We’re not one to loft accolades in the direction of fraudulent telemarketers, but we’ll say this about them: They’re a quick study when it comes to using new technologies and business methods to their shady advantage. As part of its ongoing effort to protect consumers from deceptive telemarketing, the FTC is proposing amendments to the Telemarketing Sales Rule that would curtail the use of certain kinds of payments that have become fast favorites among fraudsters.
As FTC cases establish, con artists have been known to use unsigned checks and “remotely created payment orders” to dip into consumers’ bank accounts without proper authorization. In addition, “cash-to-cash” money transfers and “cash reload” mechanisms make it easier for scammers to siphon money from accounts and offer fewer protections for victims. The FTC wants to amend the TSR to make it illegal for telemarketers and sellers to accept any of those payment methods in telemarketing transactions.
What else is the FTC suggesting?
Another proposed change would expand the TSR’s ban on advance-fee recovery services. From what we’ve seen, telemarketers who call consumers and claim that for an upfront fee they can help get people’s money back from an earlier fraud are rarely on the up-and-up. Right now, the TSR makes it illegal to offer to recoup losses from earlier telemarketing transactions. The FTC would like to see that expanded to cover losses suffered in any prior transaction.
Other suggested changes are designed to clarify current TSR provisions most businesses are pretty familiar with. You’ll want to read the notice for specifics, but here’s the 25-words of less version of what’s under consideration:
- Specifying that the recording of a consumer’s express verifiable authorization must include a description what they’re buying;
- Spelling out that the seller or telemarketer has the burden of demonstrating that the seller has an existing business relationship with a consumer, or has the express written agreement to contact a person whose number is on the Do Not Call Registry;
- Clarifying that the B2B exemption extends only to calls to induce a sale to or a contribution from a business itself, and not to calls to people employed by the business;
- Making it clear that the prohibition against sellers sharing the cost of Do Not Call Registry fees — which are non-transferable — is absolute; and
- Illustrating the kinds of burdens companies can’t put on a consumer’s right to be placed on an entity-specific do-not-call list. (A related amendment would make it clear that a seller’s or telemarketer’s failure to get the information necessary to honor a consumer’s request to be placed on that list will disqualify the business from relying on the TSR’s safe harbor for isolated or inadvertent violations.)
How do these proposed changes sound to you? File a comment online by the July 29, 2013, deadline.