Advertising Law Blog

The Federal Trade Commission recently announced two important amendments to the Telemarketing Sales Rule. Published on August 29, 2008 in the Federal Register, one amendment harmonizes the FTC's call abandonment calculation standard with that of the Federal Communications Commission's standard and the other dramatically limits the FTC's current policy on pre-recorded voice calls.

Call Abandonment

To date, the FTC and the FCC utilized different methods of calculating the percentage of calls that would constitute an allowable rate of calls not answered by a live person within two seconds in order to take advantage of the call abandonment safe harbor. Effective October 1, 2008, the FTC will apply the same standard as the FCC - 3% per campaign over a 30-day period -- to determine the call abandonment rate safe harbor.

Pre-recorded Voice Calls

The FTC has permanently diverged from the FCC as to what constitutes a permissible sales call utilizing pre-recorded voice. Under the new amendment, the FTC will prohibit pre-recorded voice sales calls unless the seller possesses written authorization from the consumer permitting the receipt of such calls. Currently, and for the next year, the FTC will continue its forbearance policy of permitting pre-recorded voice sales calls where there is an existing business relationship and the consumer can easily opt out of receiving future calls. (The requirements under the current forbearance policy are discussed in our prior blog post which can be found here.) However, effective September 1, 2009, companies will be required to possess written authorization to make pre-recorded voice sales calls. The prohibition does not apply to informational (i.e., non-sales) calls.

Regardless of whether the sales call is based on an existing business relationship or written authorization, beginning December 1 2008, telemarketers must provide at the outset of a prerecorded messages, an automated key press or voice-activated interactive opt-out mechanism so that consumers can opt out as easily as they can from a live telemarketing call. For any pre-recorded voice sales call, the call must 1) allow the telephone to ring for at least 15 seconds or four rings before an unanswered call is disconnected; 2) begin the prerecorded message within two seconds of a completed greeting by the consumer who answers; 3) disclose at the outset of the call that the recipient may ask to be placed on the company's do-not-call list at any time during the message; 4) in cases where the call is answered by a person, make an automated interactive voice and/or key press-activated opt-out mechanism available during the message that adds the phone number to the company's do-not-call list and then immediately ends the call; and 5) in cases where the call is answered by an answering machine or voicemail, provide a toll-free number that allows the person called to be connected to an automated interactive voice and/or key press-activated opt-out mechanism anytime after the message is received. In addition, all other requirements of the TSR and other federal and state laws apply.