Did the FTC Just Kill Telemarketing?!

In a move that has sent shockwaves through the telemarketing industry — and should cause concern with any company that makes prerecorded calls — the Federal Trade Commission has recently made significant clarifications to the Telemarketing Sales Rule. So, is the news true? Did the FTC just kill telemarketing?

In this article, we will discuss:

• Understanding the FTC's New Guidance
• The Impact on Telemarketing
• Leveraging Technology for Protection

Understanding The FTC's New Guidance

The FTC's new guidance aims to close a longstanding, broad telemarketing consent loophole. The updated Telemarketing Sales Rule (TSR for short) now expressly prohibits outbound telemarketing calls that deliver a prerecorded message unless the seller has obtained the call recipient’s prior signed, written agreement to receive such calls from that seller. This includes nearly all calls that deliver a prerecorded message, regardless of whether the number called is listed on the National Do Not Call Registry.

The FTC's guidance states — in all caps to emphasize the importance — that "The prohibition applies to calls that deliver any prerecorded message, regardless of whether the prerecorded message is played or selected by a live operator." This means that the FTC is now aligning the TSR with the Telephone Consumer Protection Act (TCPA) in terms of consent.

The FTC's guidance further clarifies that the written agreement must contain unambiguous evidence that a call recipient is willing to receive telephone calls that deliver a prerecorded message by or on behalf of a specific seller, the telephone number to which such messages may be delivered, and the call recipient’s signature — tough guidelines.

The Impact On Telemarketing

This is a significant change that could potentially disrupt the telemarketing industry, and the new FTC guidelines are expected to reduce telemarketing robocalls in the US … to some extent. However, it's suspected that the industry will immediately fight back with multiple lawsuits. Furthermore, and unfortunately, bad actors will likely ignore FTC guidance regardless of what it says.

The FTC's new guidance is set to have a significant impact on the telemarketing industry, particularly for companies with a salesforce making legitimate outbound calls.

The FTC's guidance states, "The TSR requires that the seller have a written agreement with the called party for all calls delivering prerecorded messages." This means that the existence of an “established business relationship” does not permit a seller or telemarketer to place a prerecorded message call. This is a significant departure from previous guidelines and could have far-reaching implications for any company making prerecorded calls.

While it’s possible that the expected temporary reduction in telemarketing robocalls could mean less competition, it may likely also lead to increased scrutiny of all telemarketing calls, meaning that businesses need to be extra careful to ensure they are following all regulations.

The alignment of the TSR with the TCPA in terms of consent means that businesses will need to be more diligent in obtaining and documenting consent for prerecorded messages. This will change the way that many sales teams operate, including how they script their calls and the overall sales funnel.

The anticipated industry backlash and lawsuits may also lead to a period of uncertainty, with potential changes to the regulations and how they are enforced. This could make it more difficult for businesses to ensure they are in compliance and could lead to a chilling effect on outbound telemarketing calls … at least for legitimate callers.

Finally, the likelihood of non-compliance by bad actors means that legitimate businesses may be unfairly tarred with the same brush.

In light of these changes, it's more important than ever for businesses to ensure they are following all telemarketing regulations and to consider other ways of reaching their customers, such as through digital marketing channels. It's also crucial for businesses to ensure they are in compliance, and providing value in their calls.

What Enterprises Can Do

In light of the FTC's new guidance, there are several steps that enterprises can take to ensure they remain compliant and protect their interests.

1. Consult Your Legal Team: With the potential for lawsuits from the FTC or others, it's wise to consult with your legal team about the new guidance. They can provide advice on how to navigate the changes and ensure your practices are in line with the updated TSR.
2. Review Your Current Practices: Take the time to review your current telemarketing practices immediately. With legal guidance, ensure that your procedures for obtaining consent comply with the E-SIGN Act and the TSR's written agreement requirements.
3. Implement an Automated Interactive Opt-Out Mechanism: Your prerecorded messages must include an automated, interactive opt-out mechanism. This should be announced at the outset of the message and must remain available throughout the duration of the call.
4. Educate Your Sales Force: It's crucial that your sales team — particularly management — understands the new regulations and how they may impact operations. Conduct training sessions to explain the changes and how to obtain the necessary consent for prerecorded messages. Make sure they understand the importance of not requiring agreement to receive prerecorded messages as a precondition for purchasing or receiving any good or service.
5. Ensure Caller ID Information is Transmitted: The TSR requires that the phone number and, when available, the name of the telemarketer is transmitted to any consumer’s caller identification service.
6. Partner with Compliance Experts: Consider partnering with teams such as YouMailPS, who can advise you on the regulations and even give ongoing digital feedback on the compliance ratings of your calls. They are already updating their spam scoring algorithms to account for the new regulations, which can be a valuable resource for your enterprise.

By taking these steps, enterprises can not only ensure compliance with the new FTC guidelines but also continue to engage in effective and lawful telemarketing practices.

While the FTC's new guidelines may put another dent in telemarketing, it's unlikely to kill telemarketing calls. The CEO of YouMailPS, Alex Quilici, estimates this could decrease telemarketing volume by perhaps 20-30% temporarily, although he notes that companies will likely quickly adjust.Although this isn’t the cure, it is a significant step towards protecting consumers from unwanted calls and ensuring that businesses comply with the law. It’s also a critical compliance point for most large enterprises, who need to understand these changes and take the necessary steps to ensure compliance.

Stay informed and stay compliant. Contact YouMailPS today to learn how we can help you navigate these changes and protect your business.

FAQs About the FTC's New Telemarketing Sales Rule