FTC Makes Changes to Telemarketing Rules, Bans Certain Payment Methods
Changes in the federal laws overseeing telemarketing may help keep consumers from getting scammed.
The Federal Trade Commission (FTC) approved changes to the Telemarketing Sales Rule (TSR) to ban certain kinds of payment methods often used by scammers.
Unlike honest telemarketers who use payment methods that can be disputed and traced, scammers tend to use those that are untraceable and money can be difficult to retrieve. Scammers use quick cash transfers to take money from victims because once it is retrieved, the money is gone.
Telemarketers will no longer be able to dip directly into a consumer's bank account using certain kinds of checks and payment orders that have been remotely created by the telemarketer or seller. Both payment methods make it easy for telemarketers to debit bank accounts without the consumer's permission and it can be difficult to reverse the transaction.
Similarly, cash reload mechanisms like MoneyPak, Vanilla Reload, or Reloadit packs are also banned. These packs add funds to existing prepaid cards and scammers use the cash reload mechanism to apply the funds to their own prepaid debit cards and disappear with the money.
On the industry side, major providers of these products recently replaced the cash reload mechanism with a swipe reload process, which is a safer alternative not affected by the TSR.
The amendments also strengthen rules related to the National Do Not Call Registry. Among other things, if telemarketers call a number on the National Do Not Call Registry, they must demonstrate that it has an existing business relationship with, or has received and express written agreement from the consumer. A description of the goods and services purchased must be included in a tape recording of the consumer's express verifiable authorization to be charged. Sellers are also prohibited from sharing the cost of the fees to access the registry.
The commission approved the publication of the rule changes to the Federal Register in a 3 to 1 vote, with Commissioner Maureen Ohlhausen voting no.