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State AGs weigh in on Telemarketing Sales Rule

26 December 2014
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State AGs weigh in on Telemarketing Sales Rule

The Federal Trade Commission needs to update and strengthen the Telemarketing Sales Rule, according to a letter from 38 state attorneys general, to reflect the “realities of today’s marketplace.”

Sent on behalf of the National Association of Attorneys General, the letter responded to four specific topics presented by the FTC when it issued a request for public comment as part of the agency’s review of the TSR.

The existing consumer protections of the Rule should be expanded to cover inbound telemarketing calls that are triggered by general media advertising, the letter added. It included examples of consumer complaints received by AGs in Illinois, Indiana, and Vermont about such scams.

At a minimum the agency should restrict the use of remotely created checks and payment orders, as well as cash-to-cash money transfers and cash reload mechanisms as payment in telemarketing transactions. The regulators also support an outright ban on the methods they said are frequently used in fraudulent telemarketing transactions.

The letter also expressed support for the FTC’s efforts to hold money transfer companies responsible for facilitating fraud through the use of their payment systems.

Why it matters: The AGs expressed a long-standing “keen interest” in the area of telemarketing and negative option marketing fraud. They noted that their offices are often on the “front line” in “fielding consumer complaints, taking up investigations, and pursuing legal actions against those who prey on victims through telemarketing and negative options scams.” The state regulators advocated a host of additional TSR restrictions that include a prohibition on the use of preacquired account information, a ban on certain payment methods, as well as a requirement that call records be maintained.

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