In the five years since the Telemarketing Sales Rule (TSR) has been in effect, the Federal Trade Commission has brought 121 law enforcement actions alleging rule violations.
The actions have resulted in a number of penalties including monetary judgments totaling more than $152 million in consumer redress and $500,000 in civil penalties, the FTC said in a statement.
Three-quarters of the actions have been concluded and also resulted in injunctions against misrepresentations and future violations of the rule and outright bans against some or all forms of telemarketing in some cases. The U.S. Department of Justice, acts on behalf of the FTC to bring the actions.
The FTC has targeted a wide variety of scams. Some defendants promised loans and credit cards for an advance fee, but never delivered. Others misled consumers by telling them that they were not currently protected against credit card fraud, and mistakenly claimed that if the consumers did not purchase their services, they could be held liable for all unauthorized charges made with their cards. Some defendants operated travel scams, misrepresenting the total cost of the vacation travel package offered, and failed to disclose material restrictions on the use of the package, such as requiring attendance at timeshare sales presentations. Still others engaged in phony prize promotions, fraudulently offering purportedly valuable prizes to consumers to induce them to purchase products.
The rule was mandated by Congress through the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994 and has been in effect since Dec. 31, 1995. It requires telemarketers to make specific disclosures of material information; prohibits misrepresentations; limits the hours that telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets payment restrictions for the sale of certain goods and services. It also authorizes state Attorneys General to enforce the TSR in federal court.
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