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UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF CALIFORNIA 

UNITED STATES OF AMERICA, 

Plaintiff, 

v. 

KASM, a corporation, also d/b/a Kasm, Inc., 

KENAN AZZEH, individually and as an 

officer and owner of KASM, also d/b/a 

Kasm, Inc., 

Defendants. 

Case No. 3:23-CV-00313-BASKSC 

STIPULATED ORDER FOR 

PERMANENT INJUNCTION, 

MONETARY JUDGMENT, AND 

OTHER RELIEF 

Plaintiff, the United States of America, acting upon notification and authorization 

to the Attorney General by the Federal Trade Commission (“Commission” or “FTC”), 

filed its Complaint for a Permanent Injunction, Civil Penalties, and Other Relief 

(“Complaint”), for a permanent injunction, civil penalties, and other relief in this matter, 

pursuant to Sections 13(b), 19, and 16(a)(1) of the Federal Trade Commission Act (“FTC 

Act”), 15 U.S.C. §§ 53(b), 57b, and 56(a)(1). Defendants have waived service of the 

summons and the Complaint. Plaintiff and Defendants Kasm, also d/b/a Kasm, Inc. 

(“Kasm”), and Kenan Azzeh stipulate to the entry of this Stipulated Order for Permanent 

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Injunction, Monetary Judgment, and Other Relief (“Order”) to resolve all matters in 

dispute in this action between them. 

THEREFORE, IT IS ORDERED as follows: 

FINDINGS 

1. This Court has jurisdiction over this matter. 

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

violation of Section 5 of the FTC Act, 15 U.S.C. § 45 and the FTC’s 

Telemarketing Sales Rule (the “TSR” or “Rule”), as amended, 16 C.F.R. Part 310, 

by, among other things: (a) placing telemarketing calls to consumers that delivered 

prerecorded messages without first obtaining prior express written consent; (b) 

placing telemarketing calls to consumers without disclosing the identity of the 

seller; and (c) placing telemarketing calls to consumers after 9:00 p.m. and before 

8:00 a.m. local time without prior consent. 

3. Settling 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, 

Settling Defendants admit the facts necessary to establish jurisdiction. 

4. Settling 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. Settling Defendants and Plaintiff waive all rights to appeal or otherwise challenge 

or contest the validity of this Order. 

DEFINITIONS 

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

A. “Clear(ly) and conspicuous(ly)” means that a required disclosure is difficult to 

miss (i.e., easily noticeable) and easily understandable by ordinary consumers, 

including in all of the following ways: 

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

must be made through the same means through which the communication is 

presented. In any communication made through both visual and audible 

means, such as a television advertisement, the disclosure must be presented 

simultaneously in both the visual and audible portions of the communication 

even if the representation requiring the disclosure is made in only one 

means. 

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

appears, and other characteristics, must stand out from any accompanying 

text or other visual elements so that it is easily noticed, read, and understood. 

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

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

to easily hear and understand it. 

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

Internet or software, the disclosure must be unavoidable. 

5. The disclosure must use diction and syntax understandable to ordinary 

consumers and must appear in each language in which the representation 

that requires the disclosure appears. 

6. The disclosure must comply with these requirements in each medium 

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

communications. 

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

with, anything else in the communication. 

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

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

reasonable members of that group. 

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B. “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. 

C. “Defendants” means all of the Individual Defendants and the Corporate 

Defendants, individually, collectively, or in any combination. 

1. “Corporate Settling Defendant” means Kasm, also d/b/a Kasm, Inc., and 

its successors and assigns. 

2. “Individual Settling Defendant” means Kenan Azzeh. 

3. “Settling Defendants” means the Individual Settling Defendant and the 

Corporate Settling Defendant, individually, collectively, or in any 

combination. 

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

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

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

eighteen months immediately preceding the date of the Telemarketing call; or (b) 

the person’s inquiry or application regarding a product or service offered by the 

Seller, within the three months immediately preceding the date of a Telemarketing 

call. 

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

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

any goods or services. 

F. “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. 

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

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

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

the jurisdiction of the Commission. 

H. “Telemarketing” means any plan, program, or campaign which is conducted to 

induce the purchase of goods or services by use of one or more telephones, and 

which involves a telephone call. 

ORDER 

I. PROHIBITION AGAINST MISREPRESENTATIONS 

IT IS ORDERED that Settling Defendants, their officers, agents, employees, and 

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

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

or offering for sale any Debt Relief Service, are permanently restrained and enjoined 

from misrepresenting, expressly or by implication: 

A. The amount of time necessary to achieve the represented results; or 

B. Any other fact material to consumers concerning any good or service, such 

as: the price; total cost; any material restrictions, limitations, or conditions; 

or any material aspect of its performance, efficacy, nature, or central 

characteristics. 

II. PROHIBITION AGAINST VIOLATING THE TELEMARKETING 

SALES RULE 

IT IS FURTHER ORDERED that all Settling Defendants, their officers, agents, 

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

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

with Telemarketing are permanently restrained and enjoined from engaging in, causing 

others to engage in, or assisting others engaging in any of the following practices: 

A. Initiating any Outbound Telephone Call that delivers a prerecorded message for 

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the purpose of Telemarketing, unless the Seller has obtained from the recipient 

of the call an express agreement, in writing that: 

1. The Seller obtained only after a Clear and Conspicuous disclosure that 

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

calls to such person; 

2. The Seller obtained without requiring, directly or indirectly, that the 

agreement be executed as a condition of purchasing any good or service; 

3. 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 

4. Includes such person’s telephone number and signature. 

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

previously stated that he or she does not wish to receive an Outbound 

Telephone Call made by or on behalf of either the Seller whose goods or 

services are being offered or made by or on behalf of the charitable organization 

for which a charitable contribution is being solicited. 

C. Initiating any Outbound Telephone Call 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, without first obtaining the person’s consent for such call. 

D. Failing to disclose truthfully, promptly, and in a Clear and Conspicuous manner 

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

and the nature of the goods or services. 

E. Violating the Telemarketing Sales Rule, 16 C.F.R. Part 310, a copy of which is 

attached to this Order as Attachment A. 

III. LEAD GENERATOR REVIEW, NOTICE AND TERMINATION 

IT IS FURTHER ORDERED that: 

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

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this Order, review and determine the methods used by Settling Defendant’s 

existing Lead Generators, if any, to obtain the leads sold or offered for sale to 

Settling Defendant and, if those leads were obtained by means of an Outbound 

Telephone Call that does not comply with this Order, Settling Defendant shall 

immediately cease purchasing leads from the Lead Generator, if any, unless and 

until Settling Defendant confirms that the Lead Generator is in compliance 

pursuant to the requirements specified in Section III.B below. 

B. Prior to purchasing leads from any new Lead Generator, Settling Defendants 

shall: 

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

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

obtained by means of a telephone call that does not comply with this 

Order, Settling Defendants are prohibited from purchasing such leads; 

and 

2. For any Lead Generator reviewed pursuant to Sections III.A. or III.B.1 

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

on a quarterly basis for one (1) year to ensure continued compliance with 

this Order. 

C. Settling Defendants will immediately cease purchasing leads from any Lead 

Generator that has violated or is violating the TSR. 

IV. MONETARY JUDGMENT 

IT IS FURTHER ORDERED that: 

A. Judgment in the amount of Three Million Three Hundred and Eighty Thousand 

Dollars ($3,380,000.00) is entered in favor of Plaintiff against Individual and 

Corporate Defendants, jointly and severally, as monetary relief. 

B. Defendants are ordered to pay to the Commission Seven Thousand Five 

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Hundred Dollars ($7,500), which, as Defendants stipulate, their undersigned 

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

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

fund transfer in accordance with instructions previously provided by a 

representative of the Commission. Upon such payment, the remainder of the 

judgment is suspended, subject to the Subsections below. 

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

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

sworn financial statements and related documents (collectively, “financial 

representations”) submitted to the Commission, namely: 

1. the Financial Statement of Individual Defendant Kenan Azzeh signed 

on July 12, 2022, including the attachments; and 

2. the Financial Statement of Corporate Defendant Kasm signed by 

Kenan Azzeh, Owner/CEO, on July 12, 2022, including the 

attachments. 

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

motion by Plaintiff, 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. Settling Defendants relinquish dominion and all legal and equitable right, title, 

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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 Commission, including 

in a proceeding to enforce its rights to any payment or monetary judgment 

pursuant to this Order, such as a nondischargeability complaint in any 

bankruptcy case. 

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

action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy 

Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel 

effect for such purposes. 

I. Settling Defendants acknowledge that their Taxpayer Identification Numbers 

(Social Security Numbers or Employer Identification Numbers), which they 

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

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

7701. 

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

a fund administered by the Commission or its designee to be used for consumer 

relief, such as redress and any attendant expenses for the administration of any 

redress fund. If a representative of the Commission decides that direct redress to 

consumers is wholly or partially impracticable or money remains after redress is 

completed, the Commission may apply any remaining money for such other 

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 relief is to be deposited to the U.S. Treasury. 

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

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representatives may take pursuant to this Subsection. 

V. COOPERATION 

IT IS FURTHER ORDERED that Settling Defendants must fully cooperate with 

representatives of Plaintiff and the Commission in this case and in any investigation 

related to or associated with the transactions or the occurrences that are the subject of the 

Complaint. Settling Defendants must provide truthful and complete information, 

evidence, and testimony. Individual Settling Defendant must appear and Corporate 

Settling Defendant must cause its officers, employees, representatives, or agents to 

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

Plaintiff or Commission representative may reasonably request upon 5 days written 

notice, or other reasonable notice, at such places and times as a Plaintiff or Commission 

representative may designate, without the service of a subpoena. 

Further, to assist Plaintiff and the FTC with any investigation related to or 

associated with the transactions or the occurrences that are the subject of the Complaint, 

and with monitoring Settling Defendants’ compliance with this Order, Settling 

Defendants consent, for purposes of the Electronic Communications Privacy Act, to the 

disclosure, by electronic communications service providers and remote computing 

service providers of the contents of their autodialed, Telemarketing, or prerecorded 

telephone communications and records or other information pertaining to their 

autodialed, Telemarketing, or prerecorded telephone communications. Settling 

Defendants further agree to execute, within five days of a request from Plaintiff or the 

FTC, any forms or other documents evidencing their consent that may be required by 

such electronic communications service providers or remote computing service providers. 

VI. ORDER ACKNOWLEDGMENTS 

IT IS FURTHER ORDERED that Settling Defendants obtain acknowledgments of 

receipt of this Order: 

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

the Commission an acknowledgment of receipt of this Order sworn under 

penalty of perjury. 

B. For 3 years after entry of this Order, Individual Settling Defendant for any 

business that such Defendant, individually or collectively with any other 

Defendants, is the majority owner or controls directly or indirectly, and 

Corporate Settling Defendant, 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 and all agents and 

representatives who participate in Telemarketing; 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 Settling Defendant delivered a copy 

of this Order, that Settling Defendant must obtain, within 30 days, a signed and 

dated acknowledgment of receipt of this Order. 

VII. COMPLIANCE REPORTING 

IT IS FURTHER ORDERED that Settling Defendants make timely submissions to 

the Commission: 

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

compliance report, sworn under penalty of perjury: 

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

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

which representatives of the Commission and Plaintiff may use to 

communicate with Defendant; (b) identify all of that Defendant’s 

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businesses by all of their names, telephone numbers, and physical, postal, 

email, and Internet addresses; (c) describe the activities of each business, 

including the goods and services offered, the means of advertising, 

marketing, and sales, and the involvement of any other Defendant (which 

Individual Settling Defendants must describe if they know or should 

know due to their own involvement); (d) describe in detail whether and 

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

(e) provide a copy of each Order Acknowledgment obtained pursuant to 

this Order, unless previously submitted to the Commission. 

2. Additionally, Individual Settling Defendant must: (a) identify all 

telephone numbers and all physical, postal, email and Internet addresses, 

including all residences; (b) identify all business activities, including any 

business for which such Defendant performs services whether as an 

employee or otherwise and any entity in which such Defendant has any 

ownership interest; and (c) describe in detail such Defendant’s 

involvement in each such business, including title, role, responsibilities, 

participation, authority, control, and any ownership. 

B. For 10 years after entry of this Order, each Settling Defendant must submit a 

compliance notice, sworn under penalty of perjury, within 14 days of any 

change in the following: 

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

point of contact; or (b) the structure of any Corporate Settling Defendant 

or any entity that Defendant has any ownership interest in or controls 

directly or indirectly that may affect compliance obligations arising under 

this Order, including: creation, merger, sale, or dissolution of the entity 

or any subsidiary, parent, or affiliate that engages in any acts or practices 

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subject to this Order. 

2. Additionally, Individual Settling Defendant must report any change in: 

(a) name, including aliases or fictitious name, or residence address; or (b) 

title or role in any business activity, including any business for which 

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 Settling Defendant must submit to the Commission notice of the filing of 

any bankruptcy petition, insolvency proceeding, or similar proceeding by or 

against such Defendant within 14 days of its filing. 

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

penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, 

such as by concluding: “I declare under penalty of perjury under the laws of the 

United States of America that the foregoing is true and correct. Executed on: 

_____” and supplying the date, signatory’s full name, title (if applicable), and 

signature. 

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

submissions to the Commission pursuant to this Order must be emailed to 

DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to: 

Associate Director for Enforcement, Bureau of Consumer Protection, Federal 

Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. 

The subject line must begin: FTC v. Kasm, also d/b/a Kasm, Inc., No. 2023189. 

VIII. RECORDKEEPING 

IT IS FURTHER ORDERED that Settling Defendants must create certain records 

for 10 years after entry of the Order, and retain each such record for 5 years. 

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Specifically, Corporate Settling Defendant and Individual Settling 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. 

IX. COMPLIANCE MONITORING 

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

Defendants’ compliance with this Order and any failure to transfer any assets as required 

by this Order: 

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

Commission or Plaintiff, each Settling Defendant must: submit additional 

compliance reports or other requested information, which must be sworn under 

penalty of perjury; appear for depositions; and produce documents for 

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

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

prescribed by Federal Rules of Civil Procedure 29, 30 (including telephonic 

depositions), 31, 33, 34, 36, 45, and 69. 

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

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_______________________________ 

to communicate directly with each Settling Defendant. Defendant must permit 

representatives of the Commission and Plaintiff 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 Commission and Plaintiff may use all other lawful means, including 

posing, through its representatives as consumers, suppliers, or other individuals 

or entities, to Defendants or any individual or entity affiliated with Defendants, 

without the necessity of identification or prior notice. Nothing in this Order 

limits the Commission’s lawful use of compulsory process, pursuant to Sections 

9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1. 

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

consumer reporting agency must furnish consumer reports concerning 

Individual Settling Defendants, pursuant to Section 604(1) of the Fair Credit 

Reporting Act, 15 U.S.C. § 1681b(a)(1). 

X. RETENTION OF JURISDICTION 

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

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

SO ORDERED this day of , 2023. 

UNITED STATES DISTRICT JUDGE 

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SO STIPULATED AND AGREED:

FOR PLAINTIFF:

THE UNITED STATES OF AMERICA

BRIAN M. BOYNTON

Principal Deputy Assistant Attorney General

AMANDA M. LISKAMM

Director, Consumer Protection Branch

LISA K. HSIAO

Assistant Director

DANIEL K. CRANE-HIRSCH

Senior Trial Attorney

s/ Matthew A. Robinson

MATTHEW A. ROBINSON

ZACHARY A. DIETERT

Trial Attorneys

Civil Division, U.S. Department of Justice

450 5th Street, NW, Suite 6400-South

Washington, DC 20044-0386

Tel.: (202) 305-4342 (Robinson)

(202) 616-9027 (Dietert)

(202) 646-8242 (Crane-Hirsch)

Fax: (202) 514-8742

Email: Matthew.A.Robinson@usdoj.gov

Zachary.A.Dietert@usdoj.gov

Daniel.Crane-Hirsch@usdoj.gov

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FEDERAL TRADE COMMISSION

Christopher E. Brown, Attorney 

Suzanne Barth, Attorney

Federal Trade Commission

600 Pennsylvania Ave., NW

Mailstop CC-5201 

Washington, DC 20580 

202-326-2825 / cbrown3@ftc.gov 

202-326-3317 / sbarth@ftc.gov

FOR DEFENDANTS:

__________________ Date: 09/13/22

William P. Cole

Amin Talati Wasserman, LLP

515 South Flower St.,

18th Floor

Los Angeles, CA 90071

213-985-7206 / william@amintalati.com

Counsel for Kasm and Kenan Azzeh 

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AZZEH, INDIVIDUALLY 

AND AS AN OFFICER OF KASM 

Date: ~ 

DEFENDANTS: Kenan Azzeh and Kasm 1

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28 23cv00313 
PART 310-TELEMARKETING SALES 

RULE 16 CFR PART 310 

Sec. 

310.1 Scope of regulations in this part. 

310.2 Definitions. 

310.3 Deceptive telemarketing acts or practices. 

310.4 Abusive telemarketing acts or practices. 

310.5 Recordkeeping requirements. 

310.6 Exemptions. 

310.7 Actions by states and private persons. 

310.8 Fee for access to the National Do Not 

Call Registry. 

310.9 Severability. 

AUTHORITY: 15 U.S.C. 6101-6108. 

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

otherwise noted. 

§ 310-1 Scope of regulations in this 

part. 

This part implements the Telemarketing and Consumer Fraud and 

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

6108, as amended. 

§ 310.2 Definitions. 

(a) Acquir er 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 au thorize 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. 

380 

Attachment A 
Federal Trade Commission 

(b) Attorney General means the chief 

legal officer of a state. 

(c) Billing i nformation 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) Charitable contribution means any 

donation or gift of money or any other 

thing of value. 

(g) Commission means the Federal 

Trade Commission. 

(h) Credit means the right granted by 

a creditor to a debtor to defer payment 

of debt or to incur debt and defer its 

payment. 

(i) 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. 

(j) Credit card sales draft means any 

record or evidence of a credit card 

transaction . 

(k) 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. 

(l) Customer means any person who is 

or may be required to pay for goods or 

services offered through telemarketing. 

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

by implication, to renegotiate, settle, 

or in any way alter t he 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. 

§310.2 

(n) Donor means any person solicited 

to make a charitable contribution. 

( o) 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 eight- een (18) months immediately preceding 

the date of a t elemarketing call; or 

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

m onths immediately preceding the 

date of a telemarketing call. 

(p) 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 a nd will incur an obligation to 

pay for t he product or service if he or 

she does not take affirmative action to 

cancel before the end of that period. 

(q) 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. 

(r) Material means likely to affect a 

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

contribution. 

(s) Merchant means a person who is 

authorized under a writ ten 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 

chari table contribution. 

(t) 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. 

(u) Negative option feature means, in 

an offer or agreemen t 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. 

381 

Attachment A 
§310.3 

(v) 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. 

(w) Person means any individual, 

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

(x) ?reacquired 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. 

(y) 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 fs guaranteed to receive an item and, at the t ime of the 

offer or purported offer, the telemarketer does not identify the specific 

item that the person will receive. 

(z) 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. (aa) 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. 

(bb) 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. 

(cc) Telemarketer means any person 

who, in connection with telemarketing, 

initiates or receives telephone calls to 

or from a customer or donor. 

(dd) 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 

t hrough the mailing of a catalog 

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

which: contains a written description 

or illustration of t he 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 cus- tomers 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 cust omer with 

information about, or attempting to 

sell, any other item included in the same catalog which prompted the cus- tomer's call or in a substantially similar catalog. 

(ee) 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 t he initial transaction. An 

"external upsell" is a solicitation 

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

transaction, regardless of whether the 

initial transaction and t)le 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 

pay 659 for goods or services offered, 

659 When a seller or telemarketer uses, or 

directs a customer to use, a courier to trans- port payment, the seller or telemarketer 

must make the disclosures required by 

§310.3(a)(l) 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 

382 

Attachment A 
Federal Trade Commission 

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 repur chases, 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 tollfree 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; 

the case of debt relief services, the seller or telemarketer must make the disclosures required by § 310.3(a)(l) 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)(l)(i) of this Rule. 

§310.3 

(vii) If the offer includes a negative 

option feature, all material terms and 

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

fact that the customer's account will 

·be charged unless the customer takes 

an affirmative action to avoid the 

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

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

avoid the charge(s); and 

(viii) In the sale of any debt relief 

service: 

(A) the amount of time necessary to 

achieve the represented results, and to 

the extent that the service may include 

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

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

(B) to the extent that the service 

may include a settlement offer to any 

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

percentage of each outstanding debt 

that the customer must accumulate before the debt relief service provider 

will make a bona fide settlement offer 

to each of them; 

(C) to the extent that any aspect of 

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

timely payments to creditors or debt 

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

the customer's creditworthiness, may 

result in the customer being subject to 

collections or sued by creditors or debt 

collectors, and may increase the 

amount of money the customer owes 

due to the accrual of fees and interest; 

and 

(D) to the extent that the debt relief 

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

an insured financial institution, that 

the customer owns the funds held in 

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 

383 

Attachment A 
§310.3 

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, t he 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 patential, or profitability; 

(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 negat ive 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 t he charge(s), the date(s) t he 

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 a ny 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 

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

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 t he 

Tru th in Lending Act and Regulation 

Z,661 or a debit card subject to the protections of the Electronic Fund Trans- fer 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 

t he 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 t hat are the subject of the 

telemarketing transaction and the customer's or donor's receipt of a ll of the 

following information: 

(A) The number of debits, charges, or 

payments (if more than one); 

(B) The date(s) t he debit(s), 

charge(s), or payment(s) will be submitted for payment; 

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 digi tal form of signature, to the extent that 

such form of signature is recognized as a valid signature under a pplicable federal law 

or state contract law. 

384 

Attachment A 
Federal Trade Commission 

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

charge(s), or payment(s); 

(D) The customer's or donor's name; 

(E) 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; 

(F) A telephone number for customer 

or donor inquiry that is answered during normal business hours; and 

(G) 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 

§310.3 

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

draft generated by a telemarketing 

transaction that is not the result of a 

telemarketing credit card transaction 

between the cardholder and the merchant; 

(2) Any person to employ, solicit, or 

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

merchant, to present to or deposit into 

the credit card system for payment, a 

credit card sales draft generated by a 

telemarketing transaction that is not 

the result of a telemarketing credit 

card transaction between the cardholder and the merchant; or 

(3) Any person to obtain access to the 

credit card system through the use of a 

business relationship or an affiliation 

with a merchant, when such access is 

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

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

solicitation, a deceptive telemarketing 

act or practice, and a violation of this 

Rule for any telemarketer soliciting 

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

the following material information: 

(1) The nature, purpose, or mission of 

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

(2) That any charitable contribution 

is tax deductible in whole or in part; 

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

(4) The percentage or amount of any 

charitable contribution that will go to 

a charitable organization or to any 

particular charitable program; 

(5) Any material aspect of a prize 

promotion including, but not limited 

to: the odds of being able to receive a 

prize; the nature or value of a prize; or 

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

in a prize promotion; or 

(6) A charitable organization's or 

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

385 

Attachment A 
§310.4 

§ 310.4 Abusive telemarketing acts or practices. 

(a) Abusive conduct generally. It is an 

abusive telemarketing act or practice 

and a violation of this Rule for any 

seller or telemarketer to engage in the 

following conduct: 

(1) Threats, intimidation, or the use 

of profane or obscene language; 

(2) Requesting or receiving payment 

of any fee or consideration for goods or 

services represented to remove derogatory information from, or improve, a person's credit history, credit record, 

or credit rating until: 

(i) The time frame in which the seller 

has represented all of the goods or 

services will be provided to that person 

has expired; and 

(ii) The seller has provided the person 

with documentation in the form of a 

consumer report from a consumer re- porting 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 telemarketing 

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 tele- marketer 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 a t least one 

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

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 t he 

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: 

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

the terms of the entire debt balance as 

the individual debt amount bears to 

the entire debt amount. The individual 

debt amount and the entire debt 

amount are those owed at the time the 

debt was enrolled in the service; or (2) Is a percentage of the amount 

saved as a result of the renegotiation, 

settlement, reduction, or alteration. 

The percentage charged cannot change 

from one individual debt to another. 

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

debt was enrolled in the service and the 

amount actually paid to satisfy the 

debt. 

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

requesting or requiring the customer 

to place funds in an account to be used 

for the debt relief provider's fees and 

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

alteration of the t erms 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 wit h, 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 ser vice; and 

(E) The customer may withdraw from 

the debt rel ief service at any time 

without penalt y, and must receive all 

386 

Attachment A 
Federal Trade Commission 

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 transacti on 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 bis 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 re- cording of the en tire telemarketing 

transaction. 

(ii) In any other telemarketing transaction involving preacquired account 

information not described in paragraph 

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

telemarketer must: 

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

specificity for the customer or donor to 

understand what account will be 

charged; and 

(B) Obtain from the customer or 

donor his or her express agreement to 

§310.4 

be charged for the goods or services 

and to be charged using the accou nt 

number identified pursuant to para- graph (a)(7)(ii)(A) of this section; or 

(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 identificat ion service in use by a recipient of a 

telemarketing call; provided that it 

shall not be a violation to substitu te 

(for the name and phone number used 

in, or billed for, making t he 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. 

(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 teleph one calls established to 

comply with §310.4(b)(l )(iii); 

(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 ou tbound telephone call made by or 

on behalf of the seller whose goods or services are being offered or made on 

behalf of the charitable organization 

for which a charitable contribution is 

being solicited; or 

(B) That person's telephone number 

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

who do not wish to receive outbound 

telephone calls to induce the purchase 

of goods or services unless the seller: 

(i) Has obtained the express agreement, in writing, of such person to 

place calls to that person. Such written 

agreement shall clearly evidence such 

387 

Attachment A 
§310.4 

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 

(ii) 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)(l)(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 

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 Jaw or state contract law. 

""5 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 Jaw or state contract Jaw. 

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

induce a charitable contribution from a 

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

behalf the call is made, the seller or 

telemarketer: 

(i) Allows the telephone to ring for at 

least fifteen (15) seconds or four (4) 

rings before disconnecting an unanswered call; and 

(ii) Within two (2) seconds after the 

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 t hat 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)(l)(iii)(A) at any time during 

t he message. The mechanism must: 

(1) Aut omatically 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)(l )(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 t he duration of t he telemarketing 

campaign; and 

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

federal and state laws. 

(C) Any call t hat complies with all 

applicable requirements of- this paragraph (v) shall not be deemed to violate 

§310.4(b)(l )(iv) of this part. 

388 

Attachment A 
Federal Trade Commission 

(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)(l)(iii)(A), or 

maintained by the Commission pursuant to §310.4(b)(l)(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)(l)(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)(l)(ii) and (iii); 

(ii) It has trained its personnel, and 

any entity assisting in its compliance, 

in the procedures established pursuant 

to §310.4(b)(3)(i); 

(iii) The seller, or a telemarketer or 

another person acting on behalf of the 

seller or charitable organization, has 

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

organization may not contact, in com- pliance with § 310.4(b)(l)(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)(l)(iii)(B), employing a version 

of the " do-not-call " registry obtained 

from the Commission no more than 

thirty-one (31) days prior to t he 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 § 310.4(b)(l)(ii) or (iii) is the 

result of error. 

(4) A seller or telemarketer will not 

·be liable for violating § 310,4(b)(l)(iv) if: 

§310.4 

(i) The seller or telemarketer em- ploys technology that ensures abandonment of no more t han 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 per- son 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 ac- cordance 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 violat ion of this Rule for a telemarketer in ·an outbound telephone call or 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 

666 This provision does not affect any sell- er's or telemarketer's obligation to comply 

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

227, and 47 CFR part 64.1200. 

389 

Attachment A 
§310.5 

participate in a prize promotion if a 

prize promotion is offered and that any 

purchase or payment will not increase 

t he person's chances of winning. This 

disclosure must be made before or in 

conjunction with the description of t he 

prize to the person called. If requested 

by that person, the telemarketer must 

disclose the no-purchase/no-payment 

entry met hod 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 t he initial telemarketing transaction. 

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

an outbound telephone call to induce a 

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

clear and conspicuous manner to the 

person receiving the call, the following 

information: 

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

(2) That the purpose of the call is to 

solicit a charitable contribution. 

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

FR 58716, Sept. 22, 2011) 

§ 310.5 Recordkeeping requirements. 

(a) Any seller or telemarketer shall 

keep, for a period of 24 months from 

the date t he record is produced, the following records relating to its telemarketing activi ties: (1) All substantially different adver- tising, brochures, telemarketing 

scripts, and promotional materials; 

(2) The name and last known address 

of each prize recipient and the prize 

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

have a value of $25.00 or more; 

(3) The name and last known address 

of each customer, the goods or services 

purchased, the date such goods or serv- ices were shipped or provided, and the 

amount paid by t he customer for the 

goods or services;667 

667 For offers of consumer credit products 

subject to the Truth in Lendin g Act, 15 

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

(4) The name, any fictitious name 

used, the last known home a ddress 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 t o 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 a ny form, and in the same manner, 

format, or place as they keep such 

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

of this Rule. 

(c) The seller and the telemarketer 

calling on behalf of t he 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 t he 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)(l )-(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 r ecords as required under this 

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

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

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 compli- ance with §310.5(a)(3) of this Rule. 

390 

Attachment A 
Federal Trade Commission 

§ 310.6 Exemptions. 

(a) Solicitations to induce charitable 

contributions via outbound telephone 

calls are not covered by 

§ 310.4(b)(l)(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 308, provided, however, that this 

exemption does not apply to the requirements of §§310.4(a)(l), (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 '·'Disclo- sure Requirements and Prohibitions 

Concerning Business Opportunities,'' 

("Business Opport unity Rule") 16 CFR 

part 437, provided, however, that this 

exemption does not apply to the requirements of §§310.4(a)(l), (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)(l), (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 t o calls initiated by a customer 

or donor in response to an advertisem ent relating to investmen t opportunities, debt relief services, business op- portunities other than business arrangements covered by the Franchise 

§310.7 

Rule or Business Opportunity Rule, or 

advertisements involving goods or 

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

310.4(a)(2)-(4); or to 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)(l) of this Rule, 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) of this 

Rule for any requested charitable contribution; provided, however, that this 

exemption does not apply to 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)(l)(vi) or 

310.4(a)(2)-(4); or to any instances of 

upselling included in such telephone 

calls; and 

(7) Telephone calls between a telemarketer and any business, except 

calls to induce the retail sale of nondurable office or cleaning supplies; prbvided, however, that § 310.4(b)(l )(iii)(B) 

and §310.5 of this Rule shall not apply 

to sellers or telem arketers of nondurable office or cleaning supplies. 

§ 310.7 Actions by states and private 

persons. 

(a) Any a ttorney 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 

391 

Attachment A 
§310.8 

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 main tained by the Commission under §310.4(b)(l)(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)(l)(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)(l)(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 

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

access to t he National Do Not Call 

Registry, is $59 for each area code of 

data accessed, up to a maximum of 

$16,228; provided, however, that there 

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

and provided further, that there shall be no charge to any person engaging in or 

causing others to engage in outbound 

telephone calls to consumers and who 

is accessing area codes of data in the 

National Do Not Call Registry if the 

person is permitted to access, but is 

not required to access, the National Do 

Not Call Registry under this Rule, 47 

CFR 64.1200, or any other Federal regulation or law. Any person accessing the 

National Do Not Call Registry may not 

participate in any arrangement to 

share the cost of accessing the 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 § 310.8(c), each 

person excepted under §310.8(c) from 

paying the annual fee, and each person 

excepted from paying an annual fee 

under § 310.4(b)(l)(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 §310.8(c) must first pay $59 

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 §310.B(c) must first pay $30 

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 

392 

Attachment A 
Federal Trade Commission 

calls to consumers, service providers 

acting on behalf of such persons, and 

any government agency that has law 

enforcement authority. Prior to accessing the Nationa l 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 pre- vent telephone calls to telephone numbers on the registry. If the person is accessing the registry on behalf of sellers, t hat person also must identify 

each of the sellers on whose behalf it is 

accessing the registry, must provide 

each seller's unique account number for access to the national registry, and 

must certify, under penalty of law, 

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

solely to comply with the provisions of 

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

the registry. 

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

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

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

§ 310.9 Se verability. 

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

any provision is stayed or determined 

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

shall continue in effect. 

§311.4 

393 

Attachment A