1 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

ALDEN F. ABBOTT 

General Counsel 

ELIZABETH NACH 

VA Bar No. 75235 

ANNETTE SOBERATS 

FL Bar No. 0093934 

Federal Trade Commission 

600 Pennsylvania Avenue, NW 

Mail Stop: CC-10528 

Washington, DC 20580 

Tel: (202) 326-2611, -2921 

Fax: (202) 326-3259 

enach@ftc.gov; asoberats@ftc.gov 

ATTORNEYS FOR FEDERAL TRADE COMMISSION 

UNITED STATES DISTRICT COURT 

DISTRICT OF NEVADA 

FEDERAL TRADE COMMISSION, 

 Plaintiff, 

 v. 

HEALTH CENTER, INC., a corporation, and 

PEGGY PEARCE, individually and as an owner 

and officer of HEALTH CENTER, INC., 

 Defendants. 

Case No. 2:20-cv-547

STIPULATED ORDER FOR

PERMANENT INJUNCTION AND 

MONETARY JUDGMENT

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

Permanent Injunction and Other Equitable Relief (“Complaint”), for a permanent injunction and 

other equitable relief in this matter, pursuant to Sections 13(b) and 19 of the Federal Trade 

Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b), 57b. The Commission and Defendants 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 1 of 34
2 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

stipulate to the entry of this Stipulated Order for Permanent Injunction and Monetary 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 Defendants participated in deceptive acts or practices in 

violation of Sections 5 and 12 of the FTC Act, 15 U.S.C. §§ 45, 52, in connection with the 

advertising, marketing, promotion, offering for sale, or sale of Rejuvi-Cell, Rejuvi-Sea, and 

Rejuvi-Stem. 

3. Defendants neither admit nor deny any of the allegations in the Complaint, except as 

specifically stated in this Order. Only for purposes of this action, Defendants admit the facts 

necessary to establish jurisdiction. 

4. Defendants waive any claim that they 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 

agree to bear their own costs and attorney fees. 

5. Defendants and the Commission waive 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. “Clear(ly) and conspicuous(ly)” means that a required disclosure is difficult to miss 

(i.e., easily noticeable) and easily understandable by ordinary consumers, including in all of the 

following ways: 

1. In any communication that is solely visual or solely audible, the disclosure must 

be made through the same means through which the communication is presented. In any 

communication made through both visual and audible means, such as a television advertisement, 

the disclosure must be presented simultaneously in both the visual and audible portions of the 

communication even if the representation requiring the disclosure is made in only one means. 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 2 of 34
3 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

2. A visual disclosure, by its size, contrast, location, the length of time it appears, 

and other characteristics, must stand out from any accompanying text or other visual elements so 

that it is easily noticed, read, and understood. 

3. An audible disclosure, including by telephone or streaming video, must be 

delivered in a volume, speed, and cadence sufficient for ordinary consumers to easily hear and 

understand it. 

4. In any communication using an interactive electronic medium, such as the 

Internet or software, the disclosure must be unavoidable. 

5. On a product label, the disclosure must be presented on the principal display 

panel. 

6. The disclosure must use diction and syntax understandable to ordinary consumers 

and must appear in each language in which the representation that requires the disclosure 

appears. 

7. The disclosure must comply with these requirements in each medium through 

which it is received, including all electronic devices and face-to-face communications. 

8. The disclosure must not be contradicted or mitigated by, or inconsistent with, 

anything else in the communication. 

9. When the representation or sales practice targets a specific audience, such as 

children, the elderly, or the terminally ill, “ordinary consumers” includes reasonable members of 

that group. 

B. “Covered Product” means any Dietary Supplement, Food, or Drug, including RejuviCell, Rejuvi-Sea, and Rejuvi-Stem. 

C. “Defendants” means the Individual Defendant and the Corporate Defendant, 

individually, collectively, or in any combination. 

1. “Corporate Defendant” means Health Center, Inc. and its successors and 

assigns. 

2. “Individual Defendant” means Peggy Pearce. 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 3 of 34
4 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

D. “Dietary Supplement” means (1) any product labeled as a dietary supplement or 

otherwise represented as a dietary supplement; or (2) any pill, tablet, capsule, powder, softgel, 

gelcap, liquid, or other similar form containing one or more ingredients that are a vitamin, 

mineral, herb or other botanical, amino acid, probiotic, or other dietary substance for use by 

humans to supplement the diet by increasing the total dietary intake, or a concentrate, metabolite, 

constituent, extract, or combination of any ingredient described above, that is intended to be 

ingested, and is not represented to be used as a conventional food or as a sole item of a meal or 

the diet. 

E. “Drug” means (1) articles recognized in the official United States Pharmacopoeia, 

official Homoeopathic Pharmacopoeia of the United States, or official National Formulary, or 

any supplement to any of them; (2) articles intended for use in the diagnosis, cure, mitigation, 

treatment, or prevention of disease in humans or other animals; (3) articles (other than food) 

intended to affect the structure or any function of the body of humans or other animals; and (4) 

articles intended for use as a component of any article specified in (1), (2), or (3); but does not 

include devices or their components, parts, or accessories. 

F. “Essentially Equivalent Product” means a product that contains the identical 

ingredients, except for inactive ingredients (e.g., binders, colors, fillers, excipients) in the same 

form and dosage, and with the same route of administration (e.g., orally, sublingually), as the 

Covered Product; provided that the Covered Product may contain additional ingredients if 

reliable scientific evidence generally accepted by experts in the field indicates that the amount 

and combination of additional ingredients is unlikely to impede or inhibit the effectiveness of the 

ingredients in the Essentially Equivalent Product. 

G. “Food” means (1) any article used for food or drink for humans or other animals; (2) 

chewing gum; and (3) any article used for components of any such article. 

H. “Telemarketing” means any 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 a telephone call, whether or not covered by the Telemarketing Sales Rule. 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 4 of 34
5 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

ORDER 

I. PROHIBITED REPRESENTATIONS: 

HEALTH-RELATED CLAIMS REQUIRING 

HUMAN CLINICAL TESTING FOR SUBSTANTIATION 

IT IS ORDERED that Defendants, Defendants’ officers, agents, 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 the manufacturing, labeling, 

advertising, promotion, offering for sale, sale, or distribution of any Covered Product, are 

permanently restrained and enjoined from making, or assisting others in making, expressly or by 

implication, including through the use of a product or service name, endorsement, depiction, or 

illustration, any representation that such product: 

A. improves memory; 

B. causes weight or fat loss, or causes wrinkles to disappear; or 

C. treats, mitigates, or cures any disease, 

unless the representation is non-misleading, and, at the time of making such representation, they 

possess and rely upon competent and reliable scientific evidence substantiating that the 

representation is true. For purposes of this Section, competent and reliable scientific evidence 

shall consist of human clinical testing of the Covered Product or of an Essentially Equivalent 

Product, that is sufficient in quality and quantity based on standards generally accepted by 

experts in the relevant disease, condition, or function to which the representation relates, when 

considered in light of the entire body of relevant and reliable scientific evidence, to substantiate 

that the representation is true. Such testing must be: (1) randomized, double-blind, and placebocontrolled; and (2) conducted by researchers qualified by training and experience to conduct 

such testing. In addition, all underlying or supporting data and documents generally accepted by 

experts in the field as relevant to an assessment of such testing as described in the Section 

entitled Preservation of Records Relating to Competent and Reliable Human Clinical Tests or 

Studies must be available for inspection and production to the Commission. Persons covered by 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 5 of 34
6 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

this Section have the burden of proving that a product satisfies the definition of Essentially 

Equivalent Product. 

II. PROHIBITED REPRESENTATIONS: 

OTHER HEALTH-RELATED CLAIMS 

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, 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 the manufacturing, 

labeling, advertising, promotion, offering for sale, sale, or distribution of any Covered Product, 

are permanently restrained and enjoined from making, or assisting others in making, expressly or 

by implication, including through the use of a product or service name, endorsement, depiction, 

or illustration, any representation, other than representations covered under the Section of this 

Order entitled Prohibited Representations: Health-Related Claims Requiring Human Clinical 

Testing for Substantiation, about the health benefits, performance, efficacy, safety, or side effects 

of any Covered Product, unless the representation is non-misleading, and, at the time of making 

such representation, they possess and rely upon competent and reliable scientific evidence that is 

sufficient in quality and quantity based on standards generally accepted by experts in the relevant 

disease, condition, or function to which the representation relates, when considered in light of the 

entire body of relevant and reliable scientific evidence, to substantiate that the representation is 

true. 

For purposes of this Section, competent and reliable scientific evidence means tests, 

analyses, research, or studies (1) that have been conducted and evaluated in an objective manner 

by experts in the relevant disease, condition, or function to which the representation relates; (2) 

that are generally accepted by such experts to yield accurate and reliable results; and (3) that are 

randomized, double-blind, and placebo-controlled human clinical testing of the Covered Product 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 6 of 34
7 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

or of an Essentially Equivalent Product, when such experts would generally require such human 

clinical testing to substantiate that the representation is true. In addition, when such tests or 

studies are human clinical tests or studies, all underlying or supporting data and documents 

generally accepted by experts in the field as relevant to an assessment of such testing as set forth 

in the Section entitled Preservation of Records Relating to Competent and Reliable Human 

Clinical Tests or Studies must be available for inspection and production to the Commission. 

Persons covered by this Section have the burden of proving that a product satisfies the definition 

of Essentially Equivalent Product. 

III. PROHIBITED MISREPRESENTATIONS REGARDING TESTS, STUDIES, 

OTHER RESEARCH, OR INGREDIENTS 

 IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, 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 the manufacturing, 

labeling, advertising, promotion, offering for sale, sale, or distribution of any product, are 

permanently restrained and enjoined from misrepresenting, in any manner, expressly or by 

implication, including through the use of any product name, endorsement, depiction, or 

illustration: 

A. That any Covered Product is clinically proven to treat, mitigate, or cure any 

disease or health condition; 

B. That the performance or benefits of any product are scientifically or clinically 

proven or otherwise established; 

C. The existence, contents, validity, results, conclusions, or interpretations of any 

test, study, or other research; or 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 7 of 34
8 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

D. The ingredients in the product, including the amount of any such ingredients. 

IV. FDA-APPROVED CLAIMS 

 IT IS FURTHER ORDERED that nothing in this Order prohibits Defendants, 

Defendants’ officers, agents, employees, or all other persons in active concert or participation 

with any of them from:

A. For any drug, making a representation that is approved in labeling for such drug 

under any tentative final or final monograph promulgated by the Food and Drug Administration, 

or under any new drug application approved by the Food and Drug Administration; and 

B. For any product, making a representation that is specifically authorized for use in 

labeling for such product by regulations promulgated by the Food and Drug Administration 

pursuant to the Nutrition Labeling and Education Act of 1990 or permitted under Sections 303-

304 of the Food and Drug Administration Modernization Act of 1997. 

V. PRESERVATION OF RECORDS RELATING TO COMPETENT AND 

RELIABLE HUMAN CLINICAL TESTS OR STUDIES 

IT IS FURTHER ORDERED that, with regard to any human clinical test or study 

(“test”) upon which Defendants rely to substantiate any claim covered by this Order, Defendants 

shall secure and preserve all underlying or supporting data and documents generally accepted by 

experts in the field as relevant to an assessment of the test, including: 

A. All protocols and protocol amendments, reports, articles, write-ups, or other 

accounts of the results of the test, and drafts of such documents reviewed by the test sponsor or 

any other person not employed by the research entity; 

B. All documents referring or relating to recruitment; randomization; instructions, 

including oral instructions, to participants; and participant compliance; 

C. Documents sufficient to identify all test participants, including any participants 

who did not complete the test, and all communications with any participants relating to the test; 

all raw data collected from participants enrolled in the test, including any participants who did 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 8 of 34
9 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

not complete the test; source documents for such data; any data dictionaries; and any case report 

forms; 

D. All documents referring or relating to any statistical analysis of any test data, 

including any pretest analysis, intent-to-treat analysis, or between-group analysis performed on 

any test data; and 

E. All documents referring or relating to the sponsorship of the test, including all 

communications and contracts between any sponsor and the test’s researchers. 

Provided, however, the preceding preservation requirement does not apply to a reliably 

reported test, unless the test was conducted, controlled, or sponsored, in whole or in part by: (1) 

any Defendant; (2) any Defendant’s officers, agents, representatives, or employees; (3) any other 

person or entity in active concert or participation with any Defendant; (4) any person or entity 

affiliated with or acting on behalf of any Defendant; (5) any supplier of any ingredient contained 

in the product at issue to any of the foregoing or to the product’s manufacturer; or (6) the 

supplier or manufacturer of such product. 

 For purposes of this Section, “reliably reported test” means a report of the test has been 

published in a peer-reviewed journal, and such published report provides sufficient information 

about the test for experts in the relevant field to assess the reliability of the results. 

For any test conducted, controlled, or sponsored, in whole or in part, by Defendants, 

Defendants must establish and maintain reasonable procedures to protect the confidentiality, 

security, and integrity of any personal information collected from or about participants. These 

procedures must be documented in writing and must contain administrative, technical, and 

physical safeguards appropriate to Defendants’ size and complexity, the nature and scope of 

Defendants’ activities, and the sensitivity of the personal information collected from or about the 

participants. 

VI. PROHIBITED MISREPRESENTATIONS: ENDORSEMENTS 

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, 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 the manufacturing, 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 9 of 34
10 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

labeling, advertising, promotion, offering for sale, sale, or distribution of any goods or services, 

are permanently restrained and enjoined from making, or assisting others in making, expressly or 

by implication, any misrepresentation about the status of any endorser or person providing a 

review of the good or service, including a misrepresentation that the endorser or reviewer is an 

independent user or ordinary consumer of the good or service. 

VII. DISCLOSURE OF MATERIAL CONNECTIONS

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, 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 the manufacturing, 

labeling, advertising, promotion, offering for sale, sale, or distribution of any goods or services, 

are permanently restrained and enjoined from making any representation, expressly or by 

implication, about any consumer or other endorser of such good or service without disclosing, 

Clearly and Conspicuously, and in Close Proximity to the representation, any unexpected 

material connection between such endorser and (1) any Defendant, or (2) any other individual or 

entity affiliated with the good or service. For the purposes of this provision, “unexpected 

material connection” means any relationship that might materially affect the weight or credibility 

of the testimonial or endorsement and that would not reasonably be expected by consumers.

VIII. PROHIBITION AGAINST VIOLATING

THE TELEMARKETING SALES RULE

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, 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 the Telemarketing 

of any good or service, are permanently restrained and enjoined from violating any provision of 

the Telemarketing Sales Rule, 16 C.F.R. Part 310, a copy of which is attached to this Order as 

Attachment A, including violating Section 310.3(a)(2)(iii) by misrepresenting, directly or by 

implication, any material aspect of the performance, efficacy, nature, or central characteristics of 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 10 of 34
11 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

the goods or services, or Section 310.3(a)(4) by making a false or misleading statement to induce 

any person to pay for goods or services or to induce a charitable contribution. 

IX. MONETARY JUDGMENT AND PARTIAL SUSPENSION 

IT IS FURTHER ORDERED that: 

A. Judgment in the amount of $8,619,994 is entered in favor of the Commission 

against Individual Defendant and Corporate Defendant, jointly and severally, as equitable 

monetary relief. 

B. Defendants are ordered to pay to the Commission $5,000, which, as Defendants 

stipulate, their undersigned counsel holds in escrow for no purpose other than payment to the 

Commission. 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 the 

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

Subsections below. 

C. The Commission’s agreement to the suspension of part of the judgment is 

expressly premised upon the truthfulness, accuracy, and completeness of Defendants’ sworn 

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

to the Commission, namely: 

 1. the Financial Statement of Individual Defendant Peggy Pearce signed on 

December 20, 2019, including the attachments; 

 2. the Financial Statement of Corporate Defendant Health Center, Inc. signed 

by Peggy Pearce, President, on August 7, 2019, including the attachments; and 

 3. the additional documentation and information submitted by Accellion 

secure file transfer from Defendants’ counsel Mary F. Chapman, Esq. to Commission counsel 

Elizabeth Nach on October 4, 2019, October 22, 2019, October 29, 2019, November 21, 2019, 

and January 8, 2020, including all attachments thereto. 

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

by the Commission, the Court finds that Defendant failed to disclose any material asset, 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 11 of 34
12 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

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

in the financial representations identified above. 

X. ADDITIONAL MONETARY PROVISIONS 

IT IS FURTHER ORDERED that: 

A. Defendants relinquish 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. 

B. 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, such as a 

nondischargeability complaint in any bankruptcy case. 

 C. The facts alleged in the Complaint establish all elements necessary to sustain an 

action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. 

§ 523(a)(2)(A), and this Order will have collateral estoppel effect for such purposes. 

D. Defendants acknowledge that their Taxpayer Identification Numbers (Social 

Security Numbers or Employer Identification Numbers), which Defendants previously 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. 

E. All money paid to the Commission pursuant to this Order may be deposited into a 

fund administered by the Commission or its designee to be used for equitable relief, including 

consumer redress and any attendant expenses for the administration of any redress fund. If a 

representative of the Commission decides that direct redress to consumers is wholly or partially 

impracticable or money remains after redress is completed, the Commission may apply any 

remaining money for such other equitable relief (including consumer information remedies) as it 

determines to be reasonably related to Defendants’ practices alleged in the Complaint. Any 

money not used for such equitable relief is to be deposited to the U.S. Treasury as disgorgement. 

Defendants have no right to challenge any actions the Commission or its representatives may 

take pursuant to this Subsection. 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 12 of 34
13 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

XI. CUSTOMER INFORMATION 

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, 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 the sale of any 

Covered Product are permanently restrained and enjoined from directly or indirectly: 

A. Failing to provide sufficient customer information to enable the Commission to 

efficiently administer consumer information remedies. Defendants represent that they have 

provided this customer information to the Commission. If a representative of the Commission 

requests in writing any information related to consumer information remedies, Defendants must 

provide it, in the form prescribed by the Commission, within 30 days. 

 B. 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; and 

C. Failing to destroy such customer information in all forms in their possession, 

custody, or control within 30 days after receipt of written direction to do so from a representative 

of the Commission. 

Provided, however, that customer information need not be disposed of, and may be 

disclosed, to the extent requested by a government agency or required by law, regulation, or 

court order. 

XII. ORDER ACKNOWLEDGMENTS

IT IS FURTHER ORDERED that Defendants obtain acknowledgments of receipt of 

this Order: 

A. Each 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, each Individual Defendant for any business 

that such Defendant, individually or collectively with any other Defendant, is the majority owner 

or controls directly or indirectly, and Corporate Defendant, must deliver a copy of this Order to: 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 13 of 34
14 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

(1) all principals, officers, directors, and LLC managers and members; (2) all employees having 

managerial responsibilities for conduct related 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 a Defendant delivered a copy of this 

Order, that Defendant must obtain, within 30 days, a signed and dated acknowledgment of 

receipt of this Order. 

XIII. COMPLIANCE REPORTING 

IT IS FURTHER ORDERED that Defendants make timely submissions to the 

Commission: 

A. Sixty days after entry of this Order, each Defendant must submit a compliance 

report, sworn under penalty of perjury: 

1. Each Defendant must: (a) identify the primary physical, postal, 

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

of the Commission 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 Individual Defendant must describe if they know or should know due to their 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. 

2. Additionally, each Individual 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 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 14 of 34
15 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

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 10 years after entry of this Order, each Defendant must submit a compliance 

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

1. Each Defendant must report any change in: (a) any designated point of 

contact; or (b) the structure of Corporate Defendant or any entity that 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, each Individual Defendant must report any change in: (a) 

name, including aliases or fictitious names, or residence address; or (b) title or role in any 

business activity, 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 identify the name, physical address, and any Internet address of the business or entity. 

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

bankruptcy petition, insolvency proceeding, or similar proceeding by or against such Defendant 

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 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. Health Center, Inc.. 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 15 of 34
16 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

XIV. RECORDKEEPING

IT IS FURTHER ORDERED that Defendants must create certain records for 10 years 

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

Defendant and each Individual Defendant, for any business that such Defendant, 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 all submissions to the Commission; and 

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

XV. COMPLIANCE MONITORING

IT IS FURTHER ORDERED that, for the purpose of monitoring Defendants’ 

compliance with this Order 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, each 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 is 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 is authorized to communicate 

directly with each Defendant. Defendant must permit representatives of the Commission to 

interview any employee or other person affiliated with any Defendant who has agreed to such an 

interview. The person interviewed may have counsel present. 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 16 of 34
17 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

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

representatives as consumers, suppliers, or other individuals or entities, to Defendants or any 

individual or entity affiliated with Defendants, without the necessity of 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. 

D. Upon written request from a representative of the Commission, any consumer 

reporting agency must furnish consumer reports concerning Individual Defendant, pursuant to 

Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. §1681b(a)(1). 

XVI. 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. 

IT IS SO ORDERED: 

_______________________________ 

UNITED STATES DISTRICT JUDGE 

DATED: _________________________ 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 17 of 34
/s/ Elizabeth K. Nach March 19, 2020

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 18 of 34
ATTACHMENT A 

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 19 of 34
381 

Federal Trade Commission § 310.2

PART 310—TELEMARKETING SALES 

RULE 16 CFR PART 310 

Sec. 

310.1 Scope of regulations in this part. 

310.2 Definitions. 

310.3 Deceptive telemarketing acts or practices. 

310.4 Abusive telemarketing acts or practices. 

310.5 Recordkeeping requirements. 

310.6 Exemptions. 

310.7 Actions by states and private persons. 

310.8 Fee for access to the National Do Not 

Call Registry. 

310.9 Severability. 

AUTHORITY: 15 U.S.C. 6101–6108. 

SOURCE: 75 FR 48516, Aug. 10, 2010, unless 

otherwise noted. 

§ 310.1 Scope of regulations in this

part.

This part implements the Telearketing and Consumer Fraud and

buse Prevention Act, 15 U.S.C. 6101-

108, as amended.

310.2 Definitions.

(a) Acquirer means a business organiation, financial institution, or an 

gent of a business organization or fiancial institution that has authority 

rom an organization that operates or 

icenses a credit card system to authorze merchants to accept, transmit, or 

rocess payment by credit card 

hrough the credit card system for 

oney, goods or services, or anything 

lse of value. 

m

A

6

§

z

a

n

f

l

i

p

t

m

e

kpayne on DSK54DXVN1OFR with $$_JOBEC29SE91.044</GPH>

Attachment A(1)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 20 of 34
382 

16 CFR Ch. I (1–1–18 Edition) 

kpayne on DSK54DXVN1OFR with $$_JOB

§ 310.2

(b) Attorney General means the chief

legal officer of a state. 

(c) Billing information means any data

that enables any person to access a

customer’s or donor’s account, such as 

a credit card, checking, savings, share

or similar account, utility bill, mortgage loan account, or debit card. 

(d) Caller identification service means a

service that allows a telephone subscriber to have the telephone number,

and, where available, name of the calling party transmitted contemporaneously with the telephone call, and

displayed on a device in or connected

to the subscriber’s telephone. 

(e) Cardholder means a person to

whom a credit card is issued or who is 

authorized to use a credit card on behalf of or in addition to the person to

whom the credit card is issued. 

(f) Cash-to-cash money transfer means

the electronic (as defined in section

106(2) of the Electronic Signatures in

Global and National Commerce Act (15 

U.S.C. 7006(2)) transfer of the value of

cash received from one person to another person in a different location

that is sent by a money transfer provider and received in the form of cash. 

For purposes of this definition, money 

transfer provider means any person or

financial institution that provides

cash-to-cash money transfers for a person in the normal course of its business, whether or not the person holds

an account with such person or financial institution. The term cash-to-cash 

money transfer includes a remittance

transfer, as defined in section 919(g)(2)

of the Electronic Fund Transfer Act

(‘‘EFTA’’), 15 U.S.C. 1693a, that is a

cash-to-cash transaction; however it

does not include any transaction that

is: 

(1) An electronic fund transfer as defined in section 903 of the EFTA; 

(2) Covered by Regulation E, 12 CFR

1005.20, pertaining to gift cards; or 

(3) Subject to the Truth in Lending

Act, 15 U.S.C. 1601 et seq. 

(g) Cash reload mechanism is a device,

authorization code, personal identification number, or other security measure 

that makes it possible for a person to

convert cash into an electronic (as defined in section 106(2) of the Electronic 

Signatures in Global and National

Commerce Act (15 U.S.C. 7006(2)) form

 8010 Q:\16\16V1.TXT 31

that can be used to add funds to a general-use prepaid card, as defined in 

Regulation E, 12 CFR 1005.2, or an account with a payment intermediary. 

For purposes of this definition, a cash 

reload mechanism is not itself a general-use prepaid debit card or a swipe 

reload process or similar method in 

which funds are added directly onto a 

person’s own general-use prepaid card 

or account with a payment intermediary. 

(h) Charitable contribution means any

donation or gift of money or any other 

thing of value. 

(i) Commission means the Federal

Trade Commission. 

(j) Credit means the right granted by

a creditor to a debtor to defer payment 

of debt or to incur debt and defer its 

payment. 

(k) Credit card means any card, plate,

coupon book, or other credit device existing for the purpose of obtaining 

money, property, labor, or services on 

credit. 

(l) Credit card sales draft means any

record or evidence of a credit card 

transaction. 

(m) Credit card system means any

method or procedure used to process 

credit card transactions involving credit cards issued or licensed by the operator of that system. 

(n) Customer means any person who is

or may be required to pay for goods or 

services offered through telemarketing. 

(o) Debt relief service means any program or service represented, directly or 

by implication, to renegotiate, settle, 

or in any way alter the terms of payment or other terms of the debt between a person and one or more unsecured creditors or debt collectors, including, but not limited to, a reduction 

in the balance, interest rate, or fees 

owed by a person to an unsecured creditor or debt collector. 

(p) Donor means any person solicited

to make a charitable contribution. 

(q) Established business relationship

means a relationship between a seller 

and a consumer based on: 

(1) the consumer’s purchase, rental,

or lease of the seller’s goods or services 

or a financial transaction between the 

Attachment A(2)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 21 of 34
383 

Federal Trade Commission § 310.2

m

s

c

t

t

f

t

w

p

p

F

e

c

o

m

i

c

p

w

m

p

m

o

i

a

t

T

a

i

F

2

m

m

s

U

C

c

a

a

s

f

U

b

I

o

w

i

o

g

kpayne on DSK54DXVN1OFR with $$_JOB

consumer and seller, within the eighteen (18) months immediately preceding 

the date of a telemarketing call; or 

(2) the consumer’s inquiry or application regarding a product or service offered by the seller, within the three (3) 

months immediately preceding the

date of a telemarketing call. 

(r) Free-to-pay conversion means, in an

offer or agreement to sell or provide 

any goods or services, a provision

under which a customer receives a 

product or service for free for an initial 

period and will incur an obligation to 

pay for the product or service if he or 

she does not take affirmative action to 

cancel before the end of that period. 

(s) Investment opportunity means anything, tangible or intangible, that is offered, offered for sale, sold, or traded 

based wholly or in part on representations, either express or implied, about 

past, present, or future income, profit, 

or appreciation. 

(t) Material means likely to affect a

person’s choice of, or conduct regarding, goods or services or a charitable 

contribution. 

(u) Merchant means a person who is

authorized under a written contract 

with an acquirer to honor or accept 

credit cards, or to transmit or process 

for payment credit card payments, for 

the purchase of goods or services or a 

charitable contribution. 

(v) Merchant agreement means a written contract between a merchant and 

an acquirer to honor or accept credit 

cards, or to transmit or process for 

payment credit card payments, for the 

purchase of goods or services or a charitable contribution. 

(w) Negative option feature means, in

an offer or agreement to sell or provide 

any goods or services, a provision

under which the customer’s silence or 

failure to take an affirmative action to 

reject goods or services or to cancel the 

agreement is interpreted by the seller 

as acceptance of the offer. 

(x) 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. 

(y) Person means any individual,

group, unincorporated association, limited or general partnership, corporation, or other business entity. 

fmt 8010 Q:\16\16V1.TXT 31

(z) Preacquired account information

eans any information that enables a

eller or telemarketer to cause a

harge to be placed against a cusomer’s or donor’s account without obaining the account number directly

rom the customer or donor during the

elemarketing transaction pursuant to

hich the account will be charged.

(aa) Prize means anything offered, or

urportedly offered, and given, or purortedly given, to a person by chance. 

or purposes of this definition, chance 

xists if a person is guaranteed to reeive an item and, at the time of the 

ffer or purported offer, the telearketer does not identify the specific 

tem that the person will receive. 

(bb) Prize promotion means: 

(1) A sweepstakes or other game of

hance; or 

(2) An oral or written express or imlied representation that a person has 

on, has been selected to receive, or 

ay be eligible to receive a prize or 

urported prize. 

(cc) Remotely created payment order

eans any payment instruction or

rder drawn on a person’s account that

s created by the payee or the payee’s

gent and deposited into or cleared

hrough the check clearing system.

he term includes, without limitation,

 ‘‘remotely created check,’’ as defined

n Regulation CC, Availability of

unds and Collection of Checks, 12 CFR

29.2(fff), but does not include a payent order cleared through an Autoated Clearinghouse (ACH) Network or

ubject to the Truth in Lending Act, 15

.S.C. 1601 et seq., and Regulation Z, 12

FR part 1026.

(dd) Seller means any person who, in

onnection with a telemarketing transction, provides, offers to provide, or 

rranges for others to provide goods or 

ervices to the customer in exchange 

or consideration. 

(ee) State means any state of the 

nited States, the District of Columia, Puerto Rico, the Northern Mariana 

slands, and any territory or possession 

f the United States. 

(ff) Telemarketer means any person 

ho, in connection with telemarketing, 

nitiates or receives telephone calls to 

r from a customer or donor. 

(gg) Telemarketing means a plan, proram, or campaign which is conducted 

Attachment A(3)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 22 of 34
384 

§ 310.3 16 CFR Ch. I (1–1–18 Edition) 

d

p

m

§

u

d

u

t

t

q

r

s

U

2

m

R

w

p

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. The term does not 

include the solicitation of sales

through the mailing of a catalog

which: contains a written description

or illustration of the goods or services 

offered for sale; includes the business

address of the seller; includes multiple 

pages of written material or illustrations; and has been issued not less frequently than once a year, when the

person making the solicitation does

not solicit customers by telephone but 

only receives calls initiated by customers in response to the catalog and

during those calls takes orders only

without further solicitation. For purposes of the previous sentence, the

term ‘‘further solicitation’’ does not

include providing the customer with

information about, or attempting to

sell, any other item included in the

same catalog which prompted the customer’s call or in a substantially similar catalog. 

(hh) Upselling means soliciting the

purchase of goods or services following 

an initial transaction during a single

telephone call. The upsell is a separate 

telemarketing transaction, not a continuation of the initial transaction. An 

‘‘external upsell’’ is a solicitation

made by or on behalf of a seller different from the seller in the initial

transaction, regardless of whether the

initial transaction and the subsequent

solicitation are made by the same telemarketer. An ‘‘internal upsell’’ is a solicitation made by or on behalf of the

same seller as in the initial transaction, regardless of whether the initial transaction and subsequent solicitation are made by the same telemarketer. 

[75 FR 48516, Aug. 10, 2010, as amended at 80 

FR 77557, Dec. 14, 2015] 

§ 310.3 Deceptive telemarketing acts or

practices. 

(a) Prohibited deceptive telemarketing

acts or practices. It is a deceptive telemarketing act or practice and a violation of this Rule for any seller or telemarketer to engage in the following

conduct: 

f

a

m

c

g

o

t

c

a

m

c

i

s

m

a

o

m

p

o

i

v

t

i

p

p

t

t

p

w

t

f

t

t

kpayne on DSK54DXVN1OFR with $$_JOB

Sfmt 8010 Q:\16\16V1.TXT 31

(1) Before a customer consents to

ay659 for goods or services offered,

ailing to disclose truthfully, in a clear 

nd conspicuous manner, the following 

aterial information: 

(i) The total costs to purchase, reeive, or use, and the quantity of, any 

oods or services that are the subject 

f the sales offer; 660

(ii) All material restrictions, limitaions, or conditions to purchase, reeive, or use the goods or services that 

re the subject of the sales offer; 

(iii) If the seller has a policy of not

aking refunds, cancellations, exhanges, or repurchases, a statement

nforming the customer that this is the 

eller’s policy; or, if the seller or telearketer makes a representation

bout a refund, cancellation, exchange, 

r repurchase policy, a statement of all 

aterial terms and conditions of such 

olicy; 

(iv) In any prize promotion, the odds

f being able to receive the prize, and, 

f the odds are not calculable in adance, the factors used in calculating 

he odds; that no purchase or payment 

s required to win a prize or to particiate in a prize promotion and that any 

urchase or payment will not increase 

he person’s chances of winning; and 

he no-purchase/no-payment method of 

articipating in the prize promotion

ith either instructions on how to paricipate or an address or local or tollree telephone number to which cusomers may write or call for informaion on how to participate; 

659 When a seller or telemarketer uses, or 

irects a customer to use, a courier to transort payment, the seller or telemarketer

ust make the disclosures required by

310.3(a)(1) before sending a courier to pick 

p payment or authorization for payment, or 

irecting a customer to have a courier pick 

p payment or authorization for payment. In 

he case of debt relief services, the seller or 

elemarketer must make the disclosures reuired by §310.3(a)(1) before the consumer enolls in an offered program. 

660 For offers of consumer credit products 

ubject to the Truth in Lending Act, 15

.S.C. 1601 et seq., and Regulation Z, 12 CFR 

26, compliance with the disclosure requireents under the Truth in Lending Act and 

egulation Z shall constitute compliance

ith §310.3(a)(1)(i) of this Rule. 

Attachment A(4)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 23 of 34
385 

Federal Trade Commission § 310.3 tdttrts§isicgotosfcttcpptpttpmltfseftatlatacmtc

kpayne on DSK54DXVN1OFR with $$_JOB

(v) All material costs or conditions

to receive or redeem a prize that is the 

subject of the prize promotion; 

(vi) In the sale of any goods or services represented to protect, insure, or 

otherwise limit a customer’s liability

in the event of unauthorized use of the 

customer’s credit card, the limits on a 

cardholder’s liability for unauthorized 

use of a credit card pursuant to 15

U.S.C. 1643; 

(vii) If the offer includes a negative

option feature, all material terms and 

conditions of the negative option feature, including, but not limited to, the 

fact that the customer’s account will

be charged unless the customer takes 

an affirmative action to avoid the

charge(s), the date(s) the charge(s) will 

be submitted for payment, and the specific steps the customer must take to 

avoid the charge(s); and 

(viii) In the sale of any debt relief

service: 

(A) the amount of time necessary to

achieve the represented results, and to 

the extent that the service may include 

a settlement offer to any of the customer’s creditors or debt collectors,

the time by which the debt relief service provider will make a bona fide settlement offer to each of them; 

(B) to the extent that the service

may include a settlement offer to any 

of the customer’s creditors or debt collectors, the amount of money or the

percentage of each outstanding debt

that the customer must accumulate before the debt relief service provider

will make a bona fide settlement offer 

to each of them; 

(C) to the extent that any aspect of

the debt relief service relies upon or results in the customer’s failure to make 

timely payments to creditors or debt

collectors, that the use of the debt relief service will likely adversely affect 

the customer’s creditworthiness, may

result in the customer being subject to 

collections or sued by creditors or debt 

collectors, and may increase the

amount of money the customer owes

due to the accrual of fees and interest; 

and 

(D) to the extent that the debt relief

service requests or requires the customer to place funds in an account at 

an insured financial institution, that

the customer owns the funds held in

fmt 8010 Q:\16\16V1.TXT 31

he account, the customer may withraw from the debt relief service at any 

ime without penalty, and, if the cusomer withdraws, the customer must 

eceive all funds in the account, other 

han funds earned by the debt relief 

ervice in compliance with

310.4(a)(5)(i)(A) through (C). 

(2) Misrepresenting, directly or by

mplication, in the sale of goods or 

ervices any of the following material 

nformation: 

(i) The total costs to purchase, reeive, or use, and the quantity of, any 

oods or services that are the subject 

f a sales offer; 

(ii) Any material restriction, limitaion, or condition to purchase, receive, 

r use goods or services that are the 

ubject of a sales offer; 

(iii) Any material aspect of the perormance, efficacy, nature, or central

haracteristics of goods or services

hat are the subject of a sales offer; 

(iv) Any material aspect of the naure or terms of the seller’s refund, 

ancellation, exchange, or repurchase 

olicies; 

(v) Any material aspect of a prize

romotion including, but not limited 

o, the odds of being able to receive a 

rize, the nature or value of a prize, or 

hat a purchase or payment is required 

o win a prize or to participate in a

rize promotion; 

(vi) Any material aspect of an investent opportunity including, but not 

imited to, risk, liquidity, earnings poential, or profitability; 

(vii) A seller’s or telemarketer’s afiliation with, or endorsement or sponorship by, any person or government 

ntity; 

(viii) That any customer needs ofered goods or services to provide proections a customer already has pursunt to 15 U.S.C. 1643; 

(ix) Any material aspect of a negaive option feature including, but not

imited to, the fact that the customer’s

ccount will be charged unless the cusomer takes an affirmative action to 

void the charge(s), the date(s) the

harge(s) will be submitted for payent, and the specific steps the cusomer must take to avoid the

harge(s); or 

Attachment A(5)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 24 of 34
386 

§ 310.3 16 CFR Ch. I (1–1–18 Edition) 

d

t

t

t

t

f

a

o

f

s

p

o

p

c

i

s

d

b

g

t

t

o

i

n

t

c

o

c

p

t

m

f

§

c

d

c

t

t

i

t

b

w

t

c

f

s

f

c

kpayne on DSK54DXVN1OFR with $$_JOB

(x) Any material aspect of any debt

relief service, including, but not limited to, the amount of money or the

percentage of the debt amount that a 

customer may save by using such service; the amount of time necessary to

achieve the represented results; the

amount of money or the percentage of 

each outstanding debt that the customer must accumulate before the provider of the debt relief service will initiate attempts with the customer’s

creditors or debt collectors or make a 

bona fide offer to negotiate, settle, or 

modify the terms of the customer’s

debt; the effect of the service on a customer’s creditworthiness; the effect of 

the service on collection efforts of the 

customer’s creditors or debt collectors; 

the percentage or number of customers 

who attain the represented results; and 

whether a debt relief service is offered 

or provided by a non-profit entity. 

(3) Causing billing information to be

submitted for payment, or collecting or 

attempting to collect payment for

goods or services or a charitable contribution, directly or indirectly, without the customer’s or donor’s express

verifiable authorization, except when

the method of payment used is a credit 

card subject to protections of the

Truth in Lending Act and Regulation

Z,661 or a debit card subject to the protections of the Electronic Fund Transfer Act and Regulation E.662 Such authorization shall be deemed verifiable 

if any of the following means is employed: 

(i) Express written authorization by

the customer or donor, which includes 

the customer’s or donor’s signature;663

(ii) Express oral authorization which

is audio-recorded and made available

upon request to the customer or donor, 

and the customer’s or donor’s bank or 

other billing entity, and which evidences clearly both the customer’s or 

onor’s authorization of payment for 

he goods or services or charitable conribution that are the subject of the 

elemarketing transaction and the cusomer’s or donor’s receipt of all of the 

ollowing information: 

(A) An accurate description, clearly

nd conspicuously stated, of the goods 

r services or charitable contribution 

or which payment authorization is 

ought; 

(B) The number of debits, charges, or

ayments (if more than one);

(C) The date(s) the debit(s), charge(s),

r payment(s) will be submitted for

ayment;

(D) The amount(s) of the debit(s),

harge(s), or payment(s); 

(E) The customer’s or donor’s name;

(F) The customer’s or donor’s billing

nformation, identified with sufficient

pecificity such that the customer or

onor understands what account will

e used to collect payment for the

oods or services or charitable conribution that are the subject of the

elemarketing transaction;

(G) A telephone number for customer

r donor inquiry that is answered durng normal business hours; and

(H) The date of the customer’s or door’s oral authorization; or

(iii) Written confirmation of the

ransaction, identified in a clear and 

onspicuous manner as such on the 

utside of the envelope, sent to the 

ustomer or donor via first class mail 

rior to the submission for payment of 

he customer’s or donor’s billing inforation, and that includes all of the inormation contained in

§310.3(a)(3)(ii)(A)-(G) and a clear and

onspicuous statement of the proceures by which the customer or donor 

an obtain a refund from the seller or 

elemarketer or charitable organizaion in the event the confirmation is 

naccurate; provided, however, that 

his means of authorization shall not 

e deemed verifiable in instances in 

hich goods or services are offered in a 

ransaction involving a free-to-pay 

onversion and preacquired account inormation. 

(4) Making a false or misleading

tatement to induce any person to pay

or goods or services or to induce a

haritable contribution.

661 Truth in Lending Act, 15 U.S.C. 1601 et 

seq., and Regulation Z, 12 CFR part 226. 662 Electronic Fund Transfer Act, 15 U.S.C. 

1693 et seq., and Regulation E, 12 CFR part 

205. 663 For purposes of this Rule, the term 

‘‘signature’’ shall include an electronic or 

digital form of signature, to the extent that 

such form of signature is recognized as a 

valid signature under applicable federal law 

or state contract law. 

Attachment 

t 8010

A(6)

Q:\16\16V1.TXT 31

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 25 of 34
387 

Federal Trade Commission § 310.4

kpayne on DSK54DXVN1OFR with $$_JOB

(b) Assisting and facilitating. It is a deceptive telemarketing act or practice

and a violation of this Rule for a person to provide substantial assistance or 

support to any seller or telemarketer

when that person knows or consciously 

avoids knowing that the seller or telemarketer is engaged in any act or practice that violates §§310.3(a), (c) or (d), 

or §310.4 of this Rule. 

(c) Credit card laundering. Except as

expressly permitted by the applicable

credit card system, it is a deceptive

telemarketing act or practice and a

violation of this Rule for: 

(1) A merchant to present to or deposit into, or cause another to present 

to or deposit into, the credit card system for payment, a credit card sales

draft generated by a telemarketing

transaction that is not the result of a 

telemarketing credit card transaction

between the cardholder and the merchant; 

(2) Any person to employ, solicit, or

otherwise cause a merchant, or an employee, representative, or agent of the 

merchant, to present to or deposit into 

the credit card system for payment, a 

credit card sales draft generated by a 

telemarketing transaction that is not

the result of a telemarketing credit

card transaction between the cardholder and the merchant; or 

(3) Any person to obtain access to the

credit card system through the use of a 

business relationship or an affiliation

with a merchant, when such access is 

not authorized by the merchant agreement or the applicable credit card system. 

(d) Prohibited deceptive acts or practices in the solicitation of charitable contributions. It is a fraudulent charitable 

solicitation, a deceptive telemarketing 

act or practice, and a violation of this 

Rule for any telemarketer soliciting

charitable contributions to misrepresent, directly or by implication, any of 

the following material information: 

(1) The nature, purpose, or mission of

any entity on behalf of which a charitable contribution is being requested; 

(2) That any charitable contribution

is tax deductible in whole or in part; 

(3) The purpose for which any charitable contribution will be used;

(4) The percentage or amount of any

charitable contribution that will go to


a charitable organization or to any 

particular charitable program; 

(5) Any material aspect of a prize

promotion including, but not limited 

to: the odds of being able to receive a 

prize; the nature or value of a prize; or 

that a charitable contribution is required to win a prize or to participate 

in a prize promotion; or 

(6) A charitable organization’s or

telemarketer’s affiliation with, or endorsement or sponsorship by, any person or government entity. 

[75 FR 48516, Aug. 10, 2010, as amended at 80 

FR 77558, Dec. 14, 2015] 

§ 310.4 Abusive telemarketing acts or

practices. 

(a) Abusive conduct generally. It is an

abusive telemarketing act or practice 

and a violation of this Rule for any 

seller or telemarketer to engage in the 

following conduct: 

(1) Threats, intimidation, or the use

of profane or obscene language; 

(2) Requesting or receiving payment

of any fee or consideration for goods or 

services represented to remove derogatory information from, or improve, a 

person’s credit history, credit record, 

or credit rating until: 

(i) The time frame in which the seller

has represented all of the goods or 

services will be provided to that person 

has expired; and 

(ii) The seller has provided the person

with documentation in the form of a 

consumer report from a consumer reporting agency demonstrating that the 

promised results have been achieved, 

such report having been issued more 

than six months after the results were 

achieved. Nothing in this Rule should 

be construed to affect the requirement 

in the Fair Credit Reporting Act, 15 

U.S.C. 1681, that a consumer report 

may only be obtained for a specified 

permissible purpose; 

(3) Requesting or receiving payment

of any fee or consideration from a person for goods or services represented to 

recover or otherwise assist in the return of money or any other item of 

value paid for by, or promised to, that 

person in a previous transaction, until 

seven (7) business days after such 

money or other item is delivered to 

that person. This provision shall not 

Attachment A(7)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 26 of 34
388 

§ 310.4 16 CFR Ch. I (1–1–18 Edition) 

kpayne on DSK54DXVN1OFR with $$_JOB

apply to goods or services provided to a 

person by a licensed attorney; 

(4) Requesting or receiving payment

of any fee or consideration in advance

of obtaining a loan or other extension

of credit when the seller or telemarketer has guaranteed or represented a high likelihood of success in 

obtaining or arranging a loan or other 

extension of credit for a person; 

(5)(i) Requesting or receiving payment of any fee or consideration for

any debt relief service until and unless: 

(A) The seller or telemarketer has renegotiated, settled, reduced, or otherwise altered the terms of at least one

debt pursuant to a settlement agreement, debt management plan, or other 

such valid contractual agreement executed by the customer; 

(B) The customer has made at least

one payment pursuant to that settlement agreement, debt management

plan, or other valid contractual agreement between the customer and the

creditor or debt collector; and 

(C) To the extent that debts enrolled

in a service are renegotiated, settled,

reduced, or otherwise altered individually, the fee or consideration either: 

(1) Bears the same proportional relationship to the total fee for renegotiating, settling, reducing, or altering

the terms of the entire debt balance as 

the individual debt amount bears to

the entire debt amount. The individual 

debt amount and the entire debt

amount are those owed at the time the 

debt was enrolled in the service; or 

(2) Is a percentage of the amount

saved as a result of the renegotiation,

settlement, reduction, or alteration.

The percentage charged cannot change 

from one individual debt to another.

The amount saved is the difference between the amount owed at the time the 

debt was enrolled in the service and the 

amount actually paid to satisfy the

debt. 

(ii) Nothing in §310.4(a)(5)(i) prohibits

requesting or requiring the customer

to place funds in an account to be used 

for the debt relief provider’s fees and

for payments to creditors or debt collectors in connection with the renegotiation, settlement, reduction, or other 

alteration of the terms of payment or

other terms of a debt, provided that: 

0 Q:\16\16V1.TXT 31

(A) The funds are held in an account

at an insured financial institution; 

(B) The customer owns the funds held

in the account and is paid accrued interest on the account, if any; 

(C) The entity administering the account is not owned or controlled by, or 

in any way affiliated with, the debt relief service; 

(D) The entity administering the account does not give or accept any

money or other compensation in exchange for referrals of business involving the debt relief service; and 

(E) The customer may withdraw from

the debt relief service at any time

without penalty, and must receive all 

funds in the account, other than funds 

earned by the debt relief service in 

compliance with §310.4(a)(5)(i)(A)

through (C), within seven (7) business 

days of the customer’s request. 

(6) Disclosing or receiving, for consideration, unencrypted consumer account numbers for use in telemarketing; provided, however, that

this paragraph shall not apply to the 

disclosure or receipt of a customer’s or 

donor’s billing information to process a 

payment for goods or services or a

charitable contribution pursuant to a 

transaction; 

(7) Causing billing information to be

submitted for payment, directly or indirectly, without the express informed 

consent of the customer or donor. In 

any telemarketing transaction, the

seller or telemarketer must obtain the 

express informed consent of the customer or donor to be charged for the 

goods or services or charitable contribution and to be charged using the 

identified account. In any telemarketing transaction involving

preacquired account information, the 

requirements in paragraphs (a)(7)(i)

through (ii) of this section must be met 

to evidence express informed consent. 

(i) In any telemarketing transaction

involving preacquired account information and a free-to-pay conversion feature, the seller or telemarketer must: 

(A) Obtain from the customer, at a

minimum, the last four (4) digits of the 

account number to be charged; 

(B) Obtain from the customer his or

her express agreement to be charged 

for the goods or services and to be 

Attachment A(8)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 27 of 34
389 

Federal Trade Commission § 310.4

kpayne on DSK54DXVN1OFR with $$_JOB

charged using the account number pursuant to paragraph (a)(7)(i)(A) of this

section; and, 

(C) Make and maintain an audio recording of the entire telemarketing

transaction. 

(ii) In any other telemarketing transaction involving preacquired account

information not described in paragraph

(a)(7)(i) of this section, the seller or

telemarketer must: 

(A) At a minimum, identify the account to be charged with sufficient

specificity for the customer or donor to

understand what account will be

charged; and 

(B) Obtain from the customer or

donor his or her express agreement to

be charged for the goods or services

and to be charged using the account

number identified pursuant to paragraph (a)(7)(ii)(A) of this section; 

(8) Failing to transmit or cause to be

transmitted the telephone number,

and, when made available by the telemarketer’s carrier, the name of the

telemarketer, to any caller identification service in use by a recipient of a

telemarketing call; provided that it

shall not be a violation to substitute

(for the name and phone number used

in, or billed for, making the call) the

name of the seller or charitable organization on behalf of which a telemarketing call is placed, and the seller’s or charitable organization’s customer or donor service telephone number, which is answered during regular

business hours; 

(9) Creating or causing to be created,

directly or indirectly, a remotely created payment order as payment for

goods or services offered or sold

through telemarketing or as a charitable contribution solicited or sought

through telemarketing; or 

(10) Accepting from a customer or

donor, directly or indirectly, a cash-tocash money transfer or cash reload

mechanism as payment for goods or

services offered or sold through telemarketing or as a charitable contribution solicited or sought through telemarketing. 

(b) Pattern of calls. (1) It is an abusive

telemarketing act or practice and a

violation of this Rule for a telemarketer to engage in, or for a seller


to cause a telemarketer to engage in,

the following conduct: 

(i) Causing any telephone to ring, or

engaging any person in telephone conversation, repeatedly or continuously

with intent to annoy, abuse, or harass

any person at the called number; 

(ii) Denying or interfering in any

way, directly or indirectly, with a person’s right to be placed on any registry 

of names and/or telephone numbers of

persons who do not wish to receive outbound telephone calls established to

comply with paragraph (b)(1)(iii)(A) of

this section, including, but not limited 

to, harassing any person who makes

such a request; hanging up on that person; failing to honor the request; requiring the person to listen to a sales

pitch before accepting the request; assessing a charge or fee for honoring the 

request; requiring a person to call a

different number to submit the request; and requiring the person to identify the seller making the call or on

whose behalf the call is made; 

(iii) Initiating any outbound telephone call to a person when: 

(A) That person previously has stated

that he or she does not wish to receive 

an outbound telephone call made by or 

on behalf of the seller whose goods or

services are being offered or made on

behalf of the charitable organization

for which a charitable contribution is

being solicited; or 

(B) That person’s telephone number

is on the ‘‘do-not-call’’ registry, maintained by the Commission, of persons

who do not wish to receive outbound

telephone calls to induce the purchase

of goods or services unless the seller or 

telemarketer: 

(1) Can demonstrate that the seller

has obtained the express agreement, in 

writing, of such person to place calls to 

that person. Such written agreement

shall clearly evidence such person’s authorization that calls made by or on

behalf of a specific party may be placed 

to that person, and shall include the

telephone number to which the calls

may be placed and the signature 664 of 

that person; or 

664For purposes of this Rule, the term 

‘‘signature’’ shall include an electronic or 

digital form of signature, to the extent that 

such form of signature is recognized as a 

Continued 

Attachment A(9)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 28 of 34
90 

§ 310.4 16 CFR Ch. I (1–1–18 Edition) 

valid signature under applicable federal law 

or state contract law. (2) Can demonstrate that the seller

has 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 under paragraph (b)(1)(iii)(A) of

this section; or 

(iv) Abandoning any outbound telephone call. An outbound telephone call 

is ‘‘abandoned’’ under this section if a

person answers it and the telemarketer 

does not connect the call to a sales representative within two (2) seconds of

the person’s completed greeting. 

(v) Initiating any outbound telephone

call that delivers a prerecorded message, other than a prerecorded message 

permitted for compliance with the call 

abandonment safe harbor in

§310.4(b)(4)(iii), unless:

(A) In any such call to induce the

purchase of any good or service, the

seller has obtained from the recipient

of the call an express agreement, in

writing, that: 

(i) The seller obtained only after a

clear and conspicuous disclosure that

the purpose of the agreement is to authorize the seller to place prerecorded

calls to such person; 

(ii) The seller obtained without requiring, directly or indirectly, that the 

agreement be executed as a condition

of purchasing any good or service; 

(iii) Evidences the willingness of the

recipient of the call to receive calls

that deliver prerecorded messages by

or on behalf of a specific seller; and 

(iv) Includes such person’s telephone

number and signature;665 and 

(B) In any such call to induce the

purchase of any good or service, or to

induce a charitable contribution from a 

member of, or previous donor to, a nonprofit charitable organization on whose 

behalf the call is made, the seller or

telemarketer: 

(i) Allows the telephone to ring for at

least fifteen (15) seconds or four (4)

rings before disconnecting an unanswered call; and 

(ii) Within two (2) seconds after the

ompleted greeting of the person

alled, plays a prerecorded message

hat promptly provides the disclosures

equired by §310.4(d) or (e), followed

mmediately by a disclosure of one or

oth of the following: 

(A) In the case of a call that could be

nswered in person by a consumer, that 

he person called can use an automated 

nteractive voice and/or keypress-actiated opt-out mechanism to assert a

o Not Call request pursuant to

310.4(b)(1)(iii)(A) at any time during

he message. The mechanism must: 

(1) Automatically add the number

alled to the seller’s entity-specific Do 

ot Call list; 

(2) Once invoked, immediately disonnect the call; and

(3) Be available for use at any time

uring the message; and 

(B) In the case of a call that could be

nswered by an answering machine or

oicemail service, that the person

alled can use a toll-free telephone

umber to assert a Do Not Call request 

ursuant to §310.4(b)(1)(iii)(A). The

umber provided must connect directly 

o an automated interactive voice or

eypress-activated opt-out mechanism

hat:

(1) Automatically adds the number

alled to the seller’s entity-specific Do 

ot Call list; 

(2) Immediately thereafter disonnects the call; and

(3) Is accessible at any time throughut the duration of the telemarketing

ampaign; and

(iii) Complies with all other requireents of this part and other applicable 

ederal and state laws. 

(C) Any call that complies with all

pplicable requirements of this pararaph (v) shall not be deemed to violate

310.4(b)(1)(iv) of this part.

(D) This paragraph (v) shall not apply

o any outbound telephone call that deivers a prerecorded healthcare mesage made by, or on behalf of, a covered 

ntity or its business associate, as

hose terms are defined in the HIPAA

rivacy Rule, 45 CFR 160.103. 

(2) It is an abusive telemarketing act

r practice and a violation of this Rule

or any person to sell, rent, lease, purhase, or use any list established to

omply with §310.4(b)(1)(iii)(A), or

cctribativD§tcNcdavcnpntktcNcocmfag§tlsetPofcc

kpayne on DSK54DXVN1OFR with $$_JOB

10 Q:\16\16V1.TXT 31

665 For purposes of this Rule, the term 

‘‘signature’’ shall include an electronic or 

digital form of signature, to the extent that 

such form of signature is recognized as a 

valid signature under applicable federal law 

or state contract law. 

3

Attachment A(10)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 29 of 34
391 

Federal Trade Commission § 310.4 dcettdissgptntcr§taampaapomtaocccpisinppptdcp

kpayne on DSK54DXVN1OFR with $$_JOB

maintained by the Commission pursuant to §310.4(b)(1)(iii)(B), for any purpose except compliance with the provisions of this Rule or otherwise to prevent telephone calls to telephone numbers on such lists. 

(3) A seller or telemarketer will not

be liable for violating §310.4(b)(1)(ii)

and (iii) if it can demonstrate that, as

part of the seller’s or telemarketer’s

routine business practice: 

(i) It has established and implemented written procedures to comply

with §310.4(b)(1)(ii) and (iii); 

(ii) It has trained its personnel, and

any entity assisting in its compliance,

in the procedures established pursuant

to §310.4(b)(3)(i); 

(iii) The seller, or a telemarketer or

another person acting on behalf of the

seller or charitable organization, has

maintained and recorded a list of telephone numbers the seller or charitable

organization may not contact, in compliance with §310.4(b)(1)(iii)(A); 

(iv) The seller or a telemarketer uses

a process to prevent telemarketing to

any telephone number on any list established pursuant to §310.4(b)(3)(iii) or

310.4(b)(1)(iii)(B), employing a version

of the ‘‘do-not-call’’ registry obtained

from the Commission no more than

thirty-one (31) days prior to the date

any call is made, and maintains

records documenting this process; 

(v) The seller or a telemarketer or

another person acting on behalf of the

seller or charitable organization, monitors and enforces compliance with the

procedures established pursuant to

§310.4(b)(3)(i); and

(vi) Any subsequent call otherwise

violating paragraph (b)(1)(ii) or (iii) of

this section is the result of error and

not of failure to obtain any information necessary to comply with a request pursuant to paragraph

(b)(1)(iii)(A) of this section not to receive further calls by or on behalf of a

seller or charitable organization. 

(4) A seller or telemarketer will not

be liable for violating §310.4(b)(1)(iv) if:

(i) The seller or telemarketer employs technology that ensures abandonment of no more than three (3) percent of all calls answered by a person,

measured over the duration of a single

calling campaign, if less than 30 days,

or separately over each successive 30-

010 Q:\16\16V1.TXT 31

ay period or portion thereof that the

ampaign continues. 

(ii) The seller or telemarketer, for

ach telemarketing call placed, allows

he telephone to ring for at least fifeen (15) seconds or four (4) rings before 

isconnecting an unanswered call; 

(iii) Whenever a sales representative

s not available to speak with the peron answering the call within two (2)

econds after the person’s completed

reeting, the seller or telemarketer

romptly plays a recorded message

hat states the name and telephone

umber of the seller on whose behalf

he call was placed666; and 

(iv) The seller or telemarketer, in acordance with §310.5(b)-(d), retains

ecords establishing compliance with

310.4(b)(4)(i)-(iii).

(c) Calling time restrictions. Without

he prior consent of a person, it is an

busive telemarketing act or practice

nd a violation of this Rule for a telearketer to engage in outbound telehone calls to a person’s residence at

ny time other than between 8:00 a.m.

nd 9:00 p.m. local time at the called

erson’s location. 

(d) Required oral disclosures in the sale

f goods or services. It is an abusive telearketing act or practice and a violaion of this Rule for a telemarketer in

n outbound telephone call or internal

r external upsell to induce the purhase of goods or services to fail to dislose truthfully, promptly, and in a

lear and conspicuous manner to the

erson receiving the call, the following 

nformation: 

(1) The identity of the seller;

(2) That the purpose of the call is to

ell goods or services;

(3) The nature of the goods or servces; and

(4) That no purchase or payment is

ecessary to be able to win a prize or

articipate in a prize promotion if a

rize promotion is offered and that any 

urchase or payment will not increase

he person’s chances of winning. This

isclosure must be made before or in

onjunction with the description of the 

rize to the person called. If requested

666 This provision does not affect any seller’s or telemarketer’s obligation to comply 

with relevant state and federal laws, including but not limited to the TCPA, 47 U.S.C. 

227, and 47 CFR part 64.1200. 

Attachment A(11)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 30 of 34
392 

§ 310.5 16 CFR Ch. I (1–1–18 Edition) 

by that person, the telemarketer must

disclose the no-purchase/no-payment

entry method for the prize promotion;

provided, however, that, in any internal upsell for the sale of goods or services, the seller or telemarketer must

provide the disclosures listed in this

section only to the extent that the information in the upsell differs from the

disclosures provided in the initial telemarketing transaction. 

(e) Required oral disclosures in charitable solicitations. It is an abusive telemarketing act or practice and a violation of this Rule for a telemarketer, in

an outbound telephone call to induce a

charitable contribution, to fail to disclose truthfully, promptly, and in a

clear and conspicuous manner to the

person receiving the call, the following

information: 

(1) The identity of the charitable organization on behalf of which the request is being made; and 

(2) That the purpose of the call is to

solicit a charitable contribution. 

[75 FR 48516, Aug. 10, 2010, as amended at 76

FR 58716, Sept. 22, 2011; 80 FR 77559, Dec. 14,

2015] 

§ 310.5 Recordkeeping requirements.

(a) Any seller or telemarketer shall

keep, for a period of 24 months from 

the date the record is produced, the following records relating to its telemarketing activities: 

(1) All substantially different advertising, brochures, telemarketing

scripts, and promotional materials; 

(2) The name and last known address

of each prize recipient and the prize 

awarded for prizes that are represented, directly or by implication, to 

have a value of $25.00 or more; 

(3) The name and last known address

of each customer, the goods or services 

purchased, the date such goods or services were shipped or provided, and the 

amount paid by the customer for the 

goods or services;667

(4) The name, any fictitious name

used, the last known home address and 

telephone number, and the job title(s) 

for all current and former employees 

directly involved in telephone sales or 

solicitations; provided, however, that if 

the seller or telemarketer permits fictitious names to be used by employees, 

each fictitious name must be traceable 

to only one specific employee; and 

(5) All verifiable authorizations or

records of express informed consent or 

express agreement required to be provided or received under this Rule. 

(b) A seller or telemarketer may

keep the records required by §310.5(a) 

in any form, and in the same manner, 

format, or place as they keep such 

records in the ordinary course of business. Failure to keep all records required by §310.5(a) shall be a violation 

of this Rule. 

(c) The seller and the telemarketer

calling on behalf of the seller may, by 

written agreement, allocate responsibility between themselves for the recordkeeping required by this Section. 

When a seller and telemarketer have 

entered into such an agreement, the 

terms of that agreement shall govern, 

and the seller or telemarketer, as the 

case may be, need not keep records 

that duplicate those of the other. If the 

agreement is unclear as to who must 

maintain any required record(s), or if 

no such agreement exists, the seller 

shall be responsible for complying with 

§§310.5(a)(1)-(3) and (5); the telemarketer shall be responsible for complying with §310.5(a)(4). 

(d) In the event of any dissolution or

termination of the seller’s or telemarketer’s business, the principal of 

that seller or telemarketer shall maintain all records as required under this 

section. In the event of any sale, assignment, or other change in ownership 

of the seller’s or telemarketer’s business, the successor business shall maintain all records required under this section. 

§ 310.6 Exemptions.

(a) Solicitations to induce charitable

contributions via outbound telephone 

calls are not covered by

§310.4(b)(1)(iii)(B) of this Rule.

(b) The following acts or practices

are exempt from this Rule: 

kpayne on DSK54DXVN1OFR with $$_JOB

0 Q:\16\16V1.TXT 31

667 For offers of consumer credit products 

subject to the Truth in Lending Act, 15 

U.S.C. 1601 et seq., and Regulation Z, 12 CFR 

226, compliance with the recordkeeping requirements under the Truth in Lending Act, 

and Regulation Z, shall constitute compliance with §310.5(a)(3) of this Rule. 

Attachment A(12)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 31 of 34
393 

Federal Trade Commission § 310.7

kpayne on DSK54DXVN1OFR with $$_JOB

(1) The sale of pay-per-call services

subject to the Commission’s Rule entitled ‘‘Trade Regulation Rule Pursuant 

to the Telephone Disclosure and Dispute Resolution Act of 1992,’’ 16 CFR 

part 308, provided, however, that this 

exemption does not apply to the requirements of §§310.4(a)(1), (a)(7), (b), 

and (c); 

(2) The sale of franchises subject to

the Commission’s Rule entitled ‘‘Disclosure Requirements and Prohibitions 

Concerning Franchising,’’ (‘‘Franchise 

Rule’’) 16 CFR part 436, and the sale of 

business opportunities subject to the 

Commission’s Rule entitled ‘‘Disclosure Requirements and Prohibitions

Concerning Business Opportunities,’’

(‘‘Business Opportunity Rule’’) 16 CFR 

part 437, provided, however, that this 

exemption does not apply to the requirements of §§310.4(a)(1), (a)(7), (b), 

and (c); 

(3) Telephone calls in which the sale

of goods or services or charitable solicitation is not completed, and payment 

or authorization of payment is not required, until after a face-to-face sales 

or donation presentation by the seller 

or charitable organization, provided, 

however, that this exemption does not 

apply to the requirements of

§§310.4(a)(1), (a)(7), (b), and (c);

(4) Telephone calls initiated by a customer or donor that are not the result 

of any solicitation by a seller, charitable organization, or telemarketer,

provided, however, that this exemption 

does not apply to any instances of 

upselling included in such telephone 

calls; 

(5) Telephone calls initiated by a customer or donor in response to an advertisement through any medium, other 

than direct mail solicitation, provided, 

however, that this exemption does not 

apply to: 

(i) Calls initiated by a customer or

donor in response to an advertisement 

relating to investment opportunities, 

debt relief services, business opportunities other than business arrangements 

covered by the Franchise Rule or Business Opportunity Rule, or advertisements involving offers for goods or 

services described in §310.3(a)(1)(vi) or 

§310.4(a)(2) through (4);

(ii) The requirements of §310.4(a)(9)

or (10); or 


(iii) Any instances of upselling included in such telephone calls; 

(6) Telephone calls initiated by a customer or donor in response to a direct 

mail solicitation, including solicitations via the U.S. Postal Service, facsimile transmission, electronic mail, 

and other similar methods of delivery 

in which a solicitation is directed to 

specific address(es) or person(s), that 

clearly, conspicuously, and truthfully 

discloses all material information listed in §310.3(a)(1), for any goods or services offered in the direct mail solicitation, and that contains no material 

misrepresentation regarding any item 

contained in §310.3(d) for any requested 

charitable contribution; provided, however, that this exemption does not 

apply to: 

(i) Calls initiated by a customer in

response to a direct mail solicitation 

relating to prize promotions, investment opportunities, debt relief services, business opportunities other than 

business arrangements covered by the 

Franchise Rule or Business Opportunity Rule, or goods or services described in §310.3(a)(1)(vi) or §310.4(a)(2) 

through (4); 

(ii) The requirements of §310.4(a)(9)

or (10); or 

(iii) Any instances of upselling included in such telephone calls; and 

(7) Telephone calls between a telemarketer and any business to induce 

the purchase of goods or services or a 

charitable contribution by the business, except calls to induce the retail 

sale of nondurable office or cleaning 

supplies; provided, however, that 

§§310.4(b)(1)(iii)(B) and 310.5 shall not

apply to sellers or telemarketers of

nondurable office or cleaning supplies.

[75 FR 48516, Aug. 10, 2010, as amended at 80 

FR 77559, Dec. 14, 2015] 

§ 310.7 Actions by states and private

persons. 

(a) Any attorney general or other officer of a state authorized by the state 

to bring an action under the Telemarketing and Consumer Fraud and 

Abuse Prevention Act, and any private 

person who brings an action under that 

Act, shall serve written notice of its 

action on the Commission, if feasible, 

prior to its initiating an action under 

this Rule. The notice shall be sent to 

Attachment A(13)

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 32 of 34
394 

§ 310.8 16 CFR Ch. I (1–1–18 Edition) 

the Office of the Director, Bureau of

Consumer Protection, Federal Trade

Commission, Washington, DC 20580, and

shall include a copy of the state’s or

private person’s complaint and any

other pleadings to be filed with the

court. If prior notice is not feasible,

the state or private person shall serve

the Commission with the required notice immediately upon instituting its

action. 

(b) Nothing contained in this Section

shall prohibit any attorney general or

other authorized state official from

proceeding in state court on the basis

of an alleged violation of any civil or

criminal statute of such state. 

§ 310.8 Fee for access to the National

Do Not Call Registry. 

(a) It is a violation of this Rule for

any seller to initiate, or cause any

telemarketer to initiate, an outbound

telephone call to any person whose

telephone number is within a given

area code unless such seller, either directly or through another person, first 

has paid the annual fee, required by

§310.8(c), for access to telephone numbers within that area code that are included in the National Do Not Call

Registry maintained by the Commission under § 310.4(b)(1)(iii)(B); provided,

however, that such payment is not necessary if the seller initiates, or causes

a telemarketer to initiate, calls solely

to persons pursuant to

§§310.4(b)(1)(iii)(B)(i) or (ii), and the

seller does not access the National Do

Not Call Registry for any other purpose.

(b) It is a violation of this Rule for

any telemarketer, on behalf of any seller, to initiate an outbound telephone

call to any person whose telephone

number is within a given area code unless that seller, either directly or

through another person, first has paid

the annual fee, required by §310.8(c),

for access to the telephone numbers

within that area code that are included 

in the National Do Not Call Registry;

provided, however, that such payment

is not necessary if the seller initiates,

or causes a telemarketer to initiate,

calls solely to persons pursuant to

§§310.4(b)(1)(iii)(B)(i) or (ii), and the

seller does not access the National Do

Not Call Registry for any other purpose. 

(c) The annual fee, which must be

paid by any person prior to obtaining 

access to the National Do Not Call 

Registry, is $62 for each area code of 

data accessed, up to a maximum of 

$17,021; provided, however, that there 

shall be no charge to any person for accessing the first five area codes of data, 

and provided further, that there shall be 

no charge to any person engaging in or 

causing others to engage in outbound 

telephone calls to consumers and who 

is accessing area codes of data in the 

National Do Not Call Registry if the 

person is permitted to access, but is 

not required to access, the National Do 

Not Call Registry under this Rule, 47 

CFR 64.1200, or any other Federal regulation or law. No person may participate in any arrangement to share the 

cost of accessing the National Do Not 

Call Registry, including any arrangement with any telemarketer or service 

provider to divide the costs to access 

the registry among various clients of 

that telemarketer or service provider. 

(d) Each person who pays, either directly or through another person, the 

annual fee set forth in paragraph (c) of 

this section, each person excepted

under paragraph (c) from paying the 

annual fee, and each person excepted 

from paying an annual fee under

§310.4(b)(1)(iii)(B), will be provided a

unique account number that will allow

that person to access the registry data

for the selected area codes at any time

for the twelve month period beginning

on the first day of the month in which

the person paid the fee (‘‘the annual period’’). To obtain access to additional

area codes of data during the first six

months of the annual period, each person required to pay the fee under paragraph (c) of this section must first pay

$62 for each additional area code of

data not initially selected. To obtain

access to additional area codes of data

during the second six months of the annual period, each person required to

pay the fee under paragraph (c) of this

section must first pay $31 for each additional area code of data not initially

selected. The payment of the additional fee will permit the person to access the additional area codes of data

for the remainder of the annual period.

kpayne on DSK54DXVN1OFR with $$_JOB

Attachment A(14)

010 Q:\16\16V1.TXT 31

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 33 of 34
395 

Federal Trade Commission § 311.4

(e) Access to the National Do Not

Call Registry is limited to telemarketers, sellers, others engaged in or 

causing others to engage in telephone 

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, that person also must identify 

each of the sellers on whose behalf it is 

accessing the registry, must provide 

each seller’s unique account number 

for access to the national registry, and 

must certify, under penalty of law, 

that the sellers will be using the information 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; 79 FR 51478, 

Aug. 29, 2014; 80 FR 77560, Dec. 14, 2016; 81 FR 

59845, Aug. 31, 2016; 82 FR 39534, Aug. 21, 2017] 

§ 310.9 Severability.

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. 

kpayne on DSK54DXVN1OFR with $$_JOB

Attachment A(15)

Q:\16\16V1.TXT 31

Case 2:20-cv-00547 Document 3 Filed 03/19/20 Page 34 of 34