FTC Rule Banning Deceptive, Abusive Telemarketing Goes into Effect this Weekend.

For Release

The new Federal Trade Commission rule designed to give consumers important information regarding telemarketing offers, and giving them an easy-to-use tool for stopping unwanted calls, goes into effect on Sunday. Under the FTC's Telemarketing Sales Rule, all consumers have to do to exercise their right to stop a telemarketer from calling is simply ask the caller not to phone them again. If the telemarketing firm does call again, it's breaking the law and the consumer should report it to the state Attorney General's office for action, according to a free consumer brochure outlining the rule, released by the FTC today.

The Telemarketing Sales Rule also prohibits telemarketers from calling consumers before 8 a.m. and after 9 p.m. When they do call, telemarketers must tell the consumer that they are, in fact, trying to sell something, before they make their pitch. Then, before consumers pay, they must state the total cost of the product or service they're offering and any restrictions on getting or using them. The rule also prohibits misrepresentations, tightly restricts the telemarketing of credit repair services, so called "recover" services, and advance fee loan services, and it makes it unlawful for any company or individual to assist fraudulent telemarketing behind the scenes.

The FTC promulgated the rule at the direction of Congress to ban abusive and deceptive telemarketing practices. Congress, in enacting the Telemarketing and Consumer Fraud and Abuse Prevention Act in 1994, recognized the serious economic toll of telemarketing fraud, estimated to cost consumers as much as $40 billion every year. The chief congressional sponsors of this law were Senators Richard Bryan, John McCain and Slade Gorton and Representatives Al Swift, Carlos Moorhead and Michael Oxley.

The new FTC brochure, part of a large campaign that also includes radio public service announcements to educate consumers regarding their rights under the rule, outlines how telemarketing scams work, how telemarketers get consumers' names and telephone numbers, and the key provisions of the rule. The rule covers most types of telemarketing calls, including calls to pitch goods, services, "sweepstakes," and prize-promotion and investment opportunities. The FTC has brought dozens of law-enforcement actions over the years to halt fraudulent telemar- keting scams, and this rule adds to its enforcement arsenal the threat of substantial civil penalties. In addition, the rule is enforceable in federal court by each of the states' Attorney General who now can get nationwide injunctions to stop telemarketing fraud operators no matter where they are. This puts 50 additional cops on the national telemarketing fraud beat.

The FTC also encourages consumers who believe they may have been victimized by a fraudulent telemarketer to report the company to the National Fraud Information Center's Telemarketing Fraud Hotline at 1-800-876-7060 (open 9 a.m. - 5:30 p.m. EST Monday-Friday). The FTC and other law enforcers glean information from the database in bringing law-enforcement actions.

Copies of the new FTC brochure, "Straight Talk About Telemarketing," and the Telemarketing Sales Rule are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov

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