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Sunday, April 21, 2024 | Back issues
Courthouse News Service Courthouse News Service

FTC Amends Rules |for Telemarketers

(CN) - The Federal Trade Commission on Wednesday approved final amendments to its Telemarketing Sales Rule, including a change intended to thwart con artists and scammers.

The changes will stop telemarketers from dipping directly into consumer bank accounts by using certain kinds of checks and "payment orders" that have been "remotely created" by the telemarketer or seller.

These two payment mechanisms make it easy for unscrupulous telemarketers to debit bank accounts without consumers' permission, and can make it difficult to reverse the transactions with consumers' banks, the agency said.

In addition, the amendments will bar telemarketers from receiving payments through traditional "cash-to-cash" money transfers provided by companies like MoneyGram, Western Union, and RIA -- another approached favored by scammers.

The changes also will prohibit telemarketers from accepting as payment "cash reload" mechanisms - such as MoneyPak, Vanilla Reload, or Reloadit packs used to add funds to existing prepaid cards.

As detailed in the Federal Register notice announcing the Final Rule, the amendments address changes in the financial marketplace to ensure consumers remain protected by the Telemarketing Sales Rule's antifraud provisions, but are narrowly tailored to allow for innovations with respect to other payment methods that are used by legitimate companies.

According to the FTC, the final rule will also expand the advance-fee ban on recovery services to include losses both in prior telemarketing and non-telemarketing transactions; and require that a description of the goods or services purchased must be included in the tape recording of a consumer's express verifiable authorization to be charged.

The amendments also update several provisions of the National Do Not Call Registry.

These include a requirement that a telemarketer demonstrate that it has an existing business relation with, or has received an express written agreement from, a consumer it calls if the consumer's number is on the DNC Registry.

It also specifies that if a seller or telemarketer does not get the information needed to place a consumer's number on its entity-specific do-not-call list, the seller or telemarketer is disqualified from the safe harbor for isolated or accidental violations.

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