Telemarketing

FTC Implements New TSR B2B Rules and Proposes Rulemaking on Tech Support Scams

By Richard Newman / March 8, 2024
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On March 7, 2024, the Federal Trade Commission announced a final rule extending telemarketing fraud protections to businesses and updating the rule’s recordkeeping requirements as a result of developments in technology and the marketplace.

FTC lawyers also announced a proposed rule that would provide the agency with significant new tools to combat tech support scams.

Both actions are part of the FTC’s current review of the Telemarketing Sales Rule (TSR), which includes the Do Not Call Registry (DNC) rules and provisions banning nearly all telemarketing robocalls to consumers.

Importantly, the FTC also affirms the TSR’s prohibitions on robocalls using voice cloning technology.

“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,” said FTC attorney Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.  “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 TSR became effective in 1995 and applies to virtually all “telemarketing” activities, both in the United States and international sales calls to consumers in the United States.  The rule generally applies only to outbound calls made by telemarketers to consumers, with some exceptions, and protects consumers in a range of ways.

For example and without limitation,

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FCC Privacy + Data Protection Task Force Announces Enforcement Partnership with State Attorneys General

By Richard Newman / January 2, 2024
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On December 6, 2023, Federal Communications Commission Chairwoman Jessica Rosenworcel announced a new initiative to strengthen and formalize the cooperation between the FCC and its state partners on privacy, data protection and cybersecurity enforcement matters.

As part of the work of the FCC’s Privacy and Data Protection Task Force, the FCC’s Enforcement Bureau has signed Memoranda of Understanding with Attorneys General of Connecticut, Illinois, New York and Pennsylvania to share expertise, resources and coordinated efforts in conducting privacy, data protection and cybersecurity-related investigations to protect consumers.

The Memoranda of Understanding

           The new MOU affirm that the FCC and State Attorneys General “share close and common legal interests in working cooperatively to investigate and, where appropriate, prosecute or otherwise take enforcement action in relation to privacy, data protection or cybersecurity issues” under sections 201 and 222 of the Communications Act.

Coordinated action and information sharing will take place under all applicable federal and state laws, and privacy protections.

Federal and State Comments

           FCC Chairwoman Rosenworcel said, in pertinent part, that  “[d]efending consumer privacy is an all-of-government responsibility and a shared challenge.  Today we take on evolving consumer threats with new formal partnerships with state law enforcement leaders, which  have already been successful in obtaining record-breaking results in combatting illegal robocalls.”

FCC Enforcement Bureau Chief Loyann A. Egal said, in pertinent part, that “[u]se of information and communications technology and services have significantly enhanced our lives while at the same time increasing vulnerabilities to our privacy and sensitive data. 

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FCC ADOPTS NEW RULE TO CLOSE THE LEAD GENERATOR ROBOCALL AND ROBOTEXTS LOOPHOLE

By Richard Newman / December 14, 2023
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On December 13, 2023, the Federal Communications Commission adopted new rules designed to protect consumers from “scam communications” by directly addressing some of the “biggest vulnerabilities” in America’s robotext defenses and closing the “lead generator” robocall/robotexts loophole.

The new rules allow blocking of “red flagged” robotexting numbers, codifies Do-Not-Call rules for texting, and encourages an opt-in approach for delivering email-to-text messages.

Closing the Lead Generator Loophole

The new rules close a loophole through which “unscrupulous robocallers and robotexters inundate consumers with unwanted and illegal robocalls and robotexts.” The new rules make it unequivocally clear that comparison shopping websites and lead generators must obtain consumer consent to receive robocalls and robotexts one seller at a time – rather than have a single consent apply to multiple telemarketers at once.

Combating Robotext Sources

The new rules allow the FCC to “red flag” certain numbers, requiring mobile carriers to block texts from those numbers. The rules also codify that Do-Not-Call list protections apply to text messaging, making it illegal for marketing texts to be sent to numbers on the registry. And the order encourages providers to make email-to-text messages an opt-in service, which would limit the effectiveness of a major source of unwanted and illegal text messages.

Groundwork for Future Steps

In addition to the rules, the FCC also proposed and will take public comment on additional steps it might take against robotexts. The FCC proposes additional blocking requirements when the FCC notifies a provider of a likely “scam text-generating number.” The FCC will also seek further comment on text message authentication – modeled on the implementation of STIR/SHAKEN protocols for phone calls – including on the status of any industry standards in development.

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Lead Generators and Brokers Beware: Proposed FCC Rule Requires Telemarketing Consent Must be Obtained From a Single Seller at a Time

By Richard Newman / November 25, 2023
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One of the key issues relating to the NPRM pertains to consent being sent directly to/obtained by one seller at a time.

The FCC has now circulated its proposed rule.  It has not been adopted yet but it looks like it will be in December when voted upon.  It looks like the rule will become effective in or around August or September of 2024.

In pertinent part, the FCC ruling would require terminating mobile wireless providers to block all texts from a particular number when notified by the FCC of illegal texts from that number; codify that the National Do-Not-Call Registry’s protections extend to text messages; and close the lead generator loophole by making unequivocally clear that comparison shopping websites must get consumer consent one seller at a time.

Additionally, as amended “prior express written consent” shall be revised to read, as follows:  “The term prior express written consent means an agreement, in writing, that bears the signature of the person called that clearly and conspicuously authorizes no more than one identified seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice.”  The “seller” is not the a lead generator.  It is the provider of the products or services

Moreover, “calls must be logically and topically associated with the interaction that prompted the consent and the agreement must identify the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered.”  “[R]obotexts and robocalls that result from consumer consent obtained on comparison shopping websites must be logically and topically related to that website.  

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FTC and FCC Renew Memorandum of Understanding to Promote Cross-Border Law Enforcement Efforts to Combat Spam, Scams and Illegal Telemarketing

By Richard Newman / September 27, 2023
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On September 21, 2023, the Federal Trade Commission announced that it has joined the Federal Communications Commission in signing a renewed memorandum of understanding (MOU) between public authorities who are members of the Unsolicited Communications Enforcement Network (UCENet).  The MOU aims to promote cross-border collaboration to combat unsolicited communications, including email and text spam, scams, and illegal telemarketing.

“The FTC is committed to using all of its tools to fight robocalls and other unsolicited communications that try to prey on consumers,” said FTC attorney and Chair Lina M. Khan.  “This scourge does not respect borders, and our recommitment to this MOU underscores the importance of international communication and cooperation to combat this problem.”

UCENet members agreed to renew and make evergreen the MOU, a non-binding instrument which the FTC and its partners signed in 2016.

The 2016 MOU was aimed at facilitating information sharing, capacity building, and enforcement assistance among the partners.  For the past seven years, it also has facilitated communication about emerging threats and complaint trends related to spam, scams, and illegal telemarketing.

The UCENET MOU is part of the FTC’s continuing to work to fight harms that can arise from unwanted messages.  According to the announcement, unsolicited communications in the form of illegal and spoofed robocalls, text messages, and emails are often the source of scams that harm millions of consumers in the United States each year.  The revised MOU also has been signed by UCENet partners in Canada,

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Telemarketing Friendly Amendments to Florida Telephone Solicitation Act Signed Into Law

By Richard Newman / May 28, 2023
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The Florida Telephone Solicitation Act (“FTSA”) has long been criticized for numerous reasons, including an overly broad and vague autodialer definition.  Florida’s Governor recently signed HB 761, which makes significant, telemarketer friendly changes, to the FTSA (Fla. Stat. § 501.059).

Fewer Types of Telemarketing Equipment Covered

The amendments narrow the types of telemarketing equipment covered by the statute.

For example, prior the the amendments, autodialing restrictions applied to “automated system[s] for the selection or dialing of telephone numbers.”  Now, the amended autodialing restrictions apply only to “automated system[s] for the selection and dialing of telephone numbers.”  The foregoing effectively eliminates the legal argument that a dialing or texting platform falls under the statute even if the calling party manually selects or dials a telephone number to be called or texted.

Caveat, the amended version of the statutes continues to restrict “the playing of a recorded message when a connection is completed to a number called, or the transmission of a prerecorded voicemail.”

Text Message Notice and Cure Period

The revised statute provides for a fifteen (15) day notice and cure period before a plaintiff is permitted to initiate formal legal action.  For example, by responding “STOP” to message.

Expanded Definition of “Signature”

The modified statute has a broadened definition of “signature” and includes “checking a box” and “responding affirmatively to receiving text messages.”  Digital signatures may be acceptable  to obtain prior express written consent provided that “such form of signature is recognized as a valid signature under applicable federal law or state contract law.”

Retroactive Application

Florida Telephone Solicitation Act class action cases that are not certified prior to the effective date of the statutory amendments are subject to the retroactive application of the new legislation. 

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FTC Attorney Update on Existential Threat to Lead Generation Industry Arising Out of FCC Notice of Proposed Rulemaking

By Richard Newman / May 18, 2023
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As previously blogged about here, the FCC recently proposed a rule that would turn the lead generation on its head.  The proposed new rule goes quite a bit further than simply requiring wireless carriers to block texts from illegitimate numbers.

In addition to carrier investigation and blocking obligations, as well as an extension of DNC protections to text messages, the FCC proposes:

“…to ban the practice of obtaining a single consumer consent as grounds for delivering calls and text messages from multiple marketers on subjects beyond the scope of the original consent.”

In an illustration of the issue, Company A describes a website that purports to enable consumers to comparison shop for insurance.  The website sought consumer consent for calls and texts from insurance companies and other various entities, including Company A’s ‘partner companies.’  The ‘partner companies’ were listed in a hyperlink on the web page (i.e., they were not displayed on the website without clicking on the link) and the list of ‘partner companies’ included both insurance companies and other entities that did not appear to be related to insurance.”

Public Knowledge, an influential non-profit Washington, D.C.-based public interest group argues that lead generators and data brokers use hyperlinked lists to harvest consumer telephone numbers and consent agreements on a website and pass that information to telemarketers and scam callers.  Commentors have argued that the telemarketer that obtains the consumer’s contact information from the lead generator may believe that it has the consumer’s prior express consent,

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FTC Action Alleges Violation of Telemarketing Sales Rule for Delivering Ringless Voicemails

By Richard Newman / February 28, 2023
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The Federal Trade Commission recently announced that it has taken action to stop an alleged interconnected web of operations purportedly responsible for delivering tens of millions of unwanted Voice Over Internet Protocol and ringless voicemail bogus debt service robocalls to consumers nationwide.

The Department of Justice (DOJ) filed the complaint in federal court on the FTC’s behalf.

The DOJ also filed a proposed consent order against one of the companies and individuals involved in the operation, which would, if approved by the court, bar them from making further misrepresentations about debt relief services and ordering them to comply with the Telemarketing Sales Rule.

“This case targets the ecosystem of companies who perpetrate illegal telemarketing to cheat American consumers who are struggling financially,” said FTC lawyer Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.  “The FTC will continue to take aggressive action to protect consumers from the scourge of illegal robocalls.”

“The Department of Justice is committed to stopping individuals and companies from making illegal robocalls and peddling predatory debt relief services,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.  “We will continue to work with the FTC to enforce the FTC Act and the Telemarketing Sales Rule against those who use misleading sales tactics to prey on consumers.”

According to the complaint, Stratics Networks, Inc.’s outbound calling service enabled its clients to route and transmit millions of robocalls using VoIP technology.  

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FCC Proposes Rule That Would Severely Impact Text Messaging and Result in BIG Lead Generation Implications

By Richard Newman / February 27, 2023
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Lead generators beware.  The FTC has issued a Notice of Proposed Rulemaking that would turn the lead generation industry on its head.

Amongst numerous items currently on the FCC’s agenda, there is discussion on closing the “lead generator” loophole.

The FCC Chairwoman has proposed a new rule that would block unlawful robotexts.  Read more, here.

The FCC first issued a Report and Order requiring mobile wireless providers to block text messages from numbers on a reasonable Do Not Originate list, which includes numbers that purport to be from invalid, unallocated or unused North American Numbering Plan numbers, and numbers for which the subscriber to the number has requested that texts purporting to originate from that number be blocked.  The FCC already requires similar blocking of voice calls by gateway providers.

The Report and Order would also ensure that any erroneous text blocking can be reported to the provider doing the blocking by requiring mobile wireless providers to maintain a single point of contact for texters to report erroneously blocked texts. This single point of contact is already required for voice call blocking.

Even more significant for lead generators is that the FCC has issued a NPRM that would require carriers to “investigate and potentially block texts from a sender after they are on notice from the Commission that the sender is transmitting suspected illegal texts…”

Additionally, the FCC has proposed an extension of DNC protections to text messages. 

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New NY Telemarketing Law Demands Immediate Disclosure of DNC Right

By Richard Newman / December 11, 2022
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On December 6, 2022, New York Governor Kathy Hochul signed legislation intended to crack down on unwanted telemarketing calls.

Legislation (S.8450-B/A.8319-C) requires telemarketers to give customers the option to automatically be added to the company’s do-not-call list at the beginning of certain telemarketing calls, right after the telemarketer’s name and solicitor’s name are provided, and before addressing the purpose of the call, etc.

Caveat, telemarketers that utilize pre-recorded messages must ensure that an automated means exists for consumers to have their telephone numbers suppressed.  Consult with a state attorney general (AG) defense lawyer about the applicability of the new legislation, adjustment of scripts, and the implementation of appropriate disclosures and suppression protocols.

We are dialing up our efforts to give New Yorkers a break from unsolicited telemarketing calls,” Governor Hochul said.  “For too long, New Yorkers have dealt with these nuisance calls, not knowing they can avoid these interactions by being added to a telemarketer’s do-not-call list.  This new legislation will protect New Yorkers from receiving frustrating, unwanted calls by better providing information on do-not-call lists.”

Under existing law (Section 399-Z), telemarketers are required to inform individuals that they may request to be added to their company’s do-not-call list. However, not at the beginning.  According to the NY Attornehy General’s office, consumers usually hang up before a telemarketer or recording has mentioned the do-not-call list, allowing telemarketers to continue calling them again and again.

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About This Blog and Hinch Newman’s Advertising + Marketing Practice

Hinch Newman LLP’s advertising and marketing practice includes successfully resolving some of the highest-profile Federal Trade Commission (FTC) and state attorneys general digital advertising and telemarketing investigations and enforcement actions. The firm possesses superior knowledge and deep legal experience in the areas of advertising, marketing, lead generation, promotions, e-commerce, privacy and intellectual property law. Through these advertising and marketing law updates, Hinch Newman provides commentary, news and analysis on issues and trends concerning developments of interest to digital marketers, including FTC and state attorneys general advertising compliance, civil investigative demands (CIDs), and administrative/judicial process. This blog is sponsored by Hinch Newman LLP.

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