FTC Focuses on Technology At TSR Roundtable

The Federal Trade Commission does not appear inclined to make drastic changes in the Telemarketing Sales Rule, according to one participant in the FTC’s roundtable discussion of the law on held last week.

Tim Searcy, president/CEO of Optima Direct, Vienna, VA, who represented the American Teleservices Association at the discussion, said the FTC appeared more interested in making sure the law was applied fairly and that it would continue to be effective with 21st century technology.

“The impression you would get is that the FTC understands the value of the TSR and how effective it has been,” he said. “And whatever modifications they might consider, it appears, based on their question series, would be just things to make the TSR more consistent and easily used. None of their questions gave the impression of any major changes in the way the TSR is designed.”

He cautioned, however, that the FTC still had additional steps to go through in its process of reviewing the law and that it could introduce changes that affect the telemarketing industry.

The TSR was created in 1995 primarily as a means to reduce telemarketing fraud, and it is widely supported by legitimate telemarketers. The FTC is undertaking a scheduled review of the law to determine if there are any modifications that need to be made because of advancements in technology during the past five years and other factors.

One of the main areas that the FTC representatives focused on, Searcy said, was the evolution of payment systems. The TSR contains detailed guidelines about how telemarketers can process credit card information, and Searcy said the FTC was interested in how newer payment methods, such as Internet-based checking accounts, were being handled in call centers.

“The commission seemed very curious and concerned about what is the future of payment methods and how do they ensure that those types of things get handled well going forward,” he said. “I think the consensus of the people representing the industry was that you apply the same rules as you apply to credit cards. I think most of us by default have already done that.”

The FTC also was interested in the use of caller-identification systems. Industry experts testified that it was not technologically feasible for telemarketers to make their numbers appear on consumers’ caller-ID displays.

Both Searcy and Jerry Cerasale, senior vice president of public affairs at the Direct Marketing Association, said that when the technology does become available to make telemarketers’ numbers visible, those numbers should be customer service numbers rather than the actual number that originated the call.

“[We are] concerned that consumers would dial to a number that was not connected or was not able to receive calls, and that would create further frustration or confusion on the part of consumers,” Searcy said.

Also, Searcy said that a suggestion by privacy advocates that the use of predictive dialers was a violation of the Telephone Consumer Protection Act and possibly the TSR was not taken very seriously.

“That wasn’t really well received by anyone as a legitimate argument,” he said. “The commission did not seem receptive to the argument, and they did not explore it in any depth.”

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