FTC Delays Enforcement on Prerecorded Messages
Presented by Manatt Phelps and Phillips
The Federal Trade Commission will continue a moratorium on enforcement actions against telemarketers delivering prerecorded messages until it completes a proceeding covering rules for prerecorded calls.
The extension came in response to a request from the Direct Marketing Association and other groups.
In 2003, the FTC amended the Telephone Sales Rule to limit the percentage of telemarketing calls that may be “abandoned” without the risk of FTC enforcement. In an abandoned call, the consumer answers but finds no one on the line. The FTC amended the TSR to prohibit call abandonment but let telemarketers play a prerecorded message when a consumer answers in a maximum of 3 percent of calls answered by consumers in person.
However, the FTC said in October that it:
• Denied a petition to let telemarketers deliver prerecorded messages to consumers with whom the seller has an established business relationship.
• Proposed making explicit a ban against telemarketing calls delivering prerecorded messages without the express written consent of the consumer.
• Would end its policy, as of January 2, 2007, of not bringing enforcement actions against companies using prerecorded messages in accordance with the 2003 rules.
The DMA and other groups petitioned the FTC to delay ending the enforcement policy until after a final determination on the proposed ban.
Significance: This is good news for telemarketers that faced possible enforcement actions under a rule that the FTC was in the midst of reviewing, creating the potential for confusion and conflict.