FTC Enacts New TSR B2B Rules and Proposes Rule on Tech Support Scams
On March 7, 2024, the Federal Trade Commission announced a final rule extending telemarketing fraud protections to businesses and updating the rule’s recordkeeping requirements as a result of developments in technology and the marketplace.
FTC lawyers also announced a proposed rule that would provide the agency with significant new tools to combat tech support scams.
Both actions are part of the FTC’s current review of the Telemarketing Sales Rule (TSR), which includes the Do Not Call Registry (DNC) rules and provisions banning nearly all telemarketing robocalls to consumers.
Importantly, the FTC also affirms the TSR’s prohibitions on robocalls using voice cloning technology.
“Today’s changes provide important new protections for small business and will help ensure that the FTC can take action against deceptive marketers who use AI robocalls and other emerging technology,” said FTC attorney Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We look forward to comments from the public on the additional proposals that would deter tech support scams and aid the Commission’s efforts to put money back into the pockets of defrauded consumers.”
The TSR became effective in 1995 and applies to virtually all “telemarketing” activities, both in the United States and international sales calls to consumers in the United States. The rule generally applies only to outbound calls made by telemarketers to consumers, with some exceptions, and protects consumers in a range of ways.
For example and without limitation, the TSR requires telemarketers to make certain disclosures and prohibits misrepresentations during sales calls. The TSR also prohibits calls to consumers on the Do Not Call Registry, and it prohibits calls using prerecorded messages regardless of whether the consumer is listed on the Do Not Call Registry.
FTC Implements Updates to Telemarketing Sales Rule
Both the final rulemaking and notice of proposed rulemaking announced on March 7, 2024 arise from the Commission’s regulatory review of the TSR and address public comments received as part of that review.
In April 2022, the FTC proposed extending telemarketing protections to businesses and strengthening safeguards against other pernicious telemarking tactics plaguing consumers.
The final rule announced on March 7, 2024 implements updates that:
- Prohibit deceptive and abusive practices in all business-to-business calls: The original TSR exempted business-to-business calls (other than those selling office and cleaning supplies, which the Commission considered the “most significant business-to-business problem area” at the time). The final rule announced on March 7 expands prohibitions against misrepresentations to business-to-business telemarketing
- Updates the TSR’s recordkeeping requirements: The final rule will make several modifications to the recordkeeping amendments. The primary substantive modifications relate to new recordkeeping requirements for call detail records and its corresponding safe harbor, records of consent, records of compliance with the DNC Registry, and the provision allowing sellers and telemarketers to allocate responsibility for recordkeeping.
FTC Proposes Amending TSR to Cover Inbound Calls Involving Tech Support Services
The notice of proposed rulemaking proposes amending the TSR to extend its coverage to inbound telemarketing calls involving technical support services. The TSR applies to certain categories of inbound calls—i.e., calls that consumers make to telemarketers—and the proposed amendment would add calls selling technical support services to that list.
The FTC’s proposed amendment is needed due to the agency’s recognition of deception and consumer injury caused by tech support scams, including those in which consumers call supposed tech support operations in response to advertising.
The amendment would enable the FTC to obtain stronger relief, such as monetary civil penalties and consumer redress, against tech support scams.
The FTC also is seeking comments on a proposed definition of tech support scams.
Richard B. Newman is an FTC defense lawyer at Hinch Newman LLP. Follow FTC defense lawyer on X.
Informational purposes only. Not legal advice. May be considered attorney advertising.
