2024 Telemarketing Compliance: Understanding New TSR Requirements

On April 18, 2024, the U.S. Telemarketing Sales Rule (TSR) was amended to address technological advances in the industry. These amendments introduced significant changes to the TSR for the first time in nearly a decade. These changes impose several new recordkeeping requirements, prohibit material misstatements and false or misleading statements in business-to-business (B2B) telemarketing calls, and provide a new definition for the term “previous donor”, applicable to charitable organization telemarketing activities.

Compliance with these requirements is phased, with specific deadlines for different aspects of the rule to allow businesses adequate time to implement necessary changes as follows:

§ Effective Date: The changes are effective starting May 16, 2024.

§ Compliance Date for Recordkeeping Requirement: Compliance with specific recordkeeping requirements, specifically the new provisions on retention of call detail records are not required until October 15, 2024.

Below is a brief discussion of the key changes related to the new recordkeeping requirement.

New recordkeeping requirements

The new recordkeeping requirements are designed to overcome the hurdles in enforcing the TSR in the current telemarketing landscape. The changes are designed to make it easier to:

a. Identify the telemarketer and seller responsible for the telemarketing campaign

b. Obtain call detail records

c. Link the content of the telemarketing calls with the call detail records to determine which TSR provisions might apply to the telemarketing activity.

The key changes include:

  1. Advertisement and Promotional Materials: Telemarketers are required to keep records of all substantially different advertising, brochures, telemarketing scripts, and promotional materials used in their campaigns as well as a copy of each unique prerecorded message, including each call a telemarketer makes using digital soundboard. Digital soundboard includes any digital or sound technologies that sellers or telemarketers use to convey a verbal message to a consumer in telemarketing.
  2. Call Detail Records: Telemarketers and sellers must maintain detailed records of telemarketing transactions, including the calling number; called number; time, date, and duration of the call; and the disposition of the call (such as whether the call was answered, dropped, transferred, or connected). Calls made by an individual telemarketer who manually enters a single telephone number to initiate a call to that telephone number are exempt. However, sellers and telemarketers must still comply with the other recordkeeping requirements.
  3. Prize Recipients and Customer Information: Updated requirements mandate the retention of lists of prize recipients, customers, last known telephone number and physical or email address, prize awarded for prizes with a value of $25 or more, the date goods or services were purchased, and telemarketing employees directly involved in the sales or solicitation.
  4. Established Business Relationship (EBR): For each person a seller intends to claim to have an EBR, the seller must keep a record of the name and last known phone number of that person, the date the person submitted an inquiry or application about that seller’s goods or services, and the goods or services inquired about.
  5. Verification of Consent: Records of verifiable authorizations or express informed consent or express agreement must be maintained, including the person’s name and phone number, a copy of the consent requested, a copy of the consent provided, the date the person provided consent, and the purpose for which consent was given and received. If consent was requested verbally, the telemarketer or seller must retain a recording of the consent requested as well as the consent provided.
  6. Service Provider Contracts: Records of contracts with service providers used by telemarketers to deliver outbound calls (such as voice providers, auto-dialers, sub-contracting telemarketers, or digital soundboard technology platforms) must be maintained.
  7. Do-Not-Call list and Registry: The updates require sellers and telemarketers to retain entity-specific list of persons who do not wish to receive calls, and to maintain, for five years, records of the FTC’s DNC Registry accessed to ensure compliance with the TSR’s DNC prohibitions.
  8. Retention Period: The required period for retaining the records has been extended to five years from the date the record is made, except for advertising materials and service contracts, which require retention of records for five years from the date the records are no longer in use, ensuring that telemarketers keep relevant documents for a sufficient time to allow for enforcement actions.
  9. Safe Harbor: The changes include a safe harbor provision for temporary and inadvertent errors in keeping call detail records if the seller or telemarketer demonstrate that—(1) it established and implemented procedures to ensure completeness and accuracy of its records, (2) it provided training to its personnel and any entities assisting it in meeting its compliance obligations, (3) it monitors compliance and enforces the procedures, and documents its monitoring and enforcement activities, and (4) any failure to keep accurate or complete records was temporary and inadvertent, and was corrected within 30 days of discovery.
  10. Allocation of Compliance Obligations: The rule allows the seller and telemarketer to allocate responsibilities between themselves for the recordkeeping requirements by written agreement. If an agreement is in place, the responsibility falls on the party stated in the agreement and both parties need not maintain duplicate records. If the seller allocates recordkeeping responsibilities to its telemarketer, the seller is required to establish and implement practices and procedure to ensure the telemarketer is complying with the TSR’s recordkeeping provisions, such as retaining access rights to any records created by the telemarketer on the seller’s behalf.

These new recordkeeping requirements are aimed at ensuring that telemarketers maintain sufficient documentation to verify compliance with the TSR and to aid regulatory bodies in monitoring and enforcing the rule effectively. Compliance with these requirements is phased, with specific deadlines for different aspects of the rule to allow businesses adequate time to implement necessary changes.

Key takeaways

The following are some key takeaways to consider as businesses work towards putting processes in place to comply with the updated rule.

  1. Conformity assessment: Perform a conformity assessment of existing practices, including software solution(s), against the new requirements to determine if updates are necessary, and make necessary updates.
  2. Procedures: Update or establish procedures designed to ensure compliance with the updated rule. The level of recordkeeping required by the changes is comprehensive.
  3. Contract review: Review contracts with telemarketers to ensure appropriate allocation of compliance obligations. To the extent the telemarketer is responsible for compliance obligations, the contract should provide to the seller access rights to the records created by the telemarketer on behalf of the seller.
  4. Training: Provide training to personnel and any other entities assisting in meeting compliance obligations.
  5. Monitoring and enforcement protocols: Implement monitoring and enforcement protocols and ensure these activities are properly documented.
Thought Leadership

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