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FTC RULE BANNING DECEPTIVE, ABUSIVE TELEMARKETING
Under the
Federal Trade Commission's Telemarketing Sales Rule, all consumers have to
do to exercise their right to stop a telemarketer from calling is simply
ask the caller not to phone them again. If the telemarketing firm does call
again, it's breaking the law and the consumer should report it to the state
Attorney General's office for action. Consumers may also block all
telemarketers by registering at donotcall.gov.
The
Telemarketing Sales Rule also prohibits telemarketers from calling
consumers before 8 a.m. and after 9 p.m. When they do call, telemarketers
must tell the consumer that they are, in fact, trying to sell something,
before they make their pitch. Then, before consumers pay, they must state
the total cost of the product or service they're offering and any
restrictions on getting or using them. The rule also prohibits
misrepresentations, tightly restricts the telemarketing of credit repair
services, so called "recover" services, and advance fee loan
services, and it makes it unlawful for any company or individual to assist
fraudulent telemarketing behind the scenes.
The FTC
promulgated the rule at the direction of Congress to ban abusive and
deceptive telemarketing practices. Congress, in enacting the Telemarketing
and Consumer Fraud and Abuse Prevention Act in 1994, recognized the serious
economic toll of telemarketing fraud, estimated to cost consumers as much
as $40 billion every year.
The rule
covers most types of telemarketing calls, including calls to pitch goods,
services, "sweepstakes," and prize-promotion and investment
opportunities. The FTC has brought dozens of law-enforcement actions over
the years to halt fraudulent telemarketing scams, and this rule adds to its
enforcement arsenal the threat of substantial civil penalties. In addition,
the rule is enforceable in federal court by each of the states' Attorney
General who now can get nationwide injunctions to stop telemarketing fraud
operators no matter where they are.
The FTC
also encourages consumers who believe they may have been victimized by a
fraudulent telemarketer to report the company to the National Fraud
Information Center's
Telemarketing Fraud Hotline at 1-800-876-7060 (open 9 a.m. - 5:30 p.m. EST
Monday-Friday). The FTC and other law enforcers glean information from the
database in bringing law-enforcement actions.
Copies of
the FTC brochure, "Straight Talk About Telemarketing," and the
Telemarketing Sales Rule are available from the FTC's Public Reference
Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington,
D.C. 20580; 202-326-2222; TTY for the hearing impaired 202-326-2502.
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