for Business

FACTS

s the supervisor of a telemarketing sales force, you know that your

employees’ communications with prospective magazine subscription purchasers must be clear and courteous, and that their sales

solicitations must be accurate, truthful, and complete. It makes good business

sense — and it’s the law.

Through its enforcement of the Telemarketing Sales Rule and other laws, the

Federal Trade Commission regulates the telephone sale of consumer products,

including magazine subscriptions. The Telemarketing Sales Rule requires that

you keep certain records about advertising and promotional materials, recipients

of prizes of $25 or more, sales, sales employees, and verifiable approvals for

demand drafts for two years from the date that records are made.

Guidelines for Managers

of Telemarketing Enterprises

Who Sell Magazine

Subscriptions

TELEMARKETING

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The FTC and the Magazine Publishers of

America have written this guide for

telemarketing professionals who sell magazine

subscriptions.

Initial Contact: After Youve Said Hello

When you are making an outbound call, you

must disclose clearly and promptly, prior to the

consumer’s purchase, and in a way that is

unlikely to mislead the consumer:

• That the purpose of your call is to sell magazine subscriptions.

• Who is selling the magazine subscriptions.

• A description of the magazine subscriptions

you are selling.

You must not misrepresent the reasons why

the consumer was chosen for the call. You may

not suggest that the consumer was “specially”

selected because he or she is a “good customer,”

a contest winner, or a survey participant —

unless that is true.

Prize Promotions:

You Never Have to Pay to Play

If you are offering a prize promotion in

connection with an outbound call solicitation,

you must state clearly and promptly, and prior to

purchase, that no purchase is necessary to play or

to win. You also must disclose:

• A description of any prize you offer in the

sales promotion and a statement of its value.

• The “no purchase/no payment” way consumers can participate in the prize promotion

with instructions on how to participate, or an

address or toll-free telephone number where

consumers can get instructions on how to

participate.

• The odds of winning the prize in the promotion or the factors used to calculate the odds.

• Any material costs, restrictions, limitations,

or conditions on receiving, redeeming or

using a prize that you offer in the promotion.

Sympathy Appeals and Enticements:

No Lies Allowed

The law does not allow you to make false

statements to encourage a purchase.

Specifically, you must not falsely state that:

• You are affiliated with an educational,

charitable, social, or governmental organization or cause, that you are selling subscriptions on their behalf, or that they will receive

part of the sales proceeds.

• The consumer’s subscriptions will be distributed as gifts to educational, charitable, social,

or governmental organizations or causes.

• The consumer’s relatives or friends will

receive free gift subscriptions.

• You are working your way through school or

competing for a scholarship or in a contest.

That is, you must not make false statements

to create a sympathy appeal about yourself

— including claiming illness, disease, disability, or low-income or student status.

• Consumers will receive free gifts, goods, or

services with the purchase of magazine

subscriptions unless the subscription costs the

same as or less than the regular subscription

price (or “basic” subscription price published

in the magazine).

• The subscription is available at a special or

reduced rate unless the cost of the subscription is less than the regular subscription price

(or “basic” subscription price published in

the magazine) and less than the price that

similar subscriptions have been sold in

substantial quantities to similar consumers.

• The subscription is being offered free unless

the cost of any other subscription(s) or other

products that the consumer must purchase to

get the free subscription is no more than the

cost the consumer must pay to buy the other

subscription(s) or other products without

receiving the free subscription.

• The subscription is available at a reduced rate

because the consumer will be charged only

for postage or for shipping and handling.
Payment and Subscription Terms:

Just the Facts

Before the consumer buys any subscription, you

must clearly state:

• The total costs of the subscription(s); if you

state the price of installment payments, you

must give the amount of each installment and

the total number of installment payments.

• The name and duration of each magazine

subscription in your solicitation, including

the number of issues or frequency of each

subscription.

• A description of all material restrictions on

the subscriptions, including the amount of

any down payment that is required or the

form of payment that is required.

Consumer Authorization For Payment:

Getting The Okay

If you ask consumers for their bank account

numbers to facilitate payment through “phone

checks” or “demand drafts,” you must get the

consumer’s advance “express verifiable

authorization.” You can do this in one of three

ways:

• By getting advance written authorization,

• By tape recording the consumer giving

express oral verification, or

• By sending written confirmation of the

transaction to the consumer before you

submit the draft for payment.

At the same time, you must not:

• Bill a consumer’s credit card without their

express authorization.

• Mislead a consumer about the reason you are

asking for account information.

• Invoice the consumer for the subscription

orders unless the consumer has expressly

ordered the subscription.

Cancellation and Refund Rights:

The Fine Print

You must not misrepresent the consumer’s right

to cancel. Before the purchase, you must clearly

and truthfully disclose:

• Any “no refund” or “no cancellation” policy,

if you have such a policy.

• If you talk about refund, cancellation,

exchange or repurchase options during your

solicitation, you must disclose all material

terms and conditions of your refund and

cancellation policy.

• If you have a policy of accepting cancellations or making refunds or exchanges, you

don’t have to raise the subject. But if

you do — or if the consumer requests

information — you must clearly disclose all

material terms and conditions of your refund,

cancellation or exchange policy.

Order Fulfillment:

Delivering the Magazines

You may not sell subscriptions to — and accept

payment for — magazines that you have no

authority to sell.

It’s not necessary to mention when the first

issue of each magazine subscription order will be

shipped to the consumer if you have a reasonable

basis to expect that it will be shipped within 30

days of the order (or 50 days if the consumer

applies for credit).

However, it is necessary to:

• State clearly how long you reasonably expect

it will take before the first issue of each

magazine subscription order is shipped if that

time period will be more than 30 days (or

50 days if credit is requested) from the

order; and

• If first shipment is delayed beyond 30 days

(if no shipment time was stated) or beyond

the shipment time stated, you must then offer

the consumer the option to accept a new

delayed shipment date that you have reason
Federal Trade Commission

Bureau of Consumer Protection

Office of Consumer and Business Education

March 2000

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to believe will be met, or to cancel the subscription and get a full refund.

Guarantees and Bonds

You must not:

• Falsely describe any guarantees you make

about the placement, fulfillment, or delivery

of the magazine subscription orders.

• Make false statements about the fact that you

are bonded — or about the nature or conditions of your bond.

Assisting in Deceptive Telemarketing

Practices: Who Are You Dealing With?

You should take reasonable steps to determine

whether someone is engaged in any deceptive

telemarketing practice before you assist them.

According to the Telemarketing Sales Rule, you

must not provide substantial assistance or

support for another seller or telemarketer if you

know — or consciously avoid knowing — that

he or she is engaged in deceptive practices.

Support includes, but is not limited to sponsoring

promotions, sending confirmation letters, prize

certificates and bonuses to consumers for another

seller or telemarketer, or billing consumers’

credit cards.

Restrictions on Phone Calls and Abusive

Practices: Respecting the Customer

You must not:

• Threaten, intimidate, or use obscene language when you make sales calls.

• Cause a phone to ring or engage consumers

in phone conversations, repeatedly or continuously, to annoy, abuse, or harass the

person who answers the phone.

• Call consumers who have previously said

they do not wish to get calls from you or the

seller of the magazine subscriptions that you

are selling.

• Call consumers’ homes earlier than 8 AM or

later than 9 PM local time — unless you have

their permission in advance.

For more information about complying

with the Telemarketing Sales Rule, contact:

Federal Trade Commission

Consumer Response Center

600 Pennsylvania Avenue, NW

Washington, DC 20580

Toll-Free 1-877-FTC-HELP (382-4357)

www.ftc.gov

If your business has been a victim of fraud,

you can file a complaint with the FTC by contacting the Consumer Response Center or by

using the online complaint form at www.ftc.gov.

Although the Commission cannot resolve individual problems, it can act if it sees a pattern of

possible law violations.

The FTC publishes free brochures on many

business and consumer issues. For a complete list

of publications, visit the FTC online at

www.ftc.gov. Click on Consumer Protection. Or,

write for Best Sellers, Consumer Response

Center, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580; or

call toll-free 1-877-FTC-HELP (382-4357),

TDD: 202-326-2502.