frm 00097 Fmt 4701 Sfmt 4700 E:FRFM29JAR2.SGM 29JAR2
    • 4676 Federal Register / Vol. 68, No. 19 / Wednesday, January 29, 2003 / Rules and Regulations Incorporated, Mortgage Investors Roanoke FFA—Roanoke (VA) Fire Fighters MPA—Magazine Publishers Association Corporation, Optima Direct, TCIM Inc., Association Make-A-Wish—Make-A-Wish Foundation of Trilegiant Corporation and West Springfield FFA—Springfield (MO) America Corporation Firefighters Association, Local 52 Manzullo—Manzullo, The Honorable Donald CMC—Consumer Mortgage Coalition Sycamore FFA—Sycamore, IAFF Local 3046 A. (U.S. House of Representatives) Consumer Privacy—Consumer Privacy Guide Utah FFA—Utah, Professional Firefighters of March of Dimes—March of Dimes Birth Convergys—Convergys Corporation Vermont FFA—Vermont, Professional Defects Foundation CCA—Corrections Corporation of America Firefighters of Marketlink—Marketlink, Inc. CASE—Council for Advancement and Wisconsin FFA—Wisconsin, Professional MBA—Massachusetts Bankers Association Support of Education Fire Fighters of MasterCard—MasterCard International Cox—Cox Enterprises FireCo—FireCo, L.L.C. MBNA—MBNA America Bank, N.A. Craftmatic—Craftmatic Organization, Inc. Fleet—FleetBoston Financial Corporation McClure—McClure, Scott Davis—Davis, The Honorable Tom (U.S. FOP—Fraternal Order of Police, Grand Lodge McConnell—McConnell, The Honorable House of Representatives) FPIR—Fund for Public Interest Research, Inc. Mitch (U.S. Senate) DBA—Debt Buyers Association FCA—Funeral Consumers Alliance, Inc. Metris—Metris Companies, Inc. DeHart—DeHart & Darr Associates Gannett—Gannett Co., Inc. Michigan Nonprofit—Michigan Nonprofit Deutsch—Deutsch, The Honorable Peter (U.S. Gottschalks—Gottschalks, Inc. Association House of Representatives) Greater Niagara—Greater Niagara MidFirst—MidFirst Bank DialAmerica—DialAmerica Marketing, Inc. Newspapers MBAA—Mortgage Bankers Association of DMA—Direct Marketing Association/U.S. Green Mountain—Green Mountain Energy America Chamber of Commerce Company Myrick—Myrick, The Honorable Sue (U.S. DMA-NonProfit—Direct Marketing Gryphon—Gryphon Networks House of Representatives) Association NonProfit Federation Hagel, Johnson & Carper—Joint letter from: NACHA—NACHA-The Electronic Payments DSA—Direct Selling Association The Honorable Chuck Hagel, Tim Johnson, Association Discover—Discover Bank and Thomas R. Carper (U.S. Senate) Nadel—Nadel, Mark S. (law review article: DC—District of Columbia, Office of the Hastings—Hastings, The Honorable Doc (U.S. ‘‘Rings of Privacy: Unsolicited Telephone People’s Counsel House of Representatives) Calls and the Right to Privacy,’’ 4 Yale Eagle—Eagle Bank Herald Bulletin—Herald Bulletin Journal on Regulation 99 (Fall 1986) EFSC—Electronic Financial Services Council Horick—Horick, Bob NAAG—National Association of Attorneys EPIC—Joint comment: Electronic Privacy Household International: General Information Center, Center for Digital Household Auto—Joint comment: Household NACAA—National Association of Consumer Democracy, Junkbusters Corp, Finance Corp, OFL-A Receivables Corp., Agency Administrators International Union UAW, Privacy Rights and Household Automotive NAIFA—National Association of Insurance & Clearinghouse, Consumers Union, Evan Household Credit—Household Bank, Credit Financial Advisors Hendricks of Privacy Times, Card Services NAR—National Association of Realtors Privacyactivisim, Consumer Action, Household Finance—Household Finance NARUC—National Association of Regulatory Consumer Project on Technology, Robert Corporation Utility Commissioners Ellis Smith of Privacy Journal, Consumer Household-Montalvo—Montalvo, David ARVC—National Association of RV Parks & Federation of America, Computer HSBC—HSBC Bank USA Campgrounds Scientists for Social Responsibility, and Hudson Bay-Anderson—Hudson Bay NASCO—National Association of State Private Citizen, Inc. Company of Illinois-owner Charity Officials ERA—Electronic Retailing Association Hudson Bay-Goodman—Hudson Bay NASUCA—National Association of State EPI—Enterprise Prison Institute Company-Goodman Utility Consumer Advocates Experian—Experian Marketing Information HRC—Human Rights Campaign E-Commerce Coalition—National Business Solutions, Inc. IBM—IBM Coalition on E-Commerce & Privacy Fiber Clean—Fiber Clean ICT—ICT Group, Inc. NCTA—National Cable & Roundtable—Financial Services Roundtable Illinois Police—Illinois Council of Police & Telecommunications Association Fire Fighters Associations: Sheriffs National Children’s Cancer—National Asheville FFA—Asheville (NC) Fire Fighters Infocision—Infocision Management Children’s Cancer Society, Inc. Association Corporation NCLC—Joint comment: National Consumer Bethelehem FFA—Bethlehem (PA), IAFF Inhofe—Inhofe, The Honorable James (U.S. Law Center, National Association of Local 735 Senate) Consumer Advocates, Consumer Boone FFA—Boone (IA) Insight—Insight Realty, Inc. Federation of America, Consumers Union, California FFA—California Professional ITC—Interactive Teleservices Corp. and US Public Interest Research Group Firefighters ICFA—International Cemetery & Funeral NCLF—National Children’s Leukemia Cedar Rapids FFA—Cedar Rapids (IA), IAFF Association Foundation Local 11 IFA—International Franchise Association NCL—National Consumers League Cedar Rapids Airport FFA—Cedar Rapids IUPA—International Union of Police NEMA—National Energy Marketers Airport (IA) Associations Association Chattanooga FFA—Chattanooga (TN) Fire ICC—Internet Commerce Coalition NFPPA—National Family Privacy Protection Fighters Association, Local 820 Intuit—Intuit Inc. Association Edwardsville FFA—Edwardsville (IL) Fire Italian American Police—Italian American NFIB—National Federation of Independent Fighters Local 1700 Police Society of New Jersey Business Greensboro FFA—Greensboro (NC) Johnson—Johnson, The Honorable Tim (U.S. NFC—National Franchise Council Hickory FFA—Hickory (NC) Firefighters Senate) NFDA—National Funeral Directors Association, IAFF Local 2653 Kansas—Kansas, House of Representatives Association Indiana FFA—Indiana, Professional Fire KeyCorp—KeyCorp. NNA—National Newspaper Association of Fighters Union of Lautman—Lautman & Associates America Iowa FFA—Iowa Professional Firefighters LSAP—Legal Services Advocacy Project NPMA—National Pest Management Missouri FFA—Missouri State Council of Leggett & Platt—Leggett & Platt Association Fire Fighters Lenox—Lenox Inc. NPR—National Public Radio North Carolina FFA—North Carolina, Leukemia Society—Leukemia & Lymphoma NRF—National Retail Federation Professional Fire Fighters & Paramedics of Society NTC—National Troopers Coalition North Maine FFA—North Maine (Des Life Share—Life Share Nelson— Nelson, The Honorable E. Benjamin Plaines, IL) Firefighters, IAFF Local 224 Lucas—Lucas, The Honorable Ken (U.S. (U.S. Senate) Ottumwa FFA—Ottumwa (IA) House of Representatives) NetCoalition—NetCoalition VerDate Dec<13>2002 18:14 Jan 28, 2003 Jkt 200001 PO 00000 Frm 00098 Fmt 4701 Sfmt 4700 E:FRFM29JAR2.SGM 29JAR2
    • Federal Register / Vol. 68, No. 19 / Wednesday, January 29, 2003 / Rules and Regulations 4677 Nethercutt—Nethercutt, The Honorable SO-MO—Special Olympics Missouri Celebrity Prime Foods-Supp.— Celebrity George R., Jr. (U.S. House of SO-MT—Special Olympics Montana Prime Foods Representatives) SO-NH—Special Olympics New Hampshire Chesapeake-Supp.—The Chesapeake Bay NeuStar—NeuStar, Inc. SO-NJ—Special Olympics New Jersey Foundation (Amelia Koch and Melissa New Orleans—New Orleans, City Council of SO-NM—Special Olympics New Mexico Livingston) (CNO)-Utility, Cable & SO-NY—Special Olympics New York Christian Appalachian-Supp.— The Christian Telecommunications Committee SO-VT—Special Olympics Vermont Appalachian Project NJ Police—New Jersey Police Officers SO-VA—Special Olympics Virginia Comic Relief-Supp.—Comic Relief, Inc. Foundation, Inc. SO-WA—Special Olympics Washington (Dennis Albaigh) NYSCPB— New York State Consumer SO-WI—Special Olympics Wisconsin Covington & Burling-Supp.— Covington and Protection Board SO-WY—Special Olympics Wyoming Burling NAA—Newspaper Association of America Spiegel—Spiegel, Marilyn DialAmerica-Supp.—DialAmerica Marketing, Nextel—Nextel Communications, Inc. Stage Door—Stage Door Music Productions, Inc. Ney, Sandlin, Jones, Shows and Cantor— Inc. DMA Letter-Supp.—Direct Marketing Joint letter from: The Honorable Bob Ney, Statewide Appeal—Statewide Appeal Inc. Association-Transmittal Letter Max Sandlin, Walter Jones, Ronnie Shows, Success Marketing—Success Marketing, Inc. DMA Study-Supp.—Direct Marketing and Eric Cantor (U.S. House of Synergy Global—Synergy Global Networks, Association-Study Representatives) The ERA and PMA-Supp.—Electronic Retailing Noble—Noble Systems Synergy Solutions—Synergy Solutions, Inc. Association and Promotion Marketing NATN—North American Telephone Network Sytel—Sytel Limited Association LLC Tate—Tate & Associates EPI-Supp.— Enterprise Prison Institute NC Zoo—North Carolina Zoological Society Technion—Technion Communications Corp Domenici-Supp.—Domenici, The Honorable Not-For-Profit Coalition—Not-For-Profit and TDI—Telecommunications for the Deaf, Inc. Pete V. (U.S. Senate) Charitable Coalition TeleDirect—TeleDirect International, Inc. FDS-Supp.— Federation Department Stores NSDI—NSDI Teleperformance Telefund—Telefund, Inc. Hoar-Supp.— Hoar, Wesley C. OSU—Ohio State University Teleperformance—Teleperformance USA Illinois-Supp.— Illinois Attorney General’s OTC—Ohio Troopers Coalition TRC—Tele-Response Center Office Pacesetter—Pacesetter Corporation TeleStar—TeleStar Marketing, L.P. ICTA-Supp.— Industry Council for Tangible PVA—Paralyzed Veterans of America TRA—Tennessee Regulatory Authority Assets Paramount—Paramount Lists, Inc. Terry—Terry, The Honorable Lee (U.S. House Luntz-Supp.— Luntz Research Companies Pascrell—Pascrell, The Honorable Bill, Jr. of Representatives) (Chrys Lemon) (U.S. House of Representatives) Texas Environment—Texas Campaign for the MPA-Supp.— Magazine Publishers of Patrick—Patrick, George W. Environment America Paul—Paul, The Honorable Ron (U.S. House Texas PUC—Texas Office of Public Utility Maryland-Supp.—Maryland Attorney of Representatives) Counsel General’s Office (Carol Beyers) Pelland—Pelland, Paul Thayer—Thayer, Richard E., Esq. McIntyre-Supp.—McIntyre Law Firm, PLLC PLP—Personal Legal Plans, Inc. Time—Time, Inc. (Chrys Lemon) Michigan Police—Police Officers Association Tribune—Tribune Publishing Company McKenna-Supp.—McKenna, Douglas M. of Michigan UNICOR—UNICOR: (Federal Prison Memberworks-Supp.—Memberworks possibleNOW—possibleNOW.com, Inc. Industries, Inc, DOJ, Federal Bureau of National Survey Topline (Chrys Lemon) PRC—Privacy Rights Clearinghouse Prisons) Minnesota-Supp.—Minnesota Attorney Private Citizen—Private Citizen, Inc. DOJ—U.S. Department of Justice General’s Office Proctor—Proctor, Alan Uniway—Uniway of Coastal Georgia Missouri-Supp.—Missouri Attorney PBP—Progressive Business Publications Verizon—Verizon Companies General’s Office PCIC—Progressive Casualty Insurance Virginia—Virginia Attorney General NACDS-Supp.—National Association of Company VISA—VISA U.S.A., Inc. Chain Drug Stores Angel Food—Project Angel Food Watts—Watts, The Honorable J.C., Jr. (U.S. Ney, Sandlin, Jones, Shows and Cantor- PMA—Promotion Marketing Association House of Representatives) Supp.—Joint letter from: The Honorable Purple Heart—Purple Heart Service Weber—Weber, Ron & Associates, Inc. Bob Ney, Max Sandlin, Walter Jones, Foundation, Military Order of Wells Fargo—Wells Fargo & Company Ronnie Shows, and Eric Cantor (U.S. Ramstad—Ramstad, The Honorable Jim (U.S. White—White, David T. House of Representatives) House of Representatives) WTA—Wisconsin Troopers’Association Inc. NAR-Supp.— National Association of Redish—Redish, Martin H., Esq. Worsham—Worsham, Michael C., Esq. Realtors Reed Elsevier—Reed Elsevier Inc. YPIMA—Yellow Pages Integrated Media NWF-Supp.— National Wildlife Federation Reese—Reese Brothers, Inc. Association (YPIMA) NAA June 28-Supp.—Newspaper Association SBC—SBC Communications Inc. of America (John F. Sturm) Supplemental Comments NAA July 31-Supp.—Newspaper Association Schrock—Schrock, The Honorable Edward L. (U.S. House of Representatives) AARP-Supp.—AARP of America Sensenbrenner—Sensenbrenner, The AOP-Supp.—Aircraft Owners and Pilots Not-For-Profit Coalition-Supp.—Not-For- Honorable F. James, Jr. (U.S. House of Association (Marsha Mason-Thies) Profit and Charitable Coalition Representatives) Allstate-Supp.— Allstate Life Insurance PMA-Supp.—Promotion Marketing SHARE—SHARE Company Association SIIA—Software & Information Industry Community Bankers-Supp.— America’s Putnam-Supp.— Putnam, The Honorable Association Community Bankers Adam H. (U.S. House of Representatives) Southerland—Southerland, Inc. AICR-Supp.— The American Institute for Riley-Supp.—Riley, The Honorable Bob (U.S. Southern Poverty—Southern Poverty Law Cancer Research (Kathryn L. Ward) House of Representatives) Center Red Cross-Supp.—American Red Cross SBC-Supp.— SBC Communications Inc. Special Olympics—Special Olympics, Inc. ARDA-Supp.— The American Resort Time-Supp.— Time, Inc. SO-AZ—Special Olympics Arizona Development Association (Yartin DePoy Vermont-Supp.—Vermont Attorney General’s SO-CA—Special Olympics Southern and Stratis Pridgeon) Office California ATA-Supp.— American Teleservices WWF-Supp.— World Wildlife Fund SO-CO—Special Olympics Colorado Association (Deborah Hechinger) SO-CN—Special Olympics Connecticut Associations-Supp.—Associations Letter Worsham-Supp.—Worsham, Michael C. SO-IA—Special Olympics Iowa Avinta-Supp.— Avinta (Abe Chen) User Fee Comments SO-KY—Special Olympics Kentucky Bond-Supp.— Bond, The Honorable SO-MD—Special Olympics Maryland Christopher S. (U.S. Senate) AARP-User Fee—AARP VerDate Dec<13>2002 18:14 Jan 28, 2003 Jkt 200001 PO 00000 Frm 00099 Fmt 4701 Sfmt 4700 E:FRFM29JAR2.SGM 29JAR2
    • 4678 Federal Register / Vol. 68, No. 19 / Wednesday, January 29, 2003 / Rules and Regulations ABA-User Fee—American Bankers ‘‘abusive’’ for purposes of the TSR, and telemarketing practices for purposes of Association the national do-not-call registry. the Telemarketing Act and the TSR. Red Cross-User Fee—American Red Cross Nevertheless, I agree with the ARDA-User Fee—American Resort Abusive Telemarketing Acts or Practices Commission’s conclusion that a Development Association ATA-User Fee—American Teleservices The Telemarketing and Consumer telemarketing practice that meets the Association strict unfairness standard will constitute Fraud and Abuse Prevention Act Community Bankers-User Fee— America’s an abusive practice for purposes of the (‘‘Telemarketing Act’’) directs the Community Bankers Act and the TSR. In light of the Commission to promulgate rules that Ameriquest-User Fee—Ameriquest Mortgage rulemaking record, I therefore support Company prohibit ‘‘deceptive telemarketing acts the TSR amendments that are analyzed Celebrity Prime Foods-User Fee— Celebrity or practices and other abusive under this standard. This includes the Prime Foods telemarketing acts or practices.’’ 15 requirement that telemarketers obtain CBA-User Fee—Consumer Bankers U.S.C. 6102 (a)(1). To determine what Association consumers’ or donors’ express informed constitutes an abusive telemarketing consent before causing their information DialAmerica-User Fee— DialAmerica practice, the Commission for the most Marketing, Inc. to be submitted for payment. The DMA Letter-User Fee— Direct Marketing part has used the examples of abusive rulemaking record evidences the harm Association practices that Congress provided in the that results from unauthorized billing, DMA Comments-User Fee— Direct Marketing Telemarketing Act and principles drawn the need for the consent requirement, Association from these examples. I agree that this is and the need to mandate specific steps Discover-User Fee—Discover Bank an appropriate analysis, and in light of that telemarketers must take to obtain ERA/PMA-User Fee—Electronic Retailing the rulemaking record as a whole, I fully Association and Promotion Marketing consumers’ consent in transactions support the TSR amendments that fall involving preacquired account Association (joint comment) Household-User Fee—Household Bank (SB), within these parameters. These information. N.A. and Household Bank (Nevada), N.A. amendments include, among other In addition, the record supports the (joint comment) things, the provisions involving the prohibition on the disclosure or receipt, Hudson Bay-User Fee— Hudson Bay national do-not-call registry, for consideration, of unencrypted Company of Illinois, Inc. transmission of caller identification account numbers for use in ICTA-User Fee—Industry Council for information, and abandoned calls and telemarketing (except to process a Tangible Assets predictive dialers. payment for goods or services or a InfoCision-User Fee—InfoCision Management Corporation When the Commission seeks to charitable contribution pursuant to a ITC-User Fee— Interactive Teleservices identify practices as abusive that are transaction). I do not believe that the Corporation less distinctly within the parameters of mere disclosure of personal financial MPA-User Fee—Magazine Publishers of the Act’s examples and their emphasis information, without more, causes or is America on privacy protection, the Commission likely to cause substantial consumer MasterCard-User Fee—MasterCard injury. In this situation, however, the International, Inc. employs its traditional unfairness analysis.1 I understand the rulemaking record provides a basis for NACDS-User Fee—National Association of concluding that trafficking in Chain Drug Stores Commission’s intention to narrow the NAR-User Fee—National Association of potentially expansive scope of the term unencrypted account numbers is likely Realtors ‘‘abusive’’ by using its unfairness to cause substantial consumer injury in NASUCA-User Fee—National Association of analysis. However, given the broad the form of unauthorized billing. State Utility Consumer Advocates ordinary meaning of the term ‘‘abusive,’’ Industry comments state that there is no NEMA-User Fee—National Energy Marketers I believe that the standard for legitimate reason to purchase Association unencrypted lists of credit card Not-For-Profit Coalition-User Fee—Not-For- determining what constitutes an abusive telemarketing practice likely is broader numbers. Therefore, there is a strong Profit and Charitable Coalition likelihood that telemarketers who do SBC-User Fee—SBC Communications, Inc. than the stringent definition of the term Tennessee-User Fee—Tennessee Regulatory ‘‘unfair.’’ Therefore, I would have engage in this practice will misuse the Authority preferred it had the Commission looked information in a manner that results in SBA-User Fee—United States Small Business to the plain meaning of the term unauthorized charges to consumers’ Administration, Office of Advocacy ‘‘abusive’’ and then formulated a accounts. The Commission’s law Visa-User Fee— Visa U.S.A., Inc. enforcement experience corroborates Wells Fargo-User Fee— Wells Fargo & separate standard to identify abusive this conclusion.2 As a result, I conclude Company that this practice is abusive for purposes 1 Given that nothing in the language of the Concurring Statement of Commissioner Telemarketing Act or its legislative history indicates of the Telemarketing Act. Orson Swindle in Telemarketing Sales that Congress intended the Commission to use its The National Do-Not-Call Registry Rule, File No. R411001 unfairness standard to determine which practices are abusive, I previously raised concerns about this The Telemarketing Act and the TSR I wholeheartedly support the analysis and requested comment on this issue. recognize consumers’ ‘‘right to be let amendments to the Telemarketing Sales Concurring Statement of Commissioner Orson Swindle in Telemarketing Sales Rule Review, File alone.’’ See, e.g., Olmstead v. U.S., 277 Rule (‘‘TSR’’), because I believe that No. R411001, available at (www.ftc.gov/os/2002/01/ U.S. 438, 478 (1928) (Brandeis, J., they will help protect consumers from swindletsrstatment.htm). Although some comments dissenting) (stating that the ‘‘right to be deceptive and abusive telemarketing agreed with this concern, they did not offer an let alone’’ is the ‘‘most comprehensive practices. In particular, these alternative analysis of abusive practices beyond suggesting that the Commission’s authority is of rights and the right most valued by amendments will give consumers the limited to the examples of abusive practices ability to avoid the sheer volume of included in the Telemarketing Act and its 2 See Statement of Basis and Purpose at 97-98. In unwanted telemarketing calls that many legislative history. See Statement of Basis and addition, given the evidence that the use of consider to be a nuisance. I write Purpose at 100, n. 428. However, because the Act encrypted account information in telemarketing can does not limit the Commission’s authority to result in unauthorized charges, there is an even separately to explain my views on two identify abusive practices to the examples in the greater likelihood that injury will occur when a issues — how the Commission Act, the Commission may prohibit other practices telemarketer has obtained, for consideration, determines whether an act or practice is that it identifies as abusive. consumers’ actual credit card numbers. VerDate Dec<13>2002 18:14 Jan 28, 2003 Jkt 200001 PO 00000 Frm 00100 Fmt 4701 Sfmt 4700 E:FRFM29JAR2.SGM 29JAR2
    • Federal Register / Vol. 68, No. 19 / Wednesday, January 29, 2003 / Rules and Regulations 4679 civilized men’’). In the context of consumers who have said they do not calls of entities such as banks, telephone telemarketing, there is an inherent want to be called by or on behalf of a companies, airlines, insurance tension between this right and the First particular entity. This more narrowly companies, credit unions, charities, Amendment’s right to free speech. With tailored approach seeks to protect political campaigns, and political fund- this in mind, and in light of the consumers from unwanted raisers. From the perspective of rulemaking record as a whole, the telemarketing calls seeking charitable consumers, the right to be let alone is Commission has determined to establish donations, while minimizing the impact invaded just as much by unwanted calls a national do-not-call registry. This will of the TSR on charities’ First from exempt entities (e.g., banks, enable consumers to stop certain Amendment rights. I do not object to telephone companies, or political fund- telemarketing calls — calls to induce the taking this approach at the outset; but if raisers) as it is by such calls from purchase of goods and services from there is evidence that suggests that this covered entities.3 Therefore, I believe companies within the FTC’s jurisdiction approach is not effective in protecting (except where the consumer has an consumers from unsolicited that the entire spectrum of entities that ‘‘established business relationship’’ telemarketing calls, the Commission make telemarketing calls to consumers with the seller). should revisit this decision and require should be subject to do-not-call Although the USA PATRIOT Act of for-profit telemarketers seeking requirements. 2001 gave the Commission authority to charitable donations to comply with the [FR Doc. 03–1811 Filed 1–28–03; 8:45 am] regulate for-profit companies that make national do-not-call registry. BILLING CODE 6750–01–S telephone calls seeking charitable While I believe that the amended TSR donations on behalf of charities, the and the national do-not-call registry will Commission has determined to exempt go a long way to help consumers 3 The Federal Communications Commission, these entities from the national do-not­ prevent unwanted intrusions into their however, has requested comment on whether to call registry requirements. Instead, the homes, a number of entities are not establish a national do-not-call registry that would Commission requires these subject to the TSR’s requirements. address telemarketing calls by at least some of the telemarketers to comply with the Under the Telemarketing Act and the entities that are exempt from the FTC’s jurisdiction. ‘‘entity-specific’’ do-not-call provision, TSR, the Commission does not have Notice of Proposed Rulemaking, Rules and which prohibits them from calling jurisdiction in whole or in part over the Regulations Implementing the Telephone Consumer Protection Act of 1991, 67 FR 62667 (Oct. 8, 2002). VerDate Dec<13>2002 18:14 Jan 28, 2003 Jkt 200001 PO 00000 Frm 00101 Fmt 4701 Sfmt 4700 E:FRFM29JAR2.SGM 29JAR2