The Federal Trade Commission issued two notices this week concerning the Telemarketing Sales Rule (TSR)—an advance notice of proposed rulemaking (ANPR) and a notice of proposed rulemaking (NPR). Both notices address the TSR’s exemption of business-to-business (B2B) telemarketing calls. The FTC issued the new notices following its review of comments received in response to the regulatory review of the TSR it initiated in 2014. Comments on each notice will be due no later than 60 days after the date it is published in the Federal Register.
ANPR. The TSR currently exempts telephone calls between a telemarketer and “any business to induce the purchase of goods or services or a charitable contribution by the business,” known as the B2B exception. The B2B exception does not apply to calls to market the retail sale of nondurable office or cleaning supplies.
In the ANPR, the FTC seeks comment on whether (1) the B2B exemption should be repealed in its entirety, (2) the exemption should be partially repealed so that only specific provisions of the TSR would apply to B2B telemarketing, or (3) the exemption should be partially repealed so that the TSR applies to a subset of B2B telemarketing based on, for example, the particular good or service offered for sale. To explain why an expansion of TSR coverage to B2B telemarketing calls may be warranted, the FTC points to changes in the digital marketplace that have led to more deceptive marketing schemes targeting small businesses. It also points to the escalating likelihood that B2B telemarketing marketing calls will impinge on the privacy of a consumer’s home as a result of more people working from home.
The ANPR includes a series of questions concerning the possible benefits to people and businesses from repealing the B2B exception and a series of questions concerning the potential burden to telemarketers and sellers from repealing the exception.
The other two issues on which the FTC seeks comment in the ANPR are:
- Whether the FTC should (1) add tech support services to the list of goods or services to which the inbound telemarketing exemptions do not apply, (2) repeal the exemption only for general media advertisements that induce inbound telemarketing of tech support services but retain the exemption for direct mail solicitation, or (3) repeal the exemption in its entirety subject to an exemption for sellers who manufacture the computer at issue and with whom the consumer has an ongoing business relationship. (The TSR generally exempts inbound calls responding to media advertising, with some specific exemptions.)
- Whether the TSR should require negative-option sellers to provide consumers with reminders of negative option programs and simple cancellation methods.
For each of these two issues, the ANPR includes a series of questions.
NPR. In the NPR, the FTC proposes the following revisions to the TSR:
- Requiring sellers and telemarketers to retain the following new categories of information: (1) a copy of each unique recorded message, (2) call detail records of telemarketing campaigns, (3) records sufficient to show that a seller has an established business relationship with a consumer, (4) records sufficient to show a consumer is a previous donor to a particular charitable organization, (5) records of the service providers that a telemarketer uses to deliver outbound calls, (6) records of a seller or charitable organization’s entity-specific do-not-call registries, and (7) records of the FTC’s Do-Not- Call Registry that were used to ensure compliance with the TSR.
- Modifications of existing recordkeeping requirements, including changing the time period that sellers and telemarketers must keep records from two years to five years, and clarifying that the failure to keep each record required by the TSR is a separate violation of the TSR.
- Narrowing the B2B exception to require B2B telemarketing calls to comply with the TSR provisions that prohibit misrepresentations and false or misleading statements.
- The addition of a definition for the term “previous donor” and several corrections.