FTC Expands Telemarketing Protections with New Safeguards Against Fraud and AI-Driven Scams

FTC Expands Telemarketing Protections with New Safeguards Against Fraud and AI-Driven Scams

The Federal Trade Commission (“FTC”) has announced a final rule extending telemarketing fraud protections to businesses and updating recordkeeping requirements, while also proposing new tools to combat tech support scams.

The FTC reviewed the Telemarketing Sales Rule (“TSR”) and the Do Not Call Registry rules, which prohibits most telemarketing robocalls to consumers. The FTC affirmed the TSR’s prohibitions on voice cloning technology in robocalls.

Samuel Levine, Director of the FTC’s Bureau of Consumer Protection said, “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.  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 Telephone Sales Rule (“TSR”) was established in 1995 and applies to almost all telemarketing activities in the US and internationally. It primarily applies to outbound calls made by telemarketers to consumers, requiring certain disclosures and prohibiting misrepresentations during sales calls. The rule also prohibits calls to consumers on the Do Not Call Registry and calls using prerecorded messages.

The FTC announced the final rulemaking and notice of proposed rulemaking following its regulatory review of the TSR and from public comments received.  This process began in April of 2022 when the FTC proposed extending telemarketing protections to businesses and strengthening safeguards against other harmful telemarking tactics.

The final rule, expands prohibitions against deceptive and abusive practices in business-to-business telemarketing calls, excluding those selling office and cleaning supplies. It also updates the TSR’s recordkeeping requirements, including new requirements for call detail records and its corresponding safe harbor, consent records, compliance with the DNC Registry records, and allowing sellers and telemarketers to allocate responsibility for recordkeeping. The original rule was exempt from these restrictions.

The proposed rulemaking amendment to the TSR would extend its coverage to inbound telemarketing calls involving technical support services, adding calls selling such services to the list of inbound calls. This move is in response to the widespread 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 seek stronger relief, including civil penalties and consumer redress, against such scams.

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This article is for information purposes only. It is not intended to be and should not be relied on as legal advice for any particular matter.