Page 1 of 17

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Civil Action No. 1:20-cv-00641-STV 

FEDERAL TRADE COMMISSION, 

Plaintiff,

v. 

BOOSTMYSCORE LLC, formerly known as Boost My Score dot Net, LLC, and also doing 

business as BoostMyScore.net, 

BMS, INC., also doing business as BoostMyScore.NET, and

WILLIAM O. AIRY, individually and as an officer of BoostMyScore LLC and BMS, Inc., 

Defendants, 

STIPULATION TO ENTER FINAL ORDER FOR PERMANENT INJUNCTION AND 

EQUITABLE MONETARY JUDGMENT

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

Injunction, and Other Equitable Relief in this matter, pursuant to Sections 13(b) and 19 of the 

FTC Act, 15 U.S.C. §§ 53(b) and 57b, Section 410(b) of the Credit Repair Organizations Act 

(“CROA”), 15 U.S.C. § 1679h(b), and Section 6(b) of the Telemarketing and Consumer Fraud 

and Abuse Prevention Act, 15 U.S.C. § 6105(b). Defendants have waived service of the 

summons and the Complaint. The FTC and Defendants, by and through their undersigned 

counsel, stipulate to the entry of this Stipulated Final Order for Permanent Injunction and 

Monetary Judgment (“Order”) to resolve all matters in dispute in this action between them. 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 1 of 54
Page 2 of 17

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 Section 5 of the FTC Act, 15 U.S.C. § 45, multiple provisions of CROA, 15 

U.S.C. §§ 1679-1679j, and multiple provisions of the FTC’s Telemarketing Sales Rule 

(“TSR”), 16 C.F.R. Part 310, in connection with the marketing and sale of credit repair 

services. 

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 waive all rights to appeal or otherwise challenge or contest the validity of this 

Order.

6. Entry of this Order is in the public interest.

DEFINITIONS

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

A. “Credit Repair Service” means any service, in return for payment of money or other 

consideration, for the express or implied purpose of: (1) improving any consumer’s 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 2 of 54
Page 3 of 17

credit report, credit record, credit history, credit profile, credit score, or credit rating; or 

(2) providing advice or assistance to any consumer with regard to any activity or service 

the purpose of which is to improve any consumer’s credit report, credit record, credit 

history, credit profile, credit score, or credit rating. 

B. “Defendants” means all of the Individual Defendant and the Corporate Defendants, 

individually, collectively, or in any combination. “Corporate Defendants” means

BoostMyScore LLC formerly known as Boost My Score dot Net, LLC and also doing 

business as BoostMyScore.net, BMS, Inc. also doing business as BoostMyScore.net, and 

their successors and assigns. “Individual Defendant” means William O. Airy. 

C. “Person” means any individual, group, unincorporated association, limited or general 

partnership, corporation, or other business entity. 

ORDER

PROHIBITION ON COLLECTION OF ADVANCE FEES

I IT IS THEREFORE ORDERED that Defendants, Defendants’ officers, agents, and 

employees, and all other Persons in active concert or participation with them, who receive 

actual notice of this Order by personal service or otherwise, whether acting directly or 

indirectly, in connection with the advertising, marketing, promoting, or offering for sale of 

any Credit Repair Service, are hereby permanently restrained and enjoined from charging or 

receiving any money or other consideration for the performance of any Credit Repair Service

before such Credit Repair Service is fully performed. 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 3 of 54
Page 4 of 17

PROVISION REGARDING THE SALE OF TRADELINES

II IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, and 

employees, and all other Persons in active concert or participation with them, who receive 

actual notice of this Order by personal service or otherwise, whether acting directly or 

indirectly, are hereby permanently restrained and enjoined from advertising, marketing, 

promoting, brokering, offering for sale, or selling, or assisting in the advertising, marketing, 

promoting, brokering, offering for sale, or selling, of any Credit Repair Service that adds, 

attempts to add, or advises or directs others to add, any Person as an authorized user to any 

other Person’s credit card account or other line of credit unless the Person to be added is 

given access to such credit.

PROVISIONS REGARDING THE MARKETING OF CREDIT REPAIR SERVICES

III. IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, and 

employees, and all other persons in active concert or participation with them, who receive 

actual notice of this Order by personal service or otherwise, whether acting directly or 

indirectly, in connection with the advertising, marketing, promoting, or offering for sale of 

any Credit Repair Service, are permanently restrained and enjoined from: 

A. Misrepresenting or assisting others in misrepresenting, expressly or by implication: 

1. That any Person will add any Person as an additional authorized user to any other 

Person’s credit card or line of credit account;

2. That any Person can substantially improve any Person’s credit score or credit rating;

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 4 of 54
Page 5 of 17

3. That any Person is an additional authorized user on any other Person’s credit card or 

line of credit account; 

4. That any Credit Repair Service will help any Person obtain a mortgage or other 

extension of credit; 

5. That any Person can remove negative information or hard inquiries from any Person’s 

credit report, credit record, credit history, credit profile; or 

6. Any other fact material to consumers concerning any Credit Repair Service, such as 

the total costs; any material restrictions, limitations, or conditions; or any material 

aspect of its performance, efficacy, nature, or central characteristics; 

B. Engaging in any act, practice, or course of business that constitutes or results in the 

commission of, or an attempt to commit, a fraud or deception on any Person in 

connection with the offer or sale of the Credit Repair Service;

C. Failing to provide any Person with a written statement of “Consumer Credit File Rights 

Under State and Federal Law,” in the form and manner required by Section 405(a) of 

CROA, 15 U.S.C. § 1679c(a); 

D. Failing to include in contracts for any Credit Repair Service a conspicuous statement in 

bold face type, in immediate proximity to the space reserved for the consumer’s signature 

on the contract, regarding the consumer’s right to cancel the contracts without penalty or 

obligation at any time before the third business day after the date on which consumers 

signed the contracts, in the form and manner required by Section 406(b)(4) of CROA, 15 

U.S.C. § 1679d(b)(4); and

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 5 of 54
Page 6 of 17

E. Failing to provide any Person with a separate form with the heading “Notice of 

Cancellation,” in the form and manner required by Section 407(b) of CROA, 15 U.S.C. § 

1679e(b); and 

F. Violating CROA, 15 U.S.C. §§ 1679-1679j, a copy of which is attached as Attachment A. 

PROHIBITED DECEPTIVE BUSINESS ACTIVITIES REGARDING 

ANY PRODUCTS OR SERVICES

IV. IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, and 

employees, and all other Persons in active concert or participation with any of them, who 

receive actual notice of this Order, whether acting directly or indirectly, in connection with 

the advertising, marketing, promoting, or offering for sale of any product or service, are

permanently restrained and enjoined from: 

A. Misrepresenting or assisting others in misrepresenting, expressly or by implication: 

1. That such product or service is legal or otherwise protected by any federal or state 

statute or rule; 

2. The terms of any refund, cancellation, exchange, or repurchase policy, or the 

circumstances under which a full or partial refund will be granted or denied; or 

3. Any other fact material to Persons concerning any product or service, such as the total 

costs; any material restrictions, limitations, or conditions; or any material aspect of its 

performance, efficacy, nature, or central characteristics; 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 6 of 54
Page 7 of 17

B. Failing to disclose clearly and conspicuously the terms of any refund, cancellation, 

exchange, or repurchase policy, or the circumstances under which a full or partial refund 

will be granted or denied. 

PROHIBITION AGAINST UNSUBSTANTIATED CLAIMS

V IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, and 

employees, and all other Persons in active concert or participation with any of them, who 

receive actual notice of this Order, whether acting directly or indirectly, in connection with 

the advertising, marketing, promoting, or offering for sale of any product or service, are

permanently restrained and enjoined from making any representation or assisting others in 

making any representation, expressly or by implication, about the benefits, performance, or

efficacy of any product or service, unless the representation is non-misleading, and, at the 

time such representation is made, Defendants possess and rely upon competent and reliable 

evidence that is sufficient in quality and quantity based on standards generally accepted in 

the relevant field, when considered in light of the entire body of relevant and reliable 

evidence, to substantiate that the representation is true. 

INJUNCTION RELATING TO TELEMARKETING

VI. IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, and 

employees, and all other Persons in active concert or participation with any of them, who 

receive actual notice of this Order, whether acting directly or indirectly, in connection with 

telemarketing, advertising, marketing, promoting, offering for sale, or selling of any product 

or service, are hereby permanently restrained and enjoined from:

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 7 of 54
Page 8 of 17

A. Misrepresenting, directly or by implication, in the sale of goods or services any material 

aspect of the performance, efficacy, nature, or central characteristics of goods or services 

that are the subject of a sales offer; and

B. Violating the FTC’s Telemarketing Sales Rule, 16 C.F.R. Part 310, a copy of which is 

attached as Attachment B.

MONETARY JUDGMENT

VII IT IS FURTHER ORDERED that: 

A. Judgment in the amount of SIX MILLION, SIX HUNDRED THIRTY THOUSAND, 

SIX HUNDRED AND SEVENTY EIGHT DOLLARS ($6,630,678) is entered in favor 

of the FTC against Defendants, jointly and severally, as equitable monetary relief. 

B. Defendants are ordered to pay to the FTC SIXTY FOUR THOUSAND EIGHT 

HUNDRED SIXTY THREE DOLLARS ($64,863), which, as Defendants stipulate, their 

undersigned counsel holds in escrow for no purpose other than payment to the FTC. 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 FTC. 

Ninety-one days after the completion of such payment, the remainder of the judgment is 

suspended, subject to the Subsections below. 

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

upon the truthfulness, accuracy, and completeness of Defendants’ sworn financial 

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

the FTC, namely: (1) the Financial Statement of Corporate Defendant BMS, Inc. signed 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 8 of 54
Page 9 of 17

by William Airy, CEO on November 15, 2019, including the attachments; and (2) the 

Financial Statement of Individual Defendant William Airy signed on November 15, 

2019, including the attachments. 

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

FTC, the Court finds that Defendant failed to disclose any material asset, materially 

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

the financial representations identified above. 

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

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

only for purposes of this Section represents the consumer injury alleged in the 

Complaint), less any payment previously made pursuant to this Section, plus interest 

computed from the date of entry of this Order. 

F. 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. 

G. 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 FTC, including in a proceeding to 

enforce its rights to any payment or monetary judgment pursuant to this Section, such as 

a nondischargeability complaint in any bankruptcy case. 

H. The facts alleged in the Complaint establish all elements necessary to sustain an action by 

the FTC 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.

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 9 of 54
Page 10 of 17

I. Defendants acknowledge that their Taxpayer Identification Numbers (Social Security 

Numbers or Employer Identification Numbers) may be used for collecting and reporting 

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

J. All money paid to the FTC pursuant to this Section may be deposited into a fund 

administered by the FTC 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 FTC decides that direct redress to consumers is wholly or 

partially impracticable or money remains after redress is completed, the FTC 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 FTC or 

its representatives may take pursuant to this Subsection. 

CUSTOMER INFORMATION

VIII IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, and 

employees, and all other Persons in active concert or participation with any of them, who 

receive actual notice of this Order, are permanently restrained and enjoined from directly or 

indirectly: 

A. Failing to provide sufficient customer information to enable the FTC to efficiently 

administer consumer redress. If a representative of the FTC requests in writing any 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 10 of 54
Page 11 of 17

information related to redress, Defendants must provide it, in the form prescribed by the 

FTC, within 14 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 in connection with the marketing or sale of any Credit Repair Service. 

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

control within the earlier of:

1. 30 days after receipt of written direction to do so from a representative of the 

FTC, or 

2. one year after entry of this Order. 

D. 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. 

ORDER ACKNOWLEDGMENTS

IX 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 FTC an 

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

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 11 of 54
Page 12 of 17

B. For 5 years after entry of this Order, the Individual Defendant for any business that such 

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

or controls directly or indirectly, and each of the Corporate Defendants, must deliver a 

copy of this Order to: (1) all principals, officers, directors, and LLC managers and 

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

COMPLIANCE REPORTING

X IT IS FURTHER ORDERED that Defendants make timely submissions to the FTC:

A. One year 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 FTC 

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 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 12 of 54
Page 13 of 17

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 Defendants must describe if 

he knows or should know due to his own involvement); (d) describe in detail whether 

and how that Defendant is in compliance with each Section of this Order; and (e) 

provide a copy of each Order Acknowledgment obtained pursuant to this Order, 

unless previously submitted to the FTC. 

2. Additionally, the 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 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 20 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 the Corporate Defendants 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 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 13 of 54
Page 14 of 17

of the entity or any subsidiary, parent, or affiliate that engages in any acts or practices 

subject to this Order. 

2. Additionally, the Individual Defendant must report any change in: (a) name, 

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

business activity, including any business for which 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 FTC 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 FTC 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 an FTC representative in writing, all submissions to the 

FTC 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, 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 14 of 54
Page 15 of 17

Washington, DC 20580. The subject line must begin: FTC v. BoostMyScore LLC, 

Matter No. 192-3059. 

RECORDKEEPING

XI IT IS FURTHER ORDERED that Defendants must create certain records for 20 years after 

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

Defendants and the 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.

COMPLIANCE MONITORING

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

with this Order, including any failure to transfer any assets as required by this Order:

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 15 of 54
Page 16 of 17

A. Within 14 days of receipt of a written request from a representative of the FTC, 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 FTC 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 FTC are authorized to communicate directly with 

each Defendant. Defendants must permit representatives of the FTC 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.

C. The FTC may use all other lawful means, including posing, through their 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 FTC’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 FTC, any consumer reporting agency 

must furnish consumer reports concerning the Individual Defendant, pursuant to Section 

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

RETENTION OF JURISDICTION

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

of construction, modification, and enforcement of this Order. 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 16 of 54
Page 17 of 17

IT IS SO STIPULATED: 

DANIEL DEAN DWYER 

GREGORY A. ASHE

Federal Trade Commission

600 Pennsylvania Avenue NW 

Washington, DC 20850 

Telephone: 202-326-2957 (Dwyer) 

Telephone: 202-326-3719 (Ashe)

Facsimile: 202-326-3768 

Email: ddwyer@ftc.gov, gashe@ftc.gov

Attorneys for Federal Trade Commission 

WILLIAM O. AIRY, Defendant

HENRY M. BURGOYNE III

Burgoyne Law Group 

1390 Market Street, Suite 200 

San Francisco, CA 94102 

Telephone: 415-795-4070 

Facsimile: 415-680-2335 

Email: hank@burgoynelawgroup.com

Attorney for Defendants

s/ Daniel Dean Dwyer s/ William O. Airy

BOOSTMYSCORE LLC., Defendant

By: William O. Airy, its authorized

representative 

s/ William O. Airy

BMS, INC., Defendant 

By: William O. Airy, its authorized

representative 

s/ William O. Airy

s/ Henry M. Burgoyne III

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 17 of 54
UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

I hereby certify that on March 9, 2020, I electronically filed the foregoing with the Clerk of 

Court using the CM/ECF system, which will send notification to all parties of interest 

participating in the CM/ECF system,

and I hereby certify that I have mailed or served the document or paper to the following nonCM/ECF participant in the manner (mail, hand-delivery, etc.) indicated by the non-participant’s 

name: 

by email: Henry M. Burgoyne III, Esq. (hank@burgoynelawgroup.com)

Attorney for Defendants BoostMyScore LLC, 

BMS, Inc., & William O. Airy.

/s/ Daniel Dean Dwyer

Daniel Dean Dwyer

Federal Trade Commission

600 Pennsylvania Ave. NW,

Mail Stop CC-10232

Washington, DC 20580

Telephone: (202) 326-2957

FAX: (202) 326-3768

E-mail: ddwyer@ftc.gov

Attorney for Plaintiff Federal Trade Commission

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 18 of 54
ATTACHMENT A

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 19 of 54
15 U.S.C. 

United States Code, 2018 Edition

Title 15 - COMMERCE AND TRADE

CHAPTER 41 - CONSUMER CREDIT PROTECTION

SUBCHAPTER II-A - CREDIT REPAIR ORGANIZATIONS

From the U.S. Government Publishing Office, www.gpo.gov

SUBCHAPTER II–A—CREDIT REPAIR ORGANIZATIONS

§1679. Findings and purposes

(a) Findings

The Congress makes the following findings: 

(1) Consumers have a vital interest in establishing and maintaining their credit worthiness and 

credit standing in order to obtain and use credit. As a result, consumers who have experienced 

credit problems may seek assistance from credit repair organizations which offer to improve the 

credit standing of such consumers. 

(2) Certain advertising and business practices of some companies engaged in the business of 

credit repair services have worked a financial hardship upon consumers, particularly those of 

limited economic means and who are inexperienced in credit matters.

(b) Purposes

The purposes of this subchapter are— 

(1) to ensure that prospective buyers of the services of credit repair organizations are provided 

with the information necessary to make an informed decision regarding the purchase of such 

services; and

(2) to protect the public from unfair or deceptive advertising and business practices by credit 

repair organizations. 

(Pub. L. 90–321, title IV, §402, as added Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 1996, 

110 Stat. 3009–455.) 

Prior Provisions

A prior title IV of Pub. L. 90–321, May 29, 1968, 82 Stat. 164, as amended by Pub. L. 91–344, 

July 20, 1970, 84 Stat. 440; Pub. L. 92–321, June 30, 1972, 86 Stat. 382, which was set out as a 

note under section 1601 of this title, established a bipartisan National Commission on Consumer 

Finance to study the functioning and structure of the consumer finance industry as well as 

consumer credit transactions generally. The Commission was to submit a final report by Dec. 31, 

1972, and was to cease to exist thereafter.

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 20 of 54
Effective Date

Pub. L. 90–321, title IV, §413, as added by Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 

1996, 110 Stat. 3009–462, provided that: "This title [enacting this subchapter] shall apply after 

the end of the 6-month period beginning on the date of the enactment of the Credit Repair 

Organizations Act [Sept. 30, 1996], except with respect to contracts entered into by a credit 

repair organization before the end of such period." 

Short Title

This subchapter known as the "Credit Repair Organizations Act", see Short Title note set out 

under section 1601 of this title. 

§1679a. Definitions 

For purposes of this subchapter, the following definitions apply: 

(1) Consumer

The term "consumer" means an individual. 

(2) Consumer credit transaction

The term "consumer credit transaction" means any transaction in which credit is offered or 

extended to an individual for personal, family, or household purposes. 

(3) Credit repair organization 

The term "credit repair organization"— 

(A) means any person who uses any instrumentality of interstate commerce or the mails to sell, 

provide, or perform (or represent that such person can or will sell, provide, or perform) any 

service, in return for the payment of money or other valuable consideration, for the express or 

implied purpose of— 

(i) improving any consumer's credit record, credit history, or credit rating; or 

(ii) providing advice or assistance to any consumer with regard to any activity or service 

described in clause (i); and

(B) does not include— 

(i) any nonprofit organization which is exempt from taxation under section 501(c)(3) of title 26; 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 21 of 54
(ii) any creditor (as defined in section 1602 of this title), with respect to any consumer, to the 

extent the creditor is assisting the consumer to restructure any debt owed by the consumer to the 

creditor; or 

(iii) any depository institution (as that term is defined in section 1813 of title 12) or any Federal 

or State credit union (as those terms are defined in section 1752 of title 12), or any affiliate or 

subsidiary of such a depository institution or credit union. 

(4) Credit

The term "credit" has the meaning given to such term in section 1602(e) 1 of this title.

(Pub. L. 90–321, title IV, §403, as added Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 1996, 

110 Stat. 3009–455.) 

References in Text

Section 1602(e) of this title, referred to in par. (4), was redesignated section 1602(f) of this title 

by Pub. L. 111–203, title X, §1100A(1)(A), July 21, 2010, 124 Stat. 2107. 

Prior Provisions 

For a prior section 403 of Pub. L. 90–321, see note set out under section 1679 of this title. 

Effective Date

Section applicable after the end of the 6-month period beginning on Sept. 30, 1996, except with 

respect to contracts entered into by a credit repair organization before the end of such period, see 

section 413 of Pub. L. 90–321, as added by Pub. L. 104–208, set out as a note under section 1679 

of this title.

1 See References in Text note below.

§1679b. Prohibited practices

(a) In general

No person may— 

(1) make any statement, or counsel or advise any consumer to make any statement, which is 

untrue or misleading (or which, upon the exercise of reasonable care, should be known by the 

credit repair organization, officer, employee, agent, or other person to be untrue or misleading) 

with respect to any consumer's credit worthiness, credit standing, or credit capacity to— 

(A) any consumer reporting agency (as defined in section 1681a(f) of this title); or 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 22 of 54

-
(B) any person— 

(i) who has extended credit to the consumer; or 

(ii) to whom the consumer has applied or is applying for an extension of credit; 

(2) make any statement, or counsel or advise any consumer to make any statement, the intended 

effect of which is to alter the consumer's identification to prevent the display of the consumer's 

credit record, history, or rating for the purpose of concealing adverse information that is accurate 

and not obsolete to— 

(A) any consumer reporting agency; 

(B) any person— 

(i) who has extended credit to the consumer; or 

(ii) to whom the consumer has applied or is applying for an extension of credit; 

(3) make or use any untrue or misleading representation of the services of the credit repair 

organization; or 

(4) engage, directly or indirectly, in any act, practice, or course of business that constitutes or 

results in the commission of, or an attempt to commit, a fraud or deception on any person in 

connection with the offer or sale of the services of the credit repair organization. 

(b) Payment in advance

No credit repair organization may charge or receive any money or other valuable consideration 

for the performance of any service which the credit repair organization has agreed to perform for 

any consumer before such service is fully performed. 

(Pub. L. 90–321, title IV, §404, as added Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 1996, 

110 Stat. 3009–456.) 

Prior Provisions

For a prior section 404 of Pub. L. 90–321, see note set out under section 1679 of this title. 

Effective Date

Section applicable after the end of the 6-month period beginning on Sept. 30, 1996, except with 

respect to contracts entered into by a credit repair organization before the end of such period, see 

section 413 of Pub. L. 90–321, as added by Pub. L. 104–208, set out as a note under section 1679 

of this title.

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 23 of 54
§1679c. Disclosures

(a) Disclosure required

Any credit repair organization shall provide any consumer with the following written statement 

before any contract or agreement between the consumer and the credit repair organization is 

executed:

"Consumer Credit File Rights Under State and Federal Law

"You have a right to dispute inaccurate information in your credit report by contacting the credit 

bureau directly. However, neither you nor any 'credit repair' company or credit repair 

organization has the right to have accurate, current, and verifiable information removed from 

your credit report. The credit bureau must remove accurate, negative information from your 

report only if it is over 7 years old. Bankruptcy information can be reported for 10 years. 

"You have a right to obtain a copy of your credit report from a credit bureau. You may be 

charged a reasonable fee. There is no fee, however, if you have been turned down for credit, 

employment, insurance, or a rental dwelling because of information in your credit report within 

the preceding 60 days. The credit bureau must provide someone to help you interpret the 

information in your credit file. You are entitled to receive a free copy of your credit report if you 

are unemployed and intend to apply for employment in the next 60 days, if you are a recipient of 

public welfare assistance, or if you have reason to believe that there is inaccurate information in 

your credit report due to fraud. 

"You have a right to sue a credit repair organization that violates the Credit Repair Organization 

Act. This law prohibits deceptive practices by credit repair organizations. 

"You have the right to cancel your contract with any credit repair organization for any reason 

within 3 business days from the date you signed it. 

"Credit bureaus are required to follow reasonable procedures to ensure that the information they 

report is accurate. However, mistakes may occur. 

"You may, on your own, notify a credit bureau in writing that you dispute the accuracy of 

information in your credit file. The credit bureau must then reinvestigate and modify or remove 

inaccurate or incomplete information. The credit bureau may not charge any fee for this service. 

Any pertinent information and copies of all documents you have concerning an error should be 

given to the credit bureau. 

"If the credit bureau's reinvestigation does not resolve the dispute to your satisfaction, you may 

send a brief statement to the credit bureau, to be kept in your file, explaining why you think the 

record is inaccurate. The credit bureau must include a summary of your statement about disputed 

information with any report it issues about you. 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 24 of 54
"The Federal Trade Commission regulates credit bureaus and credit repair organizations. For 

more information contact: 

"The Public Reference Branch

"Federal Trade Commission

"Washington, D.C. 20580".

(b) Separate statement requirement

The written statement required under this section shall be provided as a document which is 

separate from any written contract or other agreement between the credit repair organization and 

the consumer or any other written material provided to the consumer. 

(c) Retention of compliance records

(1) In general

The credit repair organization shall maintain a copy of the statement signed by the consumer 

acknowledging receipt of the statement.

(2) Maintenance for 2 years

The copy of any consumer's statement shall be maintained in the organization's files for 2 years 

after the date on which the statement is signed by the consumer.

(Pub. L. 90–321, title IV, §405, as added Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 1996, 

110 Stat. 3009–457.) 

References in Text

The Credit Repair Organization Act, referred to in subsec. (a), probably means the Credit Repair 

Organizations Act, Pub. L. 90–321, title IV, as added Pub. L. 104–208, div. A, title II, §2451, 

Sept. 30, 1996, 110 Stat. 3009–454, which is classified generally to this subchapter. For 

complete classification of this Act to the Code, see Short Title note set out under section 1601 of 

this title and Tables.

Prior Provisions

For a prior section 405 of Pub. L. 90–321, see note set out under section 1679 of this title. 

Effective Date

Section applicable after the end of the 6-month period beginning on Sept. 30, 1996, except with 

respect to contracts entered into by a credit repair organization before the end of such period, see 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 25 of 54
section 413 of Pub. L. 90–321, as added by Pub. L. 104–208, set out as a note under section 1679 

of this title.

§1679d. Credit repair organizations contracts

(a) Written contracts required

No services may be provided by any credit repair organization for any consumer— 

(1) unless a written and dated contract (for the purchase of such services) which meets the 

requirements of subsection (b) has been signed by the consumer; or 

(2) before the end of the 3-business-day period beginning on the date the contract is signed. 

(b) Terms and conditions of contract

No contract referred to in subsection (a) meets the requirements of this subsection unless such 

contract includes (in writing)— 

(1) the terms and conditions of payment, including the total amount of all payments to be made 

by the consumer to the credit repair organization or to any other person; 

(2) a full and detailed description of the services to be performed by the credit repair 

organization for the consumer, including— 

(A) all guarantees of performance; and

(B) an estimate of— 

(i) the date by which the performance of the services (to be performed by the credit repair 

organization or any other person) will be complete; or 

(ii) the length of the period necessary to perform such services; 

(3) the credit repair organization's name and principal business address; and 

(4) a conspicuous statement in bold face type, in immediate proximity to the space reserved for 

the consumer's signature on the contract, which reads as follows: "You may cancel this contract 

without penalty or obligation at any time before midnight of the 3rd business day after the date 

on which you signed the contract. See the attached notice of cancellation form for an explanation 

of this right.".

(Pub. L. 90–321, title IV, §406, as added Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 1996, 

110 Stat. 3009–458.) 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 26 of 54
Prior Provisions

For a prior section 406 of Pub. L. 90–321, see note set out under section 1679 of this title.

Effective Date

Section applicable after the end of the 6-month period beginning on Sept. 30, 1996, except with 

respect to contracts entered into by a credit repair organization before the end of such period, see 

section 413 of Pub. L. 90–321, as added by Pub. L. 104–208, set out as a note under section 1679 

of this title.

§1679e. Right to cancel contract

(a) In general

Any consumer may cancel any contract with any credit repair organization without penalty or 

obligation by notifying the credit repair organization of the consumer's intention to do so at any 

time before midnight of the 3rd business day which begins after the date on which the contract or 

agreement between the consumer and the credit repair organization is executed or would, but for 

this subsection, become enforceable against the parties. 

(b) Cancellation form and other information 

Each contract shall be accompanied by a form, in duplicate, which has the heading "Notice of 

Cancellation" and contains in bold face type the following statement:

"You may cancel this contract, without any penalty or obligation, at any time before midnight of 

the 3rd day which begins after the date the contract is signed by you. 

"To cancel this contract, mail or deliver a signed, dated copy of this cancellation notice, or any 

other written notice to [ name of credit repair organization ] at [ address of credit repair 

organization ] before midnight on [ date ] 

"I hereby cancel this transaction,

[ date ] 

[ purchaser's signature ].". 

(c) Consumer copy of contract required

Any consumer who enters into any contract with any credit repair organization shall be given, by 

the organization— 

(1) a copy of the completed contract and the disclosure statement required under section 1679c 

of this title; and

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 27 of 54
(2) a copy of any other document the credit repair organization requires the consumer to sign, at 

the time the contract or the other document is signed. 

(Pub. L. 90–321, title IV, §407, as added Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 1996, 

110 Stat. 3009–459.) 

Prior Provisions

For a prior section 407 of Pub. L. 90–321, see note set out under section 1679 of this title. 

Effective Date

Section applicable after the end of the 6-month period beginning on Sept. 30, 1996, except with 

respect to contracts entered into by a credit repair organization before the end of such period, see 

section 413 of Pub. L. 90–321, as added by Pub. L. 104–208, set out as a note under section 1679 

of this title.

§1679f. Noncompliance with this subchapter

(a) Consumer waivers invalid

Any waiver by any consumer of any protection provided by or any right of the consumer under 

this subchapter— 

(1) shall be treated as void; and 

(2) may not be enforced by any Federal or State court or any other person. 

(b) Attempt to obtain waiver 

Any attempt by any person to obtain a waiver from any consumer of any protection provided by 

or any right of the consumer under this subchapter shall be treated as a violation of this 

subchapter. 

(c) Contracts not in compliance

Any contract for services which does not comply with the applicable provisions of this 

subchapter— 

(1) shall be treated as void; and 

(2) may not be enforced by any Federal or State court or any other person. 

(Pub. L. 90–321, title IV, §408, as added Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 1996, 

110 Stat. 3009–459.) 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 28 of 54
Effective Date

Section applicable after the end of the 6-month period beginning on Sept. 30, 1996, except with 

respect to contracts entered into by a credit repair organization before the end of such period, see 

section 413 of Pub. L. 90–321, as added by Pub. L. 104–208, set out as a note under section 1679 

of this title.

§1679g. Civil liability

(a) Liability established

Any person who fails to comply with any provision of this subchapter with respect to any other 

person shall be liable to such person in an amount equal to the sum of the amounts determined 

under each of the following paragraphs: 

(1) Actual damages 

The greater of— 

(A) the amount of any actual damage sustained by such person as a result of such failure; or 

(B) any amount paid by the person to the credit repair organization. 

(2) Punitive damages 

(A) Individual actions

In the case of any action by an individual, such additional amount as the court may allow. 

(B) Class actions

In the case of a class action, the sum of— 

(i) the aggregate of the amount which the court may allow for each named plaintiff; and 

(ii) the aggregate of the amount which the court may allow for each other class member, without 

regard to any minimum individual recovery. 

(3) Attorneys' fees

In the case of any successful action to enforce any liability under paragraph (1) or (2), the costs 

of the action, together with reasonable attorneys' fees. 

(b) Factors to be considered in awarding punitive damages

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 29 of 54
In determining the amount of any liability of any credit repair organization under subsection 

(a)(2), the court shall consider, among other relevant factors— 

(1) the frequency and persistence of noncompliance by the credit repair organization; 

(2) the nature of the noncompliance;

(3) the extent to which such noncompliance was intentional; and 

(4) in the case of any class action, the number of consumers adversely affected.

(Pub. L. 90–321, title IV, §409, as added Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 1996, 

110 Stat. 3009–459.) 

Effective Date

Section applicable after the end of the 6-month period beginning on Sept. 30, 1996, except with 

respect to contracts entered into by a credit repair organization before the end of such period, see 

section 413 of Pub. L. 90–321, as added by Pub. L. 104–208, set out as a note under section 1679 

of this title.

§1679h. Administrative enforcement

(a) In general

Compliance with the requirements imposed under this subchapter with respect to credit repair 

organizations shall be enforced under the Federal Trade Commission Act [15 U.S.C. 41 et seq.] 

by the Federal Trade Commission.

(b) Violations of this subchapter treated as violations of Federal Trade Commission Act 

(1) In general

For the purpose of the exercise by the Federal Trade Commission of the Commission's functions 

and powers under the Federal Trade Commission Act [15 U.S.C. 41 et seq.], any violation of any 

requirement or prohibition imposed under this subchapter with respect to credit repair 

organizations shall constitute an unfair or deceptive act or practice in commerce in violation of 

section 5(a) of the Federal Trade Commission Act [15 U.S.C. 45(a)]. 

(2) Enforcement authority under other law

All functions and powers of the Federal Trade Commission under the Federal Trade Commission 

Act shall be available to the Commission to enforce compliance with this subchapter by any 

person subject to enforcement by the Federal Trade Commission pursuant to this subsection, 

including the power to enforce the provisions of this subchapter in the same manner as if the 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 30 of 54
violation had been a violation of any Federal Trade Commission trade regulation rule, without 

regard to whether the credit repair organization— 

(A) is engaged in commerce; or

(B) meets any other jurisdictional tests in the Federal Trade Commission Act.

(c) State action for violations 

(1) Authority of States

In addition to such other remedies as are provided under State law, whenever the chief law 

enforcement officer of a State, or an official or agency designated by a State, has reason to 

believe that any person has violated or is violating this subchapter, the State— 

(A) may bring an action to enjoin such violation; 

(B) may bring an action on behalf of its residents to recover damages for which the person is 

liable to such residents under section 1679g of this title as a result of the violation; and 

(C) in the case of any successful action under subparagraph (A) or (B), shall be awarded the 

costs of the action and reasonable attorney fees as determined by the court.

(2) Rights of Commission 

(A) Notice to Commission

The State shall serve prior written notice of any civil action under paragraph (1) upon the Federal 

Trade Commission and provide the Commission with a copy of its complaint, except in any case 

where such prior notice is not feasible, in which case the State shall serve such notice 

immediately upon instituting such action.

(B) Intervention

The Commission shall have the right— 

(i) to intervene in any action referred to in subparagraph (A); 

(ii) upon so intervening, to be heard on all matters arising in the action; and 

(iii) to file petitions for appeal.

(3) Investigatory powers 

For purposes of bringing any action under this subsection, nothing in this subsection shall 

prevent the chief law enforcement officer, or an official or agency designated by a State, from 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 31 of 54
exercising the powers conferred on the chief law enforcement officer or such official by the laws 

of such State to conduct investigations or to administer oaths or affirmations or to compel the 

attendance of witnesses or the production of documentary and other evidence. 

(4) Limitation

Whenever the Federal Trade Commission has instituted a civil action for violation of this 

subchapter, no State may, during the pendency of such action, bring an action under this section 

against any defendant named in the complaint of the Commission for any violation of this 

subchapter that is alleged in that complaint.

(Pub. L. 90–321, title IV, §410, as added Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 1996, 

110 Stat. 3009–460.) 

References in Text

The Federal Trade Commission Act, referred to in subsecs. (a) and (b), is act Sept. 26, 1914, ch. 

311, 38 Stat. 717, as amended, which is classified generally to subchapter I (§41 et seq.) of 

chapter 2 of this title. For complete classification of this Act to the Code, see section 58 of this 

title and Tables.

Effective Date

Section applicable after the end of the 6-month period beginning on Sept. 30, 1996, except with 

respect to contracts entered into by a credit repair organization before the end of such period, see 

section 413 of Pub. L. 90–321, as added by Pub. L. 104–208, set out as a note under section 1679 

of this title.

§1679i. Statute of limitations

Any action to enforce any liability under this subchapter may be brought before the later of— 

(1) the end of the 5-year period beginning on the date of the occurrence of the violation involved; 

or 

(2) in any case in which any credit repair organization has materially and willfully 

misrepresented any information which— 

(A) the credit repair organization is required, by any provision of this subchapter, to disclose to 

any consumer; and

(B) is material to the establishment of the credit repair organization's liability to the consumer 

under this subchapter, 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 32 of 54
the end of the 5-year period beginning on the date of the discovery by the consumer of the 

misrepresentation.

(Pub. L. 90–321, title IV, §411, as added Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 1996, 

110 Stat. 3009–461.) 

Effective Date

Section applicable after the end of the 6-month period beginning on Sept. 30, 1996, except with 

respect to contracts entered into by a credit repair organization before the end of such period, see 

section 413 of Pub. L. 90–321, as added by Pub. L. 104–208, set out as a note under section 1679 

of this title.

§1679j. Relation to State law

This subchapter shall not annul, alter, affect, or exempt any person subject to the provisions of 

this subchapter from complying with any law of any State except to the extent that such law is 

inconsistent with any provision of this subchapter, and then only to the extent of the 

inconsistency. 

(Pub. L. 90–321, title IV, §412, as added Pub. L. 104–208, div. A, title II, §2451, Sept. 30, 1996, 

110 Stat. 3009–462.) 

Effective Date

Section applicable after the end of the 6-month period beginning on Sept. 30, 1996, except with 

respect to contracts entered into by a credit repair organization before the end of such period, see 

section 413 of Pub. L. 90–321, as added by Pub. L. 104–208, set out as a note under section 1679 

of this title.

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 33 of 54
ATTACHMENT B

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 34 of 54
Title 16: Commercial Practices 

PART 310—TELEMARKETING SALES RULE 16 CFR 

PART 310

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 Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 

U.S.C. 6101-6108, as amended.

§310.2 Definitions.

(a) Acquirer means a business organization, financial institution, or an agent of a business 

organization or financial institution that has authority from an organization that operates or 

licenses a credit card system to authorize merchants to accept, transmit, or process payment by 

credit card through the credit card system for money, goods or services, or anything else of 

value.

(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 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 35 of 54
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 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 generaluse 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. 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 36 of 54
(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 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. 

(z) Preacquired account information means any information that enables a seller or telemarketer 

to cause a charge to be placed against a customer's or donor's account without obtaining the 

account number directly from the customer or donor during the telemarketing transaction 

pursuant to which the account will be charged. 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 37 of 54
(aa) Prize means anything offered, or purportedly offered, and given, or purportedly given, to a 

person by chance. For purposes of this definition, chance exists if a person is guaranteed to 

receive an item and, at the time of the offer or purported offer, the telemarketer does not identify 

the specific item that the person will receive.

(bb) Prize promotion means:

(1) A sweepstakes or other game of chance; or

(2) An oral or written express or implied representation that a person has won, has been selected 

to receive, or may be eligible to receive a prize or purported prize. 

(cc) Remotely created payment order means any payment instruction or order drawn on a 

person's account that is created by the payee or the payee's agent and deposited into or cleared 

through the check clearing system. The term includes, without limitation, a “remotely created 

check,” as defined in Regulation CC, Availability of Funds and Collection of Checks, 12 CFR 

229.2(fff), but does not include a payment order cleared through an Automated Clearinghouse 

(ACH) Network or subject to the Truth in Lending Act, 15 U.S.C. 1601 et seq., and Regulation 

Z, 12 CFR part 1026. 

(dd) Seller means any person who, in connection with a telemarketing transaction, provides, 

offers to provide, or arranges for others to provide goods or services to the customer in exchange 

for consideration. 

(ee) State means any state of the United States, the District of Columbia, Puerto Rico, the 

Northern Mariana Islands, and any territory or possession of the United States. 

(ff) Telemarketer means any person who, in connection with telemarketing, initiates or receives 

telephone calls to or from a customer or donor. 

(gg) Telemarketing means a plan, program, or campaign which is conducted to induce the 

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

which involves more than one interstate telephone call. 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 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 38 of 54
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.

§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: 

(1) Before a customer consents to pay659 for goods or services offered, failing to disclose 

truthfully, in a clear and conspicuous manner, the following material information: 

(i) The total costs to purchase, receive, or use, and the quantity of, any goods or services that are 

the subject of the sales offer;660

(ii) All material restrictions, limitations, or conditions to purchase, receive, or use the goods or 

services that are the subject of the sales offer;

(iii) If the seller has a policy of not making refunds, cancellations, exchanges, or repurchases, a 

statement informing the customer that this is the seller's policy; or, if the seller or telemarketer 

makes a representation about a refund, cancellation, exchange, or repurchase policy, a statement 

of all material terms and conditions of such policy; 

(iv) In any prize promotion, the odds of being able to receive the prize, and, if the odds are not 

calculable in advance, the factors used in calculating the odds; that no purchase or payment is 

required to win a prize or to participate in a prize promotion and that any purchase or payment 

will not increase the person's chances of winning; and the no-purchase/no-payment method of 

participating in the prize promotion with either instructions on how to participate or an address 

or local or toll-free telephone number to which customers may write or call for information on 

how to participate;

(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

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 39 of 54
(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 the account, 

the customer may withdraw from the debt relief service at any time without penalty, and, if the 

customer withdraws, the customer 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). 

(2) Misrepresenting, directly or by implication, in the sale of goods or services any of the 

following material information:

(i) The total costs to purchase, receive, or use, and the quantity of, any goods or services that are 

the subject of a sales offer;

(ii) Any material restriction, limitation, or condition to purchase, receive, or use goods or 

services that are the subject of a sales offer;

(iii) Any material aspect of the performance, efficacy, nature, or central characteristics of goods 

or services that are the subject of a sales offer;

(iv) Any material aspect of the nature or terms of the seller's refund, cancellation, exchange, or 

repurchase policies;

(v) 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 purchase or payment is required to win 

a prize or to participate in a prize promotion; 

(vi) Any material aspect of an investment opportunity including, but not limited to, risk, 

liquidity, earnings potential, or profitability; 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 40 of 54
(vii) A seller's or telemarketer's affiliation with, or endorsement or sponsorship by, any person or 

government entity;

(viii) That any customer needs offered goods or services to provide protections a customer 

already has pursuant to 15 U.S.C. 1643; 

(ix) Any material aspect of a 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); or 

(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 donor's authorization of payment for the goods or 

services or charitable contribution that are the subject of the telemarketing transaction and the 

customer's or donor's receipt of all of the following information: 

(A) An accurate description, clearly and conspicuously stated, of the goods or services or 

charitable contribution for which payment authorization is sought; 

(B) The number of debits, charges, or payments (if more than one); 

(C) The date(s) the debit(s), charge(s), or payment(s) will be submitted for payment; 

(D) The amount(s) of the debit(s), charge(s), or payment(s);

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 41 of 54
(E) The customer's or donor's name; 

(F) The customer's or donor's billing information, identified with sufficient specificity such that 

the customer or donor understands what account will be used to collect payment for the goods or 

services or charitable contribution that are the subject of the telemarketing transaction;

(G) A telephone number for customer or donor inquiry that is answered during normal business 

hours; and 

(H) The date of the customer's or donor's oral authorization; or 

(iii) Written confirmation of the transaction, identified in a clear and conspicuous manner as such 

on the outside of the envelope, sent to the customer or donor via first class mail prior to the 

submission for payment of the customer's or donor's billing information, and that includes all of 

the information contained in §§310.3(a)(3)(ii)(A)-(G) and a clear and conspicuous statement of 

the procedures by which the customer or donor can obtain a refund from the seller or 

telemarketer or charitable organization in the event the confirmation is inaccurate; provided, 

however, that this means of authorization shall not be deemed verifiable in instances in which 

goods or services are offered in a transaction involving a free-to-pay conversion and preacquired 

account information. 

(4) Making a false or misleading statement to induce any person to pay for goods or services or 

to induce a charitable contribution. 

(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.

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 42 of 54
(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.

 

659 When a seller or telemarketer uses, or directs a customer to use, a courier to transport payment, the seller or 

telemarketer must make the disclosures required by §310.3(a)(1) before sending a courier to pick up payment or 

authorization for payment, or directing a customer to have a courier pick up payment or authorization for payment. 

In the case of debt relief services, the seller or telemarketer must make the disclosures required by §310.3(a)(1) 

before the consumer enrolls in an offered program.

660 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 disclosure requirements under the Truth in Lending Act and 

Regulation Z shall constitute compliance with §310.3(a)(1)(i) of this Rule.

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.

§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; 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 43 of 54
(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 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. 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 44 of 54
(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: 

(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 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.

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 45 of 54
(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-to-cash 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 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 46 of 54
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 signature664 of that 

person; or 

(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 non-profit 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 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 47 of 54
(ii) Within two (2) seconds after the completed greeting of the person called, plays a prerecorded 

message that promptly provides the disclosures required by §310.4(d) or (e), followed 

immediately by a disclosure of one or both of the following: 

(A) In the case of a call that could be answered in person by a consumer, that the person called 

can use an automated interactive voice and/or keypress-activated opt-out mechanism to assert a 

Do Not Call request pursuant to §310.4(b)(1)(iii)(A) at any time during the message. The 

mechanism must:

(1) Automatically add the number called to the seller's entity-specific Do Not Call list;

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

(3) Be available for use at any time during the message; and

(B) In the case of a call that could be answered by an answering machine or voicemail service, 

that the person called can use a toll-free telephone number to assert a Do Not Call request 

pursuant to §310.4(b)(1)(iii)(A). The number provided must connect directly to an automated 

interactive voice or keypress-activated opt-out mechanism that:

(1) Automatically adds the number called to the seller's entity-specific Do Not Call list;

(2) Immediately thereafter disconnects the call; and

(3) Is accessible at any time throughout the duration of the telemarketing campaign; and

(iii) Complies with all other requirements of this part and other applicable federal and state laws.

(C) Any call that complies with all applicable requirements of this paragraph (v) shall not be 

deemed to violate §310.4(b)(1)(iv) of this part. 

(D) This paragraph (v) shall not apply to any outbound telephone call that delivers a prerecorded 

healthcare message made by, or on behalf of, a covered entity or its business associate, as those 

terms are defined in the HIPAA Privacy Rule, 45 CFR 160.103. 

(2) It is an abusive telemarketing act or practice and a violation of this Rule for any person to 

sell, rent, lease, purchase, or use any list established to comply with §310.4(b)(1)(iii)(A), or 

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);

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 48 of 54
(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-day period or portion 

thereof that the campaign continues.

(ii) The seller or telemarketer, for each telemarketing call placed, allows the telephone to ring for 

at least fifteen (15) seconds or four (4) rings before disconnecting an unanswered call; 

(iii) Whenever a sales representative is not available to speak with the person answering the call 

within two (2) seconds after the person's completed greeting, the seller or telemarketer promptly 

plays a recorded message that states the name and telephone number of the seller on whose 

behalf the call was placed666; and

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

compliance with §310.4(b)(4)(i)-(iii).

(c) Calling time restrictions. Without the prior consent of a person, it is an abusive telemarketing 

act or practice and a violation of this Rule for a telemarketer to engage in outbound telephone 

calls to a person's residence at any time other than between 8:00 a.m. and 9:00 p.m. local time at 

the called person's location. 

(d) Required oral disclosures in the sale of goods or services. It is an abusive telemarketing act 

or practice and a violation of this Rule for a telemarketer in an outbound telephone call or 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 49 of 54
internal or external upsell to induce the purchase of goods or services 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 seller; 

(2) That the purpose of the call is to sell goods or services; 

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

(4) That no purchase or payment is necessary to be able to win a prize or participate in a prize 

promotion if a prize promotion is offered and that any purchase or payment will not increase the 

person's chances of winning. This disclosure must be made before or in conjunction with the 

description of the prize to the person called. If requested 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.

 

664 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.

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.

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.

§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;

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 50 of 54
(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.

 

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.

§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:

(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 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 51 of 54
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 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 52 of 54
(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.

§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 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 $65 for each area code of data accessed, up to a maximum of $17,765; 

provided, however, that there shall be no charge to any person for accessing the first five area 

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 53 of 54
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 $65 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 $32 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. 

(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.

§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.

Case 1:20-cv-00641-STV Document 6 Filed 03/09/20 USDC Colorado Page 54 of 54