FTC Seeks Feedback On Telemarketing Sales Rule

FTC Seeks Feedback On Telemarketing Sales Rule

FTC Seeks Feedback On Telemarketing Sales Rule

Last Updated on May 17, 2017 by John Fischer

Anyone hoping to solicit investments over the phone now has a chance to speak up. The Federal Trade Commission is seeking feedback from the public on how to further amend the Telemarketing Sales Rule (TSR). Comments are open to the public so consumers and brokers alike are submitting ideas. The deadline for the collection of all comments is October 14, 2014. With the knowledge that your opinion will finally be heard, download A href=”https://ftcpublic.commentworks.com/ftc/telemarketingsalesnprm/”>this comment form and submit it. It seems likely that consumers would favor more rigid regulations, making it more difficult for brokers to solicit investments over the phone.

What’s The Telemarketing Sales Rule?

The TSR was established first in 1995 to protect consumers against telemarketing fraud. Later, the TSR provided a basis for the Do-Not-Call (DNC) Registry. One of the most important functions of the TSR and DNC, as stated by the Federal Trade Commission, is to help differentiate between unscrupulous telemarketers and legitimate businesses. Right now, there are some differences between how local and national governments deal with telemarketing restrictions. There are many different types of offerings, different types of securities, and different goods and services sold over the phone. The TSR is constantly subject to review because the end goal is to achieve balance between consumer protection and commerce.

This is why it’s important for brokers as well as consumers to voice their opinions. There are a number of issues under contention that require due consideration. For example, what kinds of factors determine a preexisting relationship between you and your potential investor? The DNC registry makes special allowances for charity groups and political organizations, but are these allowances in balance with restrictions on business calls?

What Exactly Is Changing?

Another issue proposed changes to the Telemarketing Sales Rule highlight is the use of the “pre-acquired account information”. According to FTC documentation, customers who provide sellers with their financial information — like credit card numbers — could be charged multiple times for different goods and services, even from different sellers. Congress submitted their own regulations to help curb these practices, and major credit card companies enacted provisions for the protection of their customers’ financial information. Likewise, the FTC is now considering what kind of usage a telemarketing agency or broker can engage in with “pre-acquired account information.” If you have an opinion on how customers’ financial information should or should not be collected, then consider submitting your suggestions.

“Compliance with trade regulations is nothing to sneeze at, so it’s critical that those who earn their living through telemarketing know the positives and negatives of the rules they must abide by.”

For example, in order to use a customer’s financial account information you must be able to obtain the customer’s informed consent. Even if one follows the FTC regulations exactly, it is still uncertain what exactly constitutes informed consent. Is it when you’ve made a customer aware of what you’re selling and what it costs? What kind of reply from the customer qualifies as informed consent? These are some of the issues that the FTC hopes to clear up through comments from telemarketers.

But Will My Voice Matter?

Brokers who are hoping to use SEC Regulation D Rule 506C to make general solicitations for private placement offerings should definitely be interested in adding comments on the Telemarketing Sales Rule. Rule 506C does not require a preexisting relationship with your potential investor (as long as they’re accredited) but issues of informed consent still apply. If you’re going to be making solicitations over the phone, then compliance with the TSR and the DNC is critical. You need to know what kind of information you must provide to your potential investor and how to protect yourself from undue prosecution. If you have suggestions that can protect consumers from fraud as well as making it easier to do businesses, submit them now.