FTC Issues Rule on Prerecorded Calls for Marketers; ARM Not Impacted

The Federal Trade Commission Tuesday announced that it had approved rule changes in the way telemarketers can use prerecorded messages in making calls with predictive dialers.

The new FTC rules will prevent telemarketers from making prerecorded sales calls unless a consumer explicitly agrees to receive the calls and will require all recorded sales calls to provide an opt-out feature. The opt-out feature must be in place by December 1, 2008.

The new rules are amendments to the FTC’s Telemarketing Sales Rule (TSR) and do not impact the accounts receivable management industry. The ARM industry, and banks that are seeking debt payments, satisfy the exemption clauses of the TSR, although the new rule does not explicitly exempt collectors. Also exempt from the new rules are political calls and charitable solicitations, and “informational” calls, such as notifications from an airline that a passenger’s flight has been cancelled.

The FTC said it was compelled to change the rules under overwhelming response from consumers to do something about prerecorded telemarketing messages.

"Just like the provisions of the Do Not Call Registry, these changes will protect consumers’ privacy," said FTC Chairman William E. Kovacic. "The amendments now directly enable consumers to choose whether they want to receive prerecorded telemarketing calls."

The prerecorded call amendment requires that any prerecorded telemarketing call must:

1) allow the telephone to ring for at least 15 seconds or four rings before an unanswered call is disconnected;
2) begin the prerecorded message within two seconds of a completed greeting by the consumer who answers;
3) disclose at the outset of the call that the recipient may ask to be placed on the company’s do-not-call list at any time during the message;
4) in cases where the call is answered by a person, make an automated interactive voice and/or keypress-activated opt-out mechanism available during the message that adds the phone number to the company’s do-not-call list and then immediately ends the call; and 5) in cases where the call is answered by an answering machine or voicemail, provide a toll-free number that allows the person called to be connected to an automated interactive voice and/or keypress-activated opt-out mechanism anytime after the message is received.