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UNITED STATES DISTRICT COURT 

MIDDLE DISTRICT OF FLORIDA 

CASE NO. ____________ 

FEDERAL TRADE COMMISSION, 

Plaintiff, 

v. 

GRAND BAHAMA CRUISE LINE, LLC, et al., 

Defendants. 

STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY 

JUDGMENT AGAINST CHRISTOPHER COTRONEO 

Plaintiff, the Federal Trade Commission (“Commission” or “FTC”), filed its Complaint 

for civil penalties, permanent injunction, and other relief (“Complaint”), pursuant to Sections 

5(a), 5(m)(1)(A), 13(b), 16(a) and 19 of the Federal Trade Commission Act (“FTC Act”), 15 

U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), 56(a) and 57b, and Section 6 of the Telemarketing and 

Consumer Fraud and Abuse Prevention Act (the “Telemarketing Act”), 15 U.S.C. § 6105. 

Settling Defendant Christopher Cotroneo has waived service of the summons and the Complaint. 

Plaintiff and Settling Defendant Christopher Cotroneo stipulate to the entry of this Stipulated 

Final Order for Permanent Injunction and Civil Penalty Judgment (“Order”) to resolve all 

matters in dispute in this action between them. 

THEREFORE, IT IS ORDERED as follows: 

FINDINGS 

1. This Court has jurisdiction over this matter. 

2. The Complaint charges that Defendant participated in unfair acts or practices in violation 

of Section 5 of the FTC Act, 15 U.S.C. § 45 and the FTC’s Telemarketing Sales Rule (the “TSR” 
 

 

 

 

 

 

 

 

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or “Rule”, as amended, 16 C.F.R. Part 310, by, among other things, assisting and facilitating: 

(a) placing telemarketing calls to consumers that delivered prerecorded messages; (b) placing 

telemarketing calls to consumers whose telephone numbers were on the National Do Not Call 

(“DNC”) Registry; and (c) transmitting inaccurate caller ID numbers and names with their 

telemarketing calls. 

3. Settling Defendant neither admits nor denies any of the allegations in the Complaint, 

except as specifically stated in this Order. Only for purposes of this action, Settling Defendant 

admits the facts necessary to establish jurisdiction. 

4. Settling Defendant waives any claim that he may have under the Equal Access to Justice 

Act, 28 U.S.C. § 2412, concerning the prosecution of this action through the date of this Order, 

and agrees to bear his own costs and attorney fees. 

5. Settling Defendant waives all rights to appeal or otherwise challenge or contest the 

validity of this Order. 

DEFINITIONS 

For the purpose of this Order, the following definitions apply: 

A. “Defendants” means Grand Bahama Cruise Line, LLC; Ultimate Vacation Group, LLC, 

also d/b/a Royal Bahama Cruise Line, LLC; Tropical Accommodations LLC, also d/b/a; 

Grand Celebration Cruise Line; VSC, LLC; Florida V.S.C., LLC, and their successors 

and assigns; and Johnathan Blake Curtis; Anthony DiGiacomo; and Christopher 

Cotroneo. 

B. “Established Business Relationship” means a relationship between a Seller and a 

person based on: (a) the person’s purchase, rental, or lease of the Seller’s goods or 

services or a financial transaction between the Seller and person, within the eighteen 

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months immediately preceding the date of the Telemarketing call; or (b) the person’s 

inquiry or application regarding a product or service offered by the Seller, within the 

three months immediately preceding the date of a Telemarketing call. 

C. “Lead Generator” means any person that provides, in exchange for consideration, 

consumer information to a Seller or Telemarketer for use in the Telemarketing of any 

goods or services. 

D. “National Do Not Call Registry” means the National Do Not Call Registry, which is the 

“do-not-call” registry maintained by the Commission pursuant to 16 C.F.R. 

§ 310.4(b)(1)(iii)(B). 

E. “Outbound Telephone Call” means a telephone call initiated by a telemarketer to induce 

the purchase of goods or services or to solicit a charitable contribution. 

F. “Seller” means any person who, in connection with a Telemarketing transaction, 

provides, offers to provide, or arranges for others to provide goods or services to the 

customer in exchange for consideration, whether or not such person is under the 

jurisdiction of the Commission. 

G. “Settling Defendant” means Christopher Cotroneo. 

H. “Telemarketing” means a plan, program, or campaign which is conducted to induce the 

purchase of goods or services or a charitable contribution, by use of one or more 

telephones and which involves more than one interstate telephone call. 

ORDER 

I. PERMANENT BAN ON ROBOCALLS 

IT IS ORDERED that Settling Defendant, whether acting directly or through an 

intermediary, is permanently restrained and enjoined from: 

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A. Engaging in, or assisting others to engage in or assisting others engaging in the 

initiation of any Outbound Telephone Call that delivers a prerecorded message, 

unless such Defendant proves that such prerecorded message was delivered for the 

purposes of Section II.C.3 of this Order. 

B. Controlling, holding a managerial post in, consulting for, serving as an officer in, 

having any revenue sharing agreement with, or holding any ownership interest, share, 

or stock in any company that engages in conduct prohibited in paragraph A of this 

Section. Provided, however, that it is not a violation of this Order to own a noncontrolling interest in a publicly-traded company that engages in such conduct. 

II. PROHIBITIONS ON ABUSIVE TELEMARKETING 

IT IS FURTHER ORDERED that Settling Defendant, his agents, and employees, and all 

other persons in active concert or participation with any of them, who receive actual notice of 

this Order, whether acting directly or indirectly, in connection with Telemarketing, is 

permanently restrained and enjoined from engaging in, causing others to engage in, or 

assisting others engaging in, any of the following practices: 

A. Initiating any Outbound Telephone Call to any telephone number listed on the National 

Do Not Call Registry, unless the Settling Defendant proves that the call was placed on 

behalf of a Seller to a person from whom the Seller had: 

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1) Obtained the express agreement, in writing, of such person to place calls to that 

person—such written agreement must clearly evidence such person’s authorization 

that calls made by or on behalf of the Seller may be placed to that person, and must 

include the telephone number to which the calls may be placed and the signature of 

that person; or 

2) An Established Business Relationship with such person, and that person has not 

stated that he or she does not wish to receive Outbound Telephone Calls made by or 

on behalf of the Seller. 

B. Initiating any Outbound Telephone Call to a person when that person has previously 

stated that he or she does not wish to receive an Outbound Telephone Call made by or on 

behalf of either the Seller whose goods or services are being offered, or made by or on 

behalf of the charitable organization for which a charitable contribution is being solicited. 

C. Abandoning any Outbound Telephone Call to a person by failing to connect the call to a 

live operator within two seconds of the person’s completed greeting, unless the Settling 

Defendant proves that the following four conditions are met: 

1) The caller employs technology that ensures abandonment of no more than three 

percent of all calls answered by a person, measured over the duration of a single 

calling campaign, if less than thirty days, or separately over each successive 30-day 

period or portion thereof that the campaign continues; 

2) The caller, for each telemarketing call placed, allows the telephone to ring for at least 

fifteen seconds or four rings before disconnecting an unanswered call; 

3) Whenever a live operator is not available to speak with the person answering the call 

within two seconds after the person’s completed greeting, the caller promptly plays a 

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recorded message that states the name and telephone number of the seller or 

charitable organization on whose behalf the call was placed; and 

4) The caller retains records, in accordance with 16 C.F.R. § 310.5(b)–(d), establishing 

compliance with the preceding three conditions. 

D. Failing to disclose truthfully, promptly and in a clear and conspicuous manner the 

identity of the Seller, that the purpose of the call is to sell goods or services, and the 

nature of the goods or services. 

E. Failing to transmit or cause to be transmitted to any Caller Identification Service in use 

by a recipient of a telemarketing call: (i) the telephone number of the telemarketer 

making the call, or the telephone number for customer service of the seller on whose 

behalf the call is made; and, (ii) when made available by the telemarketer’s carrier, the 

name of the telemarketer or seller to any Caller Identification Service in use by a 

recipient of a telemarketing call. 

F. Violating the Telemarketing Sales Rule, l6 C.F.R. Part 310, a copy of which is attached 

to this Order as Attachment A. 

III. LEAD GENERATOR REVIEW, NOTICE AND TERMINATION 

IT IS FURTHER ORDERED that: 

A. Settling Defendant shall, within ninety (90) days of the date of entry of this Order: 

1) Review and determine the methods used by Settling Defendant’s existing Lead 

Generators to obtain the leads sold or offered for sale to Settling Defendant and, if 

those leads were obtained by means of an Outbound Telephone Call that does not 

comply with this Order, Settling Defendant shall immediately cease purchasing 

leads from the Lead Generator unless and until Settling Defendant confirms that 

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the Lead Generator is in compliance pursuant to the requirements specified in 

Section III.B below; 

2) Provide, electronically or otherwise, Settling Defendant’s existing Lead 

Generators that use Outbound Telephone Calls to generate leads with: (i) a copy 

of this Order; and (ii) a written notice stating that, if such Lead Generator sells 

any leads to Settling Defendants that do not comply with this Order, Settling 

Defendants will immediately cease purchasing leads from such Lead Generator; 

and 

3) Obtain from all of Settling Defendant’s existing Lead Generators provided notice 

pursuant to Section III.A.2 above an electronic acknowledgment or other signed 

and dated statement acknowledging receipt of this Order and the written notice set 

forth in the preceding subparagraph. 

B. Prior to purchasing leads from any new Lead Generator, Settling Defendant shall: 

1) Review and determine the methods used by the Lead Generator to obtain leads 

offered for sale to Settling Defendants and, if those leads were obtained by means 

of a telephone call that does not comply with this Order, Settling Defendants are 

prohibited from purchasing such leads; 

2) For any Lead Generator previously terminated pursuant to Section III.A.1 above, 

conduct additional reviews, as specified in Section III.B.1 above, on a quarterly 

basis for one (1) year to ensure continued compliance with this Order; 

3) Provide, electronically or otherwise, Settling Defendant’s Lead Generators that 

use Outbound Telephone Calls to generate leads with: (i) a copy of this Order; 

and (ii) a written notice stating that, if such Lead Generator sells any leads to 

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Settling Defendants that do not comply with this Order, Settling Defendant will 

immediately cease purchasing leads from such Lead Generator; and 

4) Obtain from each new Lead Generator provided notice pursuant to Section III.B.3 

above an electronic acknowledgment or other signed and dated statement 

acknowledging receipt of this Order and the written notice set forth in the 

preceding subparagraph. 

IV. MONETARY JUDGMENT FOR CIVIL PENALTY AND PARTIAL 

SUSPENSION 

IT IS FURTHER ORDERED that: 

A. Judgment in the amount of Six Million Four Hundred Thousand Dollars ($6,400,000) is 

entered in favor of Plaintiff against Settling Defendant as a civil penalty. 

B. Settling Defendant is ordered to pay to Plaintiff, by making payment to the Treasurer of 

the United States, Two Thousand Five Hundred Dollars ($2,500), which, as Settling Defendant 

stipulates, his undersigned counsel holds in escrow for no purpose other than payment to 

Plaintiff. Such payment must be made within 7 days of entry of this Order by electronic fund 

transfer in accordance with instructions previously provided by a representative of Plaintiff. 

Upon such payment, the remainder of the judgment is suspended, subject to the Subsections 

below. 

C. Plaintiff’s agreement to the suspension of part of the judgment is expressly premised 

upon the truthfulness, accuracy, and completeness of Settling Defendant’s sworn financial 

statements and related documents (collectively, “financial representations”) submitted to the 

Commission, namely: 

1. the Financial Statement of Settling Defendant (Bates stamped 

COTRONEO_00024 to 00036) signed by Christopher Cotroneo on April 27, 2019, including the 

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attachments (Bates stamped COTRONEO_00001 to 00023 and COTRONEO_00037 to 00746), 

submitted by Settling Defendant’s counsel Mitchell Roth to Commission counsel on June 10, 

2019; 

2. the additional documentation (Bates stamped COTRONEO_00747 to 00937) 

submitted by Settling Defendant’s counsel Mitchell Roth to Commission counsel on June 29, 

2019; 

3. the revised Financial Statement of Settling Defendant initialed by Christopher 

Cotroneo on August 7, 2019 and submitted by Settling Defendant’s counsel Mitchell Roth to 

Commission counsel on August 7, 2019; and 

4. the declaration signed by Settling Defendant Christopher Cotroneo on September 

16, 2019 and submitted by Settling Defendant’s counsel Mitchell Roth to Commission counsel 

on October 25, 2019. 

D. The suspension of the judgment will be lifted as to Settling Defendant if, upon motion by 

the Commission or Plaintiff, the Court finds that Settling Defendant failed to disclose any 

material asset, materially misstated the value of any asset, or made any other material 

misstatement or omission in the financial representations identified above. 

E. If the suspension of the judgment is lifted, the judgment becomes immediately due as to 

Settling Defendant in the amount specified in Subsection A. above (which the parties stipulate 

only for purposes of this Section represents the amount of the civil penalty for the violations 

alleged in the Complaint), less any payment previously made pursuant to this Section, plus 

interest computed from the date of entry of this Order. 

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F. Settling Defendant agrees that the judgment represents a civil penalty owed to the 

government of the United States, is not compensation for actual pecuniary loss, and, therefore it 

is not subject to discharge under the Bankruptcy Code pursuant to 11 U.S.C. § 523(a)(7). 

G. Settling Defendant relinquishes dominion and all legal and equitable right, title, and 

interest in all assets transferred pursuant to this Order and may not seek the return of any assets. 

H. The facts alleged in the Complaint will be taken as true, without further proof, in any 

subsequent civil litigation by or on behalf of the Commission, including in a proceeding to 

enforce its rights to any payment or monetary judgment pursuant to this Order. 

I. Settling Defendant acknowledges that his Social Security Number, which he has 

submitted to the Commission, may be used for collecting and reporting on any delinquent 

amount arising out of this Order, in accordance with 31 U.S.C. §7701. 

V. CUSTOMER INFORMATION 

IT IS FURTHER ORDERED that Settling Defendant is permanently restrained and 

enjoined from directly or indirectly disclosing, using, or benefitting from customer information, 

including the name, address, telephone number, email address, social security number, other 

identifying information, or any data that enables access to a customer’s account (including a 

credit card, bank account, or other financial account), that any Defendant obtained prior to entry 

of this Order in connection with the telemarketing of cruise vacations. 

VI. COOPERATION 

IT IS FURTHER ORDERED that Settling Defendant must fully cooperate with 

representatives of Plaintiff and the Commission in this case and in any investigation related to or 

associated with the transactions or the occurrences that are the subject of the Complaint. Settling 

Defendant must provide truthful and complete information, evidence, and testimony. Settling 

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Defendant must appear for interviews, discovery, hearings, trials, and any other proceedings that 

a Plaintiff or Commission representative may reasonably request upon 10 days written notice, or 

other reasonable notice, at such places and times as a Commission representative may designate, 

without the service of a subpoena. 

Further, to assist the Commission with any investigation related to or associated with the 

transactions or the occurrences that are the subject of the Complaint, and with monitoring 

Settling Defendant’s compliance with this order, Settling Defendant consents, for purposes of the 

Electronic Communications Privacy Act, to the disclosure, by electronic communications service 

providers and remote computing service providers, of the contents of their auto-dialed, 

telemarketing, or pre-recorded telephone communications and records or other information 

pertaining to his autodialed, telemarketing, or pre-recorded telephone communications. Settling 

Defendant further agrees to execute, within five days of a request from the Commission, any 

forms or other documents evidencing his consent that may be required by such electronic 

communications service providers or remote computing service providers. 

VII. ORDER ACKNOWLEDGMENTS 

IT IS FURTHER ORDERED that Settling Defendant obtain acknowledgments of receipt 

of this Order: 

A. Settling Defendant, within 7 days of entry of this Order, must submit to the Commission 

an acknowledgment of receipt of this Order sworn under penalty of perjury. 

B. For 5 years after entry of this Order, Settling Defendant for any business that he, 

individually or collectively with any other Defendants, is the majority owner or controls directly 

or indirectly, must deliver a copy of this Order to: (1) all principals, officers, directors, and LLC 

managers and members; (2) all employees having managerial responsibilities for conduct related 

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to the subject matter of the Order and all agents and representatives who participate in conduct 

related to the subject matter of the Order and (3) any business entity resulting from any change in 

structure as set forth in the Section titled Compliance Reporting. Delivery must occur within 7 

days of entry of this Order for current personnel. For all others, delivery must occur before they 

assume their responsibilities. 

C. From each individual or entity to which Settling Defendant delivered a copy of this 

Order, he must obtain, within 30 days, a signed and dated acknowledgment of receipt of this 

Order. 

VIII. COMPLIANCE REPORTING 

IT IS FURTHER ORDERED that Settling Defendant make timely submissions to the 

Commission: 

A. One year after entry of this Order, Settling Defendant must submit a compliance report, 

sworn under penalty of perjury: 

1. Settling Defendant must: (a) identify the primary physical, postal, and email 

address and telephone number, as designated points of contact, which representatives of the 

Commission and Plaintiff may use to communicate with Defendant; (b) identify all of that 

Defendant’s businesses by all of their names, telephone numbers, and physical, postal, email, and 

Internet addresses; (c) describe the activities of each business, including the goods and services 

offered, the means of advertising, marketing, and sales, and the involvement of any other 

Defendant (which Settling Defendant must describe if he knows or should know due to his own 

involvement); (d) describe in detail whether and how that Defendant is in compliance with each 

Section of this Order; and (e) provide a copy of each Order Acknowledgment obtained pursuant 

to this Order, unless previously submitted to the Commission. 

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2. Additionally, Settling Defendant must: (a) identify all telephone numbers and all 

physical, postal, email and Internet addresses, including all residences; (b) identify all business 

activities, including any business for which such Defendant performs services whether as an 

employee or otherwise and any entity in which such Defendant has any ownership interest; and 

(c) describe in detail such Defendant’s involvement in each such business, including title, role, 

responsibilities, participation, authority, control, and any ownership. 

B. For 15 years after entry of this Order, Settling Defendant must submit a compliance 

notice, sworn under penalty of perjury, within 14 days of any change in the following: 

1. Settling Defendant must report any change in: (a) any designated point of contact; or (b) 

the structure of any entity that Settling Defendant has any ownership interest in or controls 

directly or indirectly that may affect compliance obligations arising under this Order, including: 

creation, merger, sale, or dissolution of the entity or any subsidiary, parent, or affiliate that 

engages in any acts or practices subject to this Order. 

2. Additionally, Settling Defendant must report any change in: (a) name, including aliases 

or fictitious name, or residence address; or (b) title or role in any business activity, including any 

business for which Settling Defendant performs services whether as an employee or otherwise 

and any entity in which he has any ownership interest, and identify the name, physical address, 

and any Internet address of the business or entity. 

C. Settling Defendant must submit to the Commission notice of the filing of any bankruptcy 

petition, insolvency proceeding, or similar proceeding by or against it within 14 days of its filing. 

D. Any submission to the Commission required by this Order to be sworn under penalty of 

perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by concluding: “I 

declare under penalty of perjury under the laws of the United States of America that the 

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foregoing is true and correct. Executed on: _____” and supplying the date, signatory’s full 

name, title (if applicable), and signature. 

E. Unless otherwise directed by a Commission representative in writing, all submissions to 

the Commission pursuant to this Order must be emailed to DEbrief@ftc.gov or sent by overnight 

courier (not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of 

Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, 

DC 20580. The subject line must begin: FTC v. Grand Bahama Cruise Line, LLC. 

IX. RECORDKEEPING 

IT IS FURTHER ORDERED that Settling Defendant must create certain records for 15 

years after entry of the Order, and retain each such record for 5 years. Specifically, Settling 

Defendant for any business that he, individually or collectively with any other Defendants, is a 

majority owner or controls directly or indirectly, must create and retain the following records: 

A. accounting records showing the revenues from all goods or services sold; 

B. personnel records showing, for each person providing services, whether as an employee 

or otherwise, that person’s: name; addresses; telephone numbers; job title or position; dates of 

service; and (if applicable) the reason for termination; 

C. records of all consumer complaints and refund requests, whether received directly or 

indirectly, such as through a third party, and any response; 

D. All records necessary to demonstrate full compliance with each provision of this Order, 

including, among other documents and information: 

1. All submissions to Plaintiff or the Commission; 

2. Records of all Outbound Telephone Calls dialed by Defendant or dialed 

on behalf of Defendant or his businesses by their vendors, contractors, or 

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Representatives, including for each call: (a) the number called; (b) the 

caller ID number displayed; (c) the time and date of the call; (d) the 

duration of the call; and (e) any telephone number or IP address to which 

the call was forwarded or transferred; and 

E. a copy of each unique advertisement or other marketing material. 

X. COMPLIANCE MONITORING 

IT IS FURTHER ORDERED that, for the purpose of monitoring Settling Defendant’s 

compliance with this Order, including the financial representations upon which part of the 

judgment was suspended, and any failure to transfer any assets as required by this Order: 

A. Within 14 days of receipt of a written request from a representative of the Commission or 

Plaintiff, Settling Defendant must: submit additional compliance reports or other requested 

information, which must be sworn under penalty of perjury; appear for depositions; and produce 

documents for inspection and copying. The Commission and Plaintiff are also authorized to 

obtain discovery, without further leave of court, using any of the procedures prescribed by 

Federal Rules of Civil Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, 

and 69. 

B. For matters concerning this Order, the Commission and Plaintiff are authorized to 

communicate directly with Settling Defendant. Settling Defendant must permit representatives 

of the Commission and Plaintiff to interview any employee or other person affiliated with him 

who has agreed to such an interview. The person interviewed may have counsel present. 

C. The Commission and Plaintiff may use all other lawful means, including posing, through 

its representatives as consumers, suppliers, or other individuals or entities, to Settling Defendant 

or any individual or entity affiliated with Settling Defendant, without the necessity of 

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_______________________________ 

Case 6:20-cv-00052-RBD-GJK Document 3-2 Filed 01/10/20 Page 16 of 32 PageID 109 

identification or prior notice. Nothing in this Order limits the Commission’s lawful use of 

compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1. 

XI. RETENTION OF JURISDICTION 

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for 

purposes of construction, modification, and enforcement of this Order. 

SO ORDERED this day of , 2020. 

UNITED STATES DISTRICT JUDGE 

SO STIPULATED AND AGREED: 

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FOR PLAINTIFF: 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

Page 17 of 18 
FEDERAL TRADE COMMISSION 

Date: } /'l> /~o 

Christ er E. Brown 

Jody oodman 

Federal Trade Commission 

600 Pennsylvania Ave., NW 

Mailstop CC-8528 

Washington, DC 20580 

(202) 326-2825; cbrown3@ftc.gov 

(202) 326-3096;jgoodmanl@ftc.gov 

Date: M°{- Mitchell t otb 

Roth Jackson Gibbons Condlin, PLC 

8200 Greensboro Drive, Suite 820 

McLean, Virginia 22102 

(703) 485-3536 

mroth (cv, ro th j ac kso n .com 

Attorney for Defendant Christopher Cotroneo 

Date: 

Christopher Cotroneo 

~ 

Page 18 of 18 

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PART 310-TELEMARKETING SALES § 310-1 Scope of re gulations in this 

RULE 16 CFR PART 310 part. 

This part implements the Telemarketing and Consumer Fraud and Sec. 

310.1 Scope of regulations in this part. Abuse Prevention Act, 15 U.S.C. 6101-

310.2 Definitions. 6108, as amended. 

310.3 Deceptive telemarketing acts or prac­ 310.2 Definitions. tices. § 

310.4 Abusive telemarketing acts or prac- (a) Acquirer means a business organitices. zation , financial institution, or an 310.5 Recordkeeping requirements. agent of a business organization or fi310.6 Exemptions. nancial institution that has authority 310.7 Actions by states and private persons. from an organization that operates or 310.8 Fee for access to the National Do Not licenses a credit card system to author­ Call Registry. ize merchants to accept, transmit, or 310.9 Severability. process payment by credit card 

AUTHORITY: 15 U.S.C. 6101- 6108. through the credit card system for 

SOURCE: 75 FR 48516, Aug. 10, 2010, unless money, goods or services, or anything 

otherwise noted. else of value. 

380 

Attachment A 

Case 6:20-cv-00052-RBD-GJK Document 3-2 Filed 01/10/20 Page 19 of 32 PageID 112 
Federal Trade Commission §310.2 

(b) Attorney General means the chief (n) Donor means any person solicited 

legal officer of a state. to make a charitable contribution. 

(c) Billing information means any data (o) Established business relationship 

that enables any person to access a means a relationship between a seller 

customer's or donor's account, such as and a consumer based on: 

a credit card, checking, savings, share (1) the consumer's purchase, rental, or similar account, utility bill, mort­ or lease of th e seller's goods or services 

gage loan account, or debit card. or a financial transaction between the 

(d) Caller identification service means a consumer and seller, within the eigh tservice that allows a telephone sub­ een (18) months immediately preceding 

scriber to have the telephone number, the date of a telemark eting call; or and, where available, name of the call­ (2) the consumer's inquiry or applica­ ing party transmitted contempora­ tion regarding a product or service ofneously with the telephone call, and fered by t he seller, within the three (3) displayed on a device in or connected months immediately preceding the 

to the subscriber's telephone. date of a telemarketing call. 

(e) Cardholder means a person to (p) Free-to-pay conversion means, in 

whom a credit card is issued or who is an offer or agreement to sell or provide authorized to use a credit card on be­ any goods or services, a provision half of or in addition to the person to under which a customer receives a whom the credit card is issued. product or service for free for an initial 

(f) Charitable contribution means any period a nd will incur an obligation to 

donation or gift of money or any other pay for t he product or service if he or thing of value. she does not take affirmative action to 

(g) Commission means the Federal cancel before the end of that period. 

Trade Commission. (q) Investment opportunity means any­

(h) Credit means the right granted by thing, tangible or intangible, that is of­ a creditor to a debtor to defer payment fered, offered for sale, sold, or traded 

of debt or to incur debt and defer its based wholly or in part on representapaymen t. tions, either express or implied, about 

(i) Credit card means any card, plate, past, present, or future income, profit, 

coupon book, or other credit device ex­ or appreciation. 

isting for the purpose of obtaining (r) Material means likely t o affect a money, property, labor, or services on person's choice of, or conduct regardcredit. ing, goods or services or a charitable 

(j) Credit card sales draft means any contribution. 

record or evidence of a credit card (s) Merchant means a person who is 

transaction . authorized under a written contract 

(k) Credit card system means any with an acquirer to honor or accept 

method or procedure used to process credit cards, or to transmit or process 

credit card transactions involving cred­ for payment credit card payments, for 

it cards issued or licensed by the oper­ the purchase of goods or services or a 

ator of that system. chari table contribution. 

(1) Customer means any person who is (t) Merchant agreement means a writor may be requir ed to pay for goods or ten contract between a merchant and 

services offered through tele­ an acquirer to honor or accept credit 

marketing. cards, or to transmit or process for 

(m) Debt relief service means any pro­ payment credit card payments, for the 

gram or service represented, directly or purchase of goods or services or a charby implication, to renegotiate, settle, itable contribution. 

or in any way alter t he terms of pay­ (u) Negative option feature means, in 

ment or other terms of the debt be­ an offer or agreement to sell or provide 

tween a person and one or more unse­ any goods or services, a provision 

cured creditors or debt collectors, in­ under which the customer's silence or 

cluding, but not limited to, a reduction fail ur e to take an affirmative action to 

in the balance, interest rate, or fees reject goods or services or to cancel the 

owed by a person to an unsecured cred­ agreement is interpreted by the seller 

itor or debt collector. as acceptance of the offer. 

381 

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§310.3 16 CFR Ch. I (1-1-14 Edition) 

(v) Outbound telephone call means a which: contains a written description 

telephone call initiated by a tele­ or illustration of t he goods or services 

marketer to induce the purchase of offered for sale; includes the business 

goods or services or to solicit a chari­ address of the seller; includes multiple 

table contribution. pages of written material or illustra­

(w) Person means any individual, tions; and has been issued not less fregroup, unincorporated association, lim­ quently than once a year, when the 

ited or general partnership, corpora­ person making the solicitation does 

tion, or other business entity. not solicit customers by telephone but 

(x) ?reacquired account information · only receives calls initiated by cusmeans any information that enables a tomers in response to the catalog and 

seller or telemarketer to cause a during those calls takes orders only 

charge to be placed against a cus­ withou t further solicitation. For purtomer's or donor's account without ob­ poses of the previous sentence, the 

taining the account number directly term "further solicitation" does not 

from the customer or donor during the include providing the customer with 

information about, or attempting to telemarketing transaction pursuant to 

which the account will be charged. sell, any other item included in the 

(y) Prize means anything offered, or same catalog which prompted the cus­ tomer's call or in a substantially simi­ purportedly offered, and given, or purportedly given, to a person by chance. lar catalog. 

(ee) For purposes of this definition, chance Upselling means soliciting the 

purchase of goods or services following exists if a person fs guaranteed to re­ an initial t ransaction during a single ceive an item and, at the t ime of the telephone call. The upsell is a separate offer or purported offer, the telemarketer telemarketing transaction, not a con­ does not identify the specific tinuation of t he initial transaction. An item that the person will receive. "external upsell" is a solicitation (z) Prize promotion means: made by or on behalf of a seller dif­ (1) A sweepstakes or other game of ferent from the seller in the initial chance; or transaction, regardless of whether the (2) An oral or written express or iminitial transaction and t)le subsequent plied representation that a person has 

won, solicitation are made by the same tele­ has been selected to receive, or 

may marketer. An " internal upsell" is a so­ be eligible to receive a prize or licitation made by or on behalf of the purported prize. same seller as in the initial trans­ (aa) Seller means any person who, in action, regardless of whether the ini­ connection with a telemarketing trans­ tial transaction and subsequent solici­ action, provides, offers to provide, or tation are made by the same tele­ arranges 'for others to provide goods or marketer. services to the customer in exchange 

for consideration. § 310.3 Deceptive telemarketing acts or (bb) State means any state of the practices. United States, the District of Colum­ Prohibited deceptive telemarketing bia, Puerto Rico, the Northern Mariana (a) 

acts or practices. It is a deceptive tele­ Islands, and any territory or possession marketing act or practice and a viola­ of the United States. tion of this Rule for any seller or tele­ (cc) Telemarketer means any person marketer to engage in the following who, in connection with telemarketing, conduct: initiates or receives telephone calls to 

from a customer or (1) Before a customer consents to or donor. 

pay 659 for goods or services offered, (dd) Telemarketing means a plan, program, or campaign which is conducted 

to induce the purchase of goods or serv­ •s• When a seller or telemarket er uses, or 

ices or a charitable contribution, by directs a customer to use, a courier to trans­ port payment, the seller or telemarketer use of one or more telephones and must make the disclosures required by which involves more than one inter­ § 310.3(a )(l) before sending a courier to pick 

state telephone call. The term does not up pa yment or authorization for payment, or 

include the solicitation of sales directing a customer to have a courier pick 

through the mailing of a catalog up payment or a uthorization for payment. In 

382 

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Federal Trade Commission §310.3 

failing to disclose truthfully, in a clear (vii) If the offer includes a negative 

and conspicuous manner, the following option feature, all material terms and 

material information: conditions of the negative option fea­

(i) The total costs to purchase, re­ ture, including, but not limited to, the 

ceive, or use, and the quantity of, any fact that the customer's account will 

goods or services that are the subject · be charged unless the customer takes 

of the sales offer; 660 an affirmative action to avoid the 

(ii) All material restrictions, limita­ charge(s), the date(s) the charge(s) will 

tions, or conditions to purchase, re­ be submitted for payment, and the speceive, or use the goods or services that cific steps the customer must take to are the subject of the sales offer; avoid t he charge(s); and 

(iii) If the seller has a policy of not (viii) In the sale of any debt relief 

making refunds, cancellations, ex­ service: 

changes, or repurchases, a statement (A) the amount of time necessary to 

informing the custom er that this is the achieve the represented results, and to 

seller's policy; or, if the seller or tele­ the extent that the service may include 

marketer makes a representation a settlement offer to any of the cus­ about a refund, cancellation, exchange, tomer's creditors or debt collectors, or repurchase policy, a statement of all the time by which the debt relief serv­ material terms and conditions of such ice provider will make a bona fide setpolicy; tlement offer to each of them; (iv) In any prize promotion, the odds (B) to the extent ·that the service of being able to receive the prize, and, may include a settlement offer to any if the odds are not calculable in ad­ of the customer's creditors or debt colvance, the factors used in calculating lectors, t he amount of money or the the odds; that no purchase or payment percentage of each outstanding debt is required to win a prize or to partici­ that the customer must accumulate bepat e in a prize promotion and that any fore the debt relief service provider purchase or payment will not increase will make a bona fide settlement offer the person's chances of winning; and to each of them; the no-purchase/no-payment method of (C) to the extent that any aspect of participating in the prize promotion the debt relief service relies upon or re­ with either instructions on how to par­ sults in the customer's failure to make ticipate or an address or local or toll­ timely payments to creditors or debt free telephone number to which cus­ collectors, that the use of the debt r e­ tomers may write or call for informa­ lief service will likely adversely affect tion on how to participate; the customer's creditworthiness, may (v) All material costs or conditions result in the customer being subject to to receive or redeem a prize that is the collections or sued by creditors or debt subject of the prize promotion; collectors, and may increase the (vi) In the sale of any goods or serv­ amount of money the customer owes ices represented to protect, insure, or due to the accrual of fees and interest; otherwise limit a customer's liability and in the event of unauthorized use of the 

customer's credit card, the limits on a (D) to the extent that the debt relief 

cardholder's liability for unauthorized service requests or requires the cususe of a credit card pursuant to 15 tomer to place funds in an account at 

U.S.C. 1643; an insured financial institution, that 

the customer owns the funds held in 

the case of debt relief services, the seller or the account, the customer may witht elemarketer must make the disclosures re­ draw from the debt relief service at any 

quired by §310.3(a)(l ) before the consumer en­ time without penalty, and, if the cusrolls in an offered program. tomer withdraws, the customer must 660 For offers of consumer credit products receive all funds in the account, other 

subject to the Truth in Lending Act, 15 than funds earned by the debt relief 

U.S.C. 1601 et seq., and Regulation Z, 12 CFR service in compliance with 226, compliance with the disclosure require­ § 310.4(a)(5)(i)(A) through (C). m ents under the Truth in Lending Act and 

Regulation Z shall constitute compliance (2) Misrepresenting, directly or by 

with §310.3(a)(l )(i) of this Rule . implication, in the sale of goods or 

383 

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§310.3 16 CFR Ch. I (1-1-14 Edition) 

services any of the following material creditors or debt collectors or make a 

information: bona fide offer to negotiate, settle, or 

(i) The total costs to purchase, re­ modify the terms of the customer's 

ceive, or use, and the quantity of, any debt; the effect of the service on a cusgoods or services that are the subject tomer's creditworthiness; the effect of 

of a sales offer; the service on collection efforts of the 

(ii) Any material restriction, limita­ customer's creditors or debt collectors; 

tion, or condition to purchase, receive, the percentage or number of customers 

or use goods or services that are the who attain the represented results; and 

subject of a sales offer; whether a debt relief service is offered 

(iii) Any material aspect of the per­ or provided by a non-profit entity. 

formance , efficacy, nature, or central (3) Causing billing information to be 

characteristics of goods or services submitted for payment, or collecting or that are the subject of a sales offer; attempting to collect payment for 

(iv) Any material aspect of the na­ goods or services or a charitable con­ ture or terms of the seller's refund, tribution, directly or indirectly, with­ cancellation, exchange, or repurchase out the customer's or donor's express 

policies; verifiable authorization, except when (v) Any material aspect of a prize the method of payment used is a credit 

promotion including, but not limited card subject to protections of t he 

to, the odds of being able to receive a Truth in Lending Act and Regulation 

prize, t he nature or value of a prize, or Z , 661 or a debit card subject to the pro­ that a purchase or payment is required tections of the Electronic Fund Trans­ to win a prize or to participate in a fer Act and Regulation E. 2 66 Such au­ prize promotion; thorization shall be deemed verifiable (vi) Any material aspect of an invest­ if any of the following means is em­ ment opportunity including, but not ployed: limited to, risk, liquidity, earnings po­ (i) Express written authorization by tential, or profitability; the customer or donor, which includes (vii) A seller's or telemarketer's af­ t he customer's or donor's signatur e;

663 filiation with, or endorsement or spon­ (ii) Express oral authorization which sorship by, any person or government is audio-recorded and made available entity; upon request to the customer or donor, (viii) That any customer needs of­ and the customer's or donor's bank or fered goods or services to provide pro­ other billing entity, and which evi­ tections a customer already has pursu­ dences clearly both the customer's or ant to 15 U.S.C. 1643; donor's authorization of payment for (ix) Any material aspect of a nega­ the goods or services or charitable con­ t ive option feature including, but not tribution t hat are the su):>ject of t he limited to, the fact that the customer's telemarketing transaction and the cus­ account will be charged unless the cus­ tomer's or donor's receipt of all of the tomer takes an affirmative action to following information: avoid t he charge(s), the date(s) t he (A) The number of debits, charges, or charge(s) will be submitted for pay­ payments (if more than one); ment, and the specific steps the cus­ (B) The date(s) t he debit(s), tomer must t ake to avoid the charge(s), or payment(s) will be sub­ charge(s); or mitted for payment; (x) Any material aspect of a ny debt 

relief service, including, but not limited to, the amount of money or the 661 Truth in Lending Act, 15 U.S .C. 1601 et 

percentage of the debt amount that a seq., a nd Regulation Z, 12 CFR part 226. 

customer may save by using such serv­ 662 Electronic Fund Transfer Act, 15 U.S.C. 

ice; the amount of time necessary to 1693 et seq. , and Regulation E, 12 CFR part 

205. achieve the represented results; the 

amount of money or the percentage of 663 For purposes of this Rule, the term 

"signature" shall include an electronic or each outstanding debt t hat t he cus­ digital form of signature, to the extent that 

tomer must accumulate before the pro­ such form of signature is recognized as a 

vider of the debt relief service will ini­ valid signature under a pplicable federal law 

tiate attempts with the customer's or state contract law. 

384 

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Federal Trade Commission §310.3 

(C) The amount(s) of the debit(s), to or deposit into, the credit card syscharge(s), or payment(s); tem for payment, a credit card sales 

(D) The customer's or donor's name; draft generated by a t elemarketing 

(E) The customer's or donor's billing transaction that is not the result of a information, identified with sufficient t elemarketing credit card transaction 

specificity such that the customer or between the cardholder a nd the mer­ donor understands what account will chant; be used to collect payment for the (2) Any person to employ, solicit, or goods or services or charitable con­ otherwise cause a merchant, or an em­ tribution that are the subject of the ployee, representative, or agent of the telemarketing transaction; merchant, to presen t to or deposit int o (F) A telephone number for customer the credit card system for payment, a or donor inquiry that is answered dur­ credit card sales draft generated by a ing normal business hours; and 

telemarketing transaction that is not (G) The date of the customer's or do­ the result of a telemarketing credit nor's oral authorization; or 

(iii) Written confirmation of the card transaction between the cardtransaction, identified in a clear and holder and the merchant; or 

conspicuous manner as such on the (3) Any person to obtain access to t he 

outside of the envelope, sent to the credit card system t hrough the use of a 

customer or donor via first class mail business relationship or an affiliation 

prior to the. submission for payment of with a merchant, when such access is 

the customer's or donor's billing infor­ not authorized by the merchant agree­ mation, and that includes all of the in­ ment or the applicable credit card sys­ formation contained in tem. 

§§310.3(a)(3)(ii)(A)-(G) and a clear and (d) Prohibited deceptive acts or prac­ conspicuous statement of the proce­ tices in the solicitation of charitable con­ dures by which the customer or donor tributions. It is a fraudulent charitable can obtain a refund from the seller or solicitation, a deceptive telemarketing telemarketer or charitable organiza­ act or practice, and a violation of this tion in the event the confirmation is Rule for any telemarketer soliciting inaccurate; provided, however, that charitable contributions to misrepre­ this means of authorization shall not sen t, directly or by implication, any of be deemed verifiable in instances in the following material information: which goods or services are offered in a (1) The nature, purpose, or mission of transaction involving a free-to-pay 

any entity on behalf of which a chari­ conversion and preacqui-red account information. table contribution is being r equested; 

(4) Making a false or misleading (2) That any charitable contribution 

statement to induce any person to pay is tax deductible in whole or in part; 

for goods or services or to- induce a (3) The purpose for which any charicharitable contribution. t able contribution will be used; 

(b) Assisting and facilitating. It is a de­ (4) The percentage or amount of any ceptive telemarketing act or practice charitable contribution that will go to 

and a violation of t his Rule for a per­ a charitable organization or to any son to provide substantial assistance or particular charitable program; support to any seller or telemarketer (5) Any material aspect of a prize when that person knows or consciously promotion including, but not limited avoids knowing that the seller or tele­ to: the odds of being able to receive a marketer is engaged in any act or prac­ prize; the nature or value of a prize; or tice that violates §§310.3(a), (c) or (d), that a charitable contribution is re­ or § 310.4 of this Rule. quired to win a prize or to participate (c) Credit card laundering. Except as in a prize pr omotion; or expressly permitted by the applicable (6) A charitable organization's or credit card system, it is a deceptive 

telemarketing act or practice and a telemarketer's affiliation with, or enviolation of t his Rule for: dorsement or sponsorship by, a ny per­

(1) A mercha nt to present to or de­ son or government entity. 

posit into, or cause another to present 

385 

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§310.4 16 CFR Ch. I (1-1-14 Edition) 

§ 310.4 Abusive telemarketing acts or debt pursuant to a settlement agreepractices. ment, debt management plan, or other 

such valid contractual agreement exe­ (a) Abusive conduct generally. It is an cuted by the customer; abusive telemarketing act or practice (B) The customer has made at least and a violation of this Rule for any one payment pursuant to that settle­ seller or telemarketer to engage in the 

ment agreement, debt management following conduct: plan, or other valid contractual agree­ (1) Threats, intimidation, or the use ment between the customer and the of profane or obscene language; 

(2) Requesting or receiving payment creditor or debt collector; and 

(C) To the extent that debts enrolled of any fee or consideration for goods or in a service are renegotiated, settled, services represented to remove derogatory information from, or improve, a reduced, or otherwise altered individperson's credit history, credit record, ually, the fee or consideration either: 

(1) Bears the same proportional rela­ or credit rating until: 

(i) The time frame in which the seller tionship to the total fee for renegotihas represented all of the goods or ating, settling, reducing, or altering 

services will be provided to that person the terms of the entire debt balance as 

has expired; and the individual debt amount bears to 

(ii) The seller has provided the person the entire debt amount. The individual 

with documentation in the form of a debt amount and the entire debt 

consumer report from a consumer re­ amount are those owed at the time the 

porting agency demonstrating that the debt was enrolled in the service; or 

promised results have been achieved, (2) Is a percentage of the amount 

such report having been issued more saved as a result of the renegotiation, 

than six months after the results were settlement, reduction, or alteration. 

achieved. Nothing in this Rule should The percentage charged cannot change 

be construed to affect the requirement from one individual debt to another. 

in the Fair Credit Reporting Act, 15 The amount saved is the difference beU.S.C. 1681, that a consumer report tween the amount owed at the time the 

may only be obtained for a specified debt was enrolled in the service and the 

permissible purpose; amoμnt actually paid to satisfy the 

(3) Requesting or receiving payment debt. 

of any fee or consideration from a per­ (ii) Nothing in §310.4(a)(5)(i) prohibits 

son for goods or services represented to requesting or requiring the customer 

recover or otherwise assist in the re­ to place funds in an account to be used 

turn of money or any other item of for the debt relief provider's fees and 

value paid for by, or promised to, that for payments to creditors or debt colperson in a previous telemarketing lectors in connection with the renegotransaction, until seven (7) business tiation, settlement, reduction, or other 

days after such money or other item is a lteration of the terms of payment or 

delivered to that person. This provision other terms of a debt, provided that: 

shall not apply to goods or services (A) The funds are held in an account 

provided to a person by a licensed at­ at an insured financial institution; 

torney; (B) The customer owns the funds held 

(4) Requesting or receiving payment in the account and is paid accrued inof any fee or consideration in advance terest on the account, if any; 

of obtaining a loan or other extension (C) The entity administering the acof credit when the seller or tele­ count is not owned or controlled by, or 

marketer has guaranteed or rep­ in any way affiliated wit h, the debt reresented a high likelihood of success in lief service; 

obtaining or arranging a loan or other (D) The entity administering the acextension of credit for a person; count does not give or accept any 

(5)(i) Requesting or receiving pay­ money or other compensation in exment of any fee or consideration for change for referrals of business involvany debt relief service until and unless: ing the debt relief service; and 

(A) The seller or telemarketer has re­ (E) The customer may withdraw from 

negotiated, settled, reduced, or other­ the debt relief service at any time 

wise altered the terms of at least one without penalty, and must receive all 

386 

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Federal Trade Commission §310.4 

funds in the account, other than funds be charged for the goods or services 

earned by the debt relief service in and to be charged using the account 

compliance with §310.4(a)(5)(i)(A) number identified pursuant to para­ through (C), within seven (7) business graph (a)(7)(ii)(A) of this section; or 

days of the customer's request. (8) Failing to transmit or cause to be 

(6) Disclosing or receiving, for con­ transmitted the telephone number, 

sideration, unencrypted consumer ac­ and, when made available by the telecount numbers for use in tele­ marketer's carrier, the name of the 

marketing; provided, however, that telemarketer, to any caller identificathis paragraph shall not apply to the tion service in use by a recipient of a 

disclosure or receipt of a customer's or telemarketing call; provided that it 

donor's billing information to process a shall not be a violation to substitute 

payment for goods or services or a (for the name and phone n umber used 

charitable contribution pursuant to a in, or billed for, making the call) the 

transaction; name of the seller or charitable organi­

(7) Causing billing information to be zation on behalf of which a telesubmitted for payment, directly or in­ marketing call is placed, and the selldirectly, without the express informed er's or charitable organization's cusconsent of the customer or donor. In tomer or donor service telephone numany telemarketing transaction, the ber, which is answered during regular 

seller or telemarketer must obtain the business hours. 

express informed consent of the cus­ (b) Pattern of calls. (1) It is an abusive 

tomer or donor to be charged for the telemarketing act or practice and a 

goods or services or charitable con­ violation of this Rule for a teletribution and to be charged using the marketer to engage in, or for a seller 

identified account. In any tele­ to cause a telemarketer to engage in, 

marketing transacti on involving the following conduct: 

preacquired account information, the (i) Causing any telephone to ring, or 

requirements in paragraphs (a)(7)(i) engaging any person in telephone conthrough (ii) of this section must be met versation, repeatedly or continuously 

to evidence express informed consent. with intent to annoy, abuse, or harass 

(i) In any telemarketing transaction any person at the called number; 

involving preacquired account informa­ (ii) Denying or interfering in any 

tion and a free-to-pay conversion fea­ way, directly or indirectly, with a perture, the seller or telemarketer must: son's right to be placed on any registry 

(A) Obtain from the customer, at a of names and/or telephone numbers of 

minimum, the last four (4) digits of the persons who do not wish to receive outaccount number to be charged; bound telephone calls established to 

(B) Obtain from the customer his or comply with §310.4(b)(l)(iii); 

her express agreement to be charged (iii) · Initiating any outbound telefor the goods or services and to be phone call to a person when: 

charged using the account number pur­ (A) That person previously has stated 

suant to paragraph (a)(7)(i)(A) of this that he or she does not wish to receive 

section; and, an outbound telephone call made by or (C) Make and maintain an audio re­ on behalf of the seller whose goods or cording of the entire telemarketing services are being offered or made on 

transaction. behalf of the charitable organization 

(ii) In any other telemarketing trans­ for which a charitable contribution is 

action involving preacquired account being solicited; or 

information not described in paragraph (B) That person's telephone number 

(a)(7)(i) of this section, the seller or is on the "do-not-call" registry, maintelemarketer must: tained by the Commission, of persons (A) At a minimum, identify the ac­ who do not wish to receive outbound 

count to be charged with sufficient telephone calls to induce the purchase 

specificity for the customer or donor to of goods or services unless the seller: 

understand what account will be (i) Has obtained the express agreecharged; and ment, in writing, of such person to 

(B) Obtain from the customer or place calls to that person. Such written 

donor his or her express agreement to agreement shall clearly evidence such 

387 

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§310.4 16 CFR Ch. I (1- 1- 14 Edition) 

person's authorization that calls made induce a charitable contribution from a 

by or on behalf of a specific party may member of, or previous donor to, a nonbe placed to that person, and shall in­ profit charitable organization on whose clude the telephone number to which behalf the call is made, the seller or the calls may be placed and t he signa­ telemarketer: 

ture664 of that person ; or (i) Allows the telephone to ring for at 

(ii) Has an established business rela­ least fifteen (15) seconds or four (4) tionship with such person, and that rings before disconnecting an unan­ person has not stated that he or she swered call; and does not wish to receive outbound tele­ (ii) Within two (2) seconds after the phone calls under paragraph completed greeting of the person (b)(l)(iii)(A) of this section; or called, plays a prerecorded message (iv) Abandoning any outbound tele­ that promptly provides the disclosures phone call. An outbound telephone call required by § 310.4(d) or (e), followed is "abandoned" under this section if a immediately by a disclosure of one or person answers it and the telemarketer 

does not connect the call to a sales rep­ both of the following: 

resentative within two (2) seconds of (A) In the case of a call t hat could be 

t he person's completed greeting. answered in person by a consumer, that 

(v) Initiating any outbound telephone the person called can use an automated 

call that delivers a prerecorded mes­ interactive voice and/or keypress-actisage, other than a prerecorded message vated opt-out mechanism to assert a 

permitted for compliance with the call Do Not Call request pursuant to 

abandonment safe harbor in § 310.4(b)(l)(iii)(A) at any time during 

§ 310. 4(b )( 4)(iii), unless: the message. The mechanism must: (A) In any such call to induce t he (1) Automatically add the number 

purchase of any good or service, t he called to the seller's entity-specific Do 

seller has obtained from the recipient Not Call list; of the call an express agreement, in (2) Once invoked, immediately dis­ writing, that: connect the call; and (i) The seller obtained only after a (3) Be available for use at any time clear and conspicuous disclosure that during the message; and the purpose of the agreement is to au­ (B) In the case of a call t hat could be thorize the seller to place prerecorded answered by an answering machine or calls to such person; 

(ii) The seller obtained without re­ voicemail service, that the person 

quiring, directly or indirectly, t hat the called can use a toll-free telephone 

agreement be executed as a condition number to assert a Do Not Call request 

of purchasing any good or service; pursuant to § 310.4(b)(l )(iii)(A). The 

(iii) Evidences t he willingness of the number provided must connect directly 

recipient of the call t o receive calls to an automated interactive voice or 

that deliver prer ecorded messages by keypress-activated opt-out mechanism 

or on behalf of a specific seller; and that: (iv) Includes such person's telephone (1) Automatically adds the number 

number and signature;665 and called to the seller's entity-specific Do 

(B) In any such call to induce the Not Call list; purchase of any good or service, or to (2) Immediately thereafter disconnects the call; and 664 For purposes of this Rule, the term (3) Is accessible at any time through­ "signature" shall include an electronic or out t he duration of the telemarketing digital form of signature, to the extent that campaign; and such form of signature is recognized as a 

valid signature under applicable federal law (iii) Complies with all other requireor state contract law. ments of this part and other applicable ••s For purposes of this Rule, the term federal and state laws. "signature" shall include an electronic or (C) Any call that complies with all di gita l form of signature, to the extent that applicable requirements of- this para­ such form of signature is recognized as a valid signature under applicable federal law· graph (v) shall not be deemed to violate 

or stat e contract law. §310.4(b)(l )(iv) of this part. 

388 

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Federal Trade Commission §310.4 

(D) This paragraph (v) shall not apply (i) The seller or telemarketer emto any outbound telephone call t hat de­ ploys technology that ensures abanlivers a prerecorded healthcare mes­ donment of no more t han three (3) persage made by, or on behalf of, a covered cent of all calls answered by a person, 

entity or its business associate, as measured over the duration of a single 

those terms are defined in t he HIP AA calling campaign, if less than 30 days, 

Privacy Rule, 45 CFR 160.103. or separately over each successive 30-

(2) It is an abusive telemarketing act day period or portion thereof that the 

campaign continues. or practice and a violation of this Rule 

(ii) The seller or telemarketer, for for any person to sell, rent, lease, pur­ each telemarketing call placed, allows chase, or use any list established to the telephone to ring for at least fif­ comply with § 310.4(b)(l)(iii)(A), or 

maintained t een (15) seconds or four (4) rings before by the Commission pursu­ disconnecting an unanswered call; ant to §310.4(b)(l)(iii)(B), for any pur­ (iii) Whenever a sales representative pose except compliance with the provi­ is not available to speak with the per­ sions of this Rule or otherwise to pre­ son answering the call within two (2) vent telephone calls to telephone num­ seconds after the person's completed bers on such lists. greeting, the seller or telemarketer (3) A seller or telemarketer will not promptly plays a recorded message be liable for violating § 310.4(b)(l)(ii) that states the name and telephone and (iii) if it can demonstrate that, as number of the seller on whose behalf 

part of the seller's or telemarketer's the call was placed666; and 

routine business practice: (iv) The seller or telemarketer, in ac­ (i) It has established and imple­ cordance with § 310.5(b)-(d), retains . mented written procedures to comply records establishing compliance with 

with § 310.4(b)(l)(ii) and (iii); § 310.4(b )( 4)(i)-(iii). 

(ii) It has trained its personnel, and (c) Calling time restrictions. Without 

any entity assisting in its compliance, the prior consent of a person, it is.an in the procedures established pursuant abusive telemarketing act or practice 

to §310.4(b)(3)(i); and a violation of this Rule for a tele­

(iii) The seller, or a telemarketer or marketer to engage in outbound teleanother person acting on behalf of the phone calls to a person's residence at 

seller or charitable organization, has any time other than between 8:00 a.m. 

maintained and recorded a list of tele­ and 9:00 p.m. local time at the called 

phone numbers the seller or charitable person's location. 

organization may not contact, in com­ (d) Required oral disclosures in the sale 

pliance with § 310.4(b)(l)(iii)(A); of goods or services. It is an abusive tele­

(iv) The seller or a telemarketer uses market ing act or practice and a violaa process to prevent telemarketing to tion of this Rule for a telemarketer in 

any telephone number on any list es­ "an outbound telephone call or internal or external upsell to induce the pur­ tablished pursuant to § 310.4(b)(3)(iii) or 

310.4(b)(l)(iii)(B), employing a version chase of goods or services to fail to disclose truthfully, promptly, and in a of the " do-not-call" registry obtained clear and conspicuous manner to the from the Commission no more than 

person receiving the call, the following t hirty-one (31) days prior to t he date 

information: any call is made, and maintains (1) The identity of the seller; records documenting this process; (2) That the purpose of the call is to (v) The seller or a telemarketer or sell goods or services; another person acting on behalf of the (3) The nature of the goods or serv­ seller or charitable organization, mon­ ices; and itors and enforces compliance with the (4) That no purchase or payment is procedures established pursuant to necessary to be able to win a prize or §310.4(b)(3)(i); and 

(vi) Any subsequent call otherwise 

violating § 310.4(b)(l)(ii) or (iii) is the 666 This provision does not affect any sell­ er's or telemarketer's obligation to comply result of error. with relevant state and federal laws, includ­

(4) A seller or telemarketer will not ing but not limited to the TCPA, 47 U.S.C. 

·be liable for violating § 310,4(b)(l)(iv) if: 227, a nd 47 CFR part 64.1200. 

389 

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§310.5 16 CFR Ch. I (1-1-14 Edition) 

participate in a prize promotion if a (4) The name, any -fictitious name prize promotion is offered and that any used, the last known home address and 

purchase or payment will not increase t elephone number, and the job title(s) the person's chances of winning. This for all current and former employees disclosure must be made before or in directly involved in telephone sales or conjunction with the description of the solicitations; provided, however, that if prize to the person called. If requested the seller or telemarketer permits fic­ by that person, the telemarketer must titious names to be used by employees, disclose the no-purchase/no-payment each fict itious name must be traceable en try method for the prize promotion; to only one specific employee; and provided, however, t hat, in any inter­ (5) All verifiable authorizations or nal upsell for the sale of goods or serv­ records of express informed consent or ices, the seller or telemarketer must 

express agreement required to be pro­ provide the disclosures listed in this 

section only to , the extent that the in­ vided or received under this Rule. 

formation in the upsell differs from the (b) A seJJer or telemarketer may 

disclosures provided in the initial tele­ keep the records required by §310.5(a) 

marketing transaction. in any form, and in the same manner, 

(e) Required oral disclosures in chari­ format, or place as they keep such 

table solicitations. It is an abusive tele­ records in the ordinary course of busi­ marketing act or practice and a viola­ ness. Failure to keep all records re­ tion of this Rule for a telemarketer, in quired by §310.5(a) shall be a violation an outbound telephone call to induce a of this Rule. 

charitable contribution, to fail to dis­ (c) The seJJer and the telemarketer close truthfully, promptly, and in a calling on behalf of the seller may, by clear and conspicuous manner to the written agreement, allocate responsi­ person receiving the call, the following bility between themselves for the rec­ information: ordkeeping required by this Section. (1) The identi ty of the charitable or­ When a seller and telemarketer have ganization on behalf of which the re­ entered into such an agreement, the quest is being made; and 

terms of that agreement ·shall govern, (2) That the purpose of the call is to 

solicit a charitable contribution. and the seller or telemarketer, as the 

case may be, need not keep records 

(75 FR 48516, Aug. 10, 2010, as amended at 76 that duplicate those of the other. If the FR 58716, Sept. 22, 2011) agreement is unclear as to who must 

§ 310.5 Recordkeeping requirements. maintain any required record(s), or if 

no such agreement exists, the seller (a) Any seller or telemarketer shall shall be responsible for complying with keep, for a period of 24 months from §§ 310.5(a)(l)-(3) and (5); the tele­ the date t he record is produced, the fol­ marketer shall be responsible for com­ lowing records relating to its tele­ plying with §310.5(a)(4). marketing activities: 

(1) All substantially different adver- (d) In the event of any dissolution or 

tising, brochures, telemarketing termination of the seller's or t elescripts, and promotional materials; marketer's business, the principal of 

(2) The name and last known address that seller or telemarketer shall mainof each prize recipient and the prize tain all r ecords as required under this 

awarded for prizes that are rep­ section. In the event of any sale, asresented, directly or by implication, to signment, or ot her change in ownership 

have a value of $25.00 or more; of t he seller's or telemarketer's busi­

(3) The name and last known address ness, the successor business shall main­ of each customer, the g oods or services tain all records required under this sec­ purchased, the date such goods or serv­ tion. 

ices were shipped or provided, and the 

amount paid by the customer for the U.S.C. 1601 et seq., and Regula tion Z, 12 CFR goods or services;667 226, compliance with the recordkeeping requirements under the Truth in Lending Act, 667 For offers of consumer credit products and Regulation Z, sh all constitute complisubject to the Truth in Lending Act, 15 ance with §310.5(a)(3) of this Rule. 

390 

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Federal Trade Commission §310.7 

§ 310.6 Exemptions. Rule or Business Opportunity Rule, or 

advertisements involving goods or (a) Solicitations to induce charitable services described in §§ 310.3(a)(l)(vi) or contributions via outbound telephone 310.4(a)(2)-(4); or to any instances of calls are not covered by upselling included in such telephone § 310.4(b)(l)(iii)(B) of this Rule. calls; (b) The following acts or practices (6) Telephone calls initiated by a cus­ are exempt from this Rule: 

(1) The tomer or donor in response sale of pay-per-call services to a direct 

subject to the Commission's Rule enti­ mail solicitation, including solicitatled "Trade Regulation Rule Pursuant tions via the U.S. Postal Service, facto the Telephone Disclosure and Dis­ simile transmission, electronic mail, 

pute Resolution Act of 1992," 16 CFR and other similar methods of delivery 

part 308, provided, however, that this in which a solicitation is directed to 

exemption does not apply to the re­ specific address(es) or person(s), that 

quirements of §§310.4(a)(l), (a)(7), (b), clearly, conspicuously, and truthfully 

and (c); discloses all material information list­

(2) The sale of franchises subject to ed in §310.3(a)(l) of this Rule, for any 

the Commission's Rule entitled '-'Dis­ goods or services offered in the direct 

closure Requirements and Prohibitions mail solicitation, and that contains no 

Concerning Franchising," ("Franchise material misrepresentation regarding 

Rule") 16 CFR part 436, and the sale of any item contained in §310.3(d) of this 

business opportunities subject to the Rule for any requested charitable conCommission's Rule entitled '·'Disclo­ tribution; provided, however, that this 

sure Requirements and Prohibitions exemption does not apply to calls initiConcerning Business Opportunities,'' ated by a customer in response to a di­

("Business Opportunity Rule") 16 CFR rect mail solicitation relating to prize 

part 437, provided, however, that this promotions, investment opportunities, 

exemption does not apply to the re­ debt relief services, business opportuniquirements of §§310.4(a)(l), (a)(7), (b), ties other than business arrangements 

and (c); covered by the Franchise Rule or Busi­

(3) Telephone calls in which the sale ness Opportunity Rule, or goods or 

of goods or services or charitable solic­ services described in §§310.3(a)(l)(vi) or 

itation is not completed, and payment 310.4(a)(2)-(4); or to any instances of or authorization of payment is not re­ upselling included in such telephone 

quired, until after a face-to-face sales calls; and 

or donation presentation by the seller (7) Telephone calls between a teleor charitable organization, provided, marketer and any business, except 

however, that this exemption does not calls to induce the retail sale of nonapply to the requirements of durable office or cleaning supplies; prb­

§§ 310.4(a)(l), (a)(7), (b), and (c); vided, however, that § 310.4(b)(l )(iii)(B) 

(4) Telephone calls initiated by a cus­ and § 310.5 of this Rule shall not apply 

tomer or donor that are not t he result to sellers or telem arketers of nonof any solicitation by a seller, chari­ durable office or cleaning supplies. 

table organization, or telemarketer, 

provided, however, that this exemption § 310.7 Actions by states and private 

does not apply to any instances of persons. 

upselling included in such telephone (a) Any a ttorney general or other of­ calls; ficer of a stat e authorized by the state 

(5) Telephone calls initiated by a cus­ to bring an action under the Teletomer or donor in response to an adver­ marketing and Consumer Fraud and 

tisement through any medium, other Abuse Prevention Act, and any private 

than direct mail solicitation, provided, person who brings an action under that 

however, that this exemption does not Act, shall serve written notice of its 

apply to calls initiated by a customer action on the· Commission, if feasible, 

or donor in response to an advertise­ prior to its initiating an action under m ent relating to investment opportuni­ this Rule. The notice shall be sent to 

ties, debt relief services, business op­ the Office of the Director, Burea u of 

portunities other than business ar­ Consumer Protection, Federal Trade 

rangements covered by t he Franchise Commission, Washington, DC 20580, and 

391 

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§310.8 16 CFR Ch. I (1-1-14 Edition) 

shall include a copy of the state's or access to t he National Do Not Call 

private person's complaint and any Registry, is $59 for each area code of 

other pleadings to be filed with the data accessed, up to a m aximum of 

court. If prior notice is not feasible, $16,228; provided, however, that there 

the state or private person shall serve shall be no charge to any person for acthe Commission with the required no­ cessing the first five area codes of data, 

tice immediately upon instituting its and p rovided further, that there shall be 

action . no charge to any person engaging in or 

(b) Nothing contained in this Section causing others to engage in outbound 

shall prohibit any attorney general or telephone calls to consumers and who 

other authorized state official from is accessing area codes of data in the 

proceeding in state court on the basis National Do Not Call Registry if the 

of an alleged violation of any civil or person is permitted to access, but is 

criminal statute of such state. not required to access, t he National Do 

Not Call Registry under t his Rule, 47 

§ 310.8 Fee for access to the National CFR 64.1200, or any other Federal regu­ Do Not Call Registry. lation or law. Any person accessing the 

(a) It is a violation of this Rule for National Do Not Call Registry may not 

any seller to initiate, or cause any participate in any arrangement to 

telemarketer to initiate, an outbound share the cost of accessing the regtelephone call to any person whose istry, including any arrangement wit h 

telephone number is within a given any telemarketer or service provider to 

area code unless such seller, either di­ divide the costs to access the registry 

rectly or through another person, first among various clients of that telehas paid the annual fee, required by marketer or service provider. 

§310.8(c), for access to telephone num­ (d) Each person who pays, either dibers within that area code that ar e in­ rectly or through another person, the 

cluded in the National Do Not Call annual fee set forth in § 310.8(c), each 

Registry maintained by the Commis­ person excepted under §310.8(c) from 

sion under § 310.4(b)(l)(iii)(B); provided, paying t he ann ual fee, and each person 

however, that such payment is not nec­ excepted from paying an annual fee 

essary if the seller initiates, or causes under § 310.4(b)(l )(iii)(B), will be proa telemarketer to initiate, calls solely vided a unique account number that 

to persons- pursuant to will allow that person to access the 

§§310.4(b)(l )(iii)(B)(i) or (ii), and the registry data for the selected area 

seller does not access the National Do codes at any time for the twelve month 

Not Call Registry for any other pur­ period beginning on the first day of the 

pose. month in which the person paid the fee 

(b) It is a violation of t his Rule for (" the annual period"). To obtain access 

an y telemarketer, on behalf of any sell­ to additional area codes of data during 

er, to initiate an outbound telephone the first six months of the annual pecall to any person whose telephone riod, each person r equired to pay the 

number is within a g iven area code un­ fee under §310.8(c) must first pay $59 

less that seller, either directly or for each additional area code of data 

through another person, first has paid not initially selected. To obtain access 

t he annual fee, required by § 310.8(c), to additional area codes of data du ring 

for access to the telephone numbers the second six months of the ann ual pewithin that area code that are included riod, each person required to pay the 

in the National Do Not Call Registry; fee under §310.8(c) must first pay $30 

provided, however, that such payment for each additional area code of data 

is not necessary if the seller initiates, not initially selected. The payment of 

or causes a telemarketer to initiate, the additional fee will permit the percalls solely to persons pursuant to son to access the additional area codes 

§§ 310.4(b)(l)(iii)(B)(i) or (ii), and the of data for the remainder of the annual 

seller does not access the National Do period. 

Not Call Registry for any other pur­ (e) Access to the National Do Not 

pose. Call Registry is limited to tele­

(c) The annual fee, which must be marketers, sellers, others engaged in or 

paid by any person prior to obtaining causing others to engage in telephone 

392 

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Case 6:20-cv-00052-RBD-GJK Document 3-2 Filed 01/10/20 Page 31 of 32 PageID 124 
Federal Trade Commission §31 1.4 

calls to consumers, service providers 

acting on behalf of such persons, and 

any government agency that has law 

enforcement authority. Prior to accessing the National Do Not Call Registry, a person must provide the identifying 

information required by the operator of 

the registry to collect the fee, and 

must certify, under penalty of law, 

that the person is accessing the registry solely to comply with the provisions of this Rule or to otherwise prevent telephone calls to telephone numbers on the registry. If the person is accessing the registry on behalf of sellers, t hat person also must identify 

each of the sellers on whose behalf it is 

accessing the registry, must provide 

each seller's unique account n umber 

for access to the national registry, and 

must certify, under penalty of law, 

that the sellers wi11 be using the infor­ mat ion gathered from the registry 

solely to comply with the provisions of 

this Rule or otherwise to prevent telephone calls to telephone numbers on 

the registry. 

[75 FR 48516, Aug. 10, 2010; 75 FR 51934, Aug. 

24, 2010, as amended at 77 FR 51697, Aug. 27, 

2012; 78 FR 53643, Aug. 30, 2013) 

§ 310.9 Se verability. 

The provisions of this Rule are separate and severable from one another. If 

any provision is stayed or determined 

to be invalid, it is the Commission's intention that the remaining provisions 

shall continue in effect. 

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