Tuesday, December 19, 2006

FTC Extends Forbearance Policy for Prerecorded Telemarketing Calls

This positng was written by Jeffrey May, editor of CCH Trade Regulation Reporter.

The FTC has extended its previously-announced forbearance policy in enforcement of the prohibition of prerecorded calls in the Telemarketing Sales Rule (16 CFR Part 310, CCH Trade Regulation Reporter ¶38,058). The policy had been set to expire January 2, 2007.

The Direct Marketing Association and three other organizations petitioned the government for an extension of the revocation date. In response, the Commission determined that the forbearance policy should remain in effect until the conclusion of proceedings on a proposed new safe harbor to the call-abandonment provision of the rule, which would have permitted telemarketers to deliver prerecorded messages to consumers with whom the seller had an “established business relationship.” As a result, telemarketers may continue to use prerecorded messages to consumers with whom the seller had “an established business relationship,” until the proceedings are completed.

In October, the FTC denied a request for creation of the new safe harbor. The agency instead proposed an amendment to the rule that would make explicit the prohibition of prerecorded calls that is now implicit in the rules “call abandonment” provisions. The amendment would explicitly prohibit sellers and telemarketers from delivering a pre-recorded message when the person answers the telemarketing call, except in the very limited circumstances permitted in the call-abandonment safe harbor or when a consumer has consented in writing to receive such calls. At that time, the Commission also announced the revocation of its policy of refraining from enforcement of the call-abandonment prohibition.

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