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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 1 of 32 Page ID #:299 

NOTE: CHANGES MADE BY THE COURT 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

United States of America, 

Plaintiff, 

vs. 

XCast Labs, Inc., 

Defendant. 

Case No. 23-cv-03646-ODW(JCx) 

STIPULATED ORDER FOR 

PERMANENT INJUNCTION, 

CIVIL PENALTY 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 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), 16(a), and 19 of the Federal 

Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b), 56(a), and 57b. Defendant 

has waived service of the summons and the Complaint. Plaintiff and Defendant 

hereby stipulate to the entry of this Stipulated Order for Permanent Injunction, Civil 

Penalty Judgment, and Other Relief to resolve all matters in dispute in this action 

between them. 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 2 of 32 Page ID #:300 

THEREFORE, IT IS ORDERED as follows: 

FINDINGS 

1. This Court has jurisdiction over the matter. 

2. The Complaint charges that Defendant participated in deceptive and 

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 (“TSR”), as amended, 16 C.F.R. Pt. 310, 

by assisting and facilitating: (a) placing telemarketing calls to consumers that 

delivered prerecorded messages without first obtaining prior express written 

consent; (b) placing telemarketing calls to consumers whose telephone numbers 

were on the National Do Not Call (“DNC”) Registry; (c) placing telemarketing calls 

to consumers without disclosing the identity of the seller; (d) placing telemarketing 

calls that misrepresented seller or telemarketers’ affiliations or sponsorships; (e) 

placing telemarketing calls that that delivered false or misleading statements to 

induce purchases; and (f) placing telemarketing calls that did not transmit accurate 

called identification information. 

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

Complaint, except as specifically stated in this Order. Only for purposes of this 

action, Defendant admits the facts necessary to establish jurisdiction. 

4. Defendant waives any claim that it may have under the Equal Access 

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

the date of this Order, and agrees to bear its own costs and attorney fees. 

5. Defendant and Plaintiff waive all rights to appeal or otherwise 

challenge or contest the validity of this Order. 

DEFINITIONS 

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

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 3 of 32 Page ID #:301 

A. “Assisting” includes, among other conduct, providing or reselling 

Voice over Internet Protocol (“VoIP”) telephony services and providing or licensing 

telephone numbers. 

B. “Customer” means any Person for which Defendant provides VoIP 

telephony or wholesale SIP termination, including origination, termination, routing, 

or transmission. 

C. “Defendant” means XCast Labs, Inc. and its successors and assigns. 

D. “High-Risk Customer” means any Customer that engages in 

Telemarketing or any Person domiciled outside of the United States. 

E. “Invalid Number” means any caller ID number that is invalid under 

the North American Numbering Plan (“NANP”), including, for example, any 

number that does not contain the requisite number of digits. 

F. “IPPBX Services” means an internet protocol private branch 

exchange, defined as a communication system designed for internal use within a 

company enabling employees to communicate with each other via telephone. 

G. “Person” means any individual, group, unincorporated association, 

limited or general partnership, corporation, or other business entity. 

H. “Subscription Account Number” means the identification number 

provided by the Commission to persons with access to the National Do Not Call 

Registry. 

I. “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. 

J. “Traceback Request” means any request from: 

1) A telecommunications carrier or voice service provider; 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 4 of 32 Page ID #:302 

2) A consortium that collects privately led efforts to trace back the 

origin of suspected unlawful robocalls, as contemplated under 

Section 13 of the TRACED Act; or 

3) Any other industry organization comprised of 

telecommunications carriers and/or voice service providers that 

seek to combat and reduce unlawful “robocalls” 

to disclose information in order to protect the rights or property of such 

entity, or to protect users of telecommunications and voice services and 

others from fraudulent, abusive, or unlawful use of, or subscription to, 

telecommunications services. 

K. “Unassigned Number” means any caller ID number for which the 

administrator of NANP has never opened: 

1) The NPA area code for carrier number assignments; or 

2) The NPA-NXX central office code for carrier number 

assignments. 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 5 of 32 Page ID #:303 

ORDER 

I. PROHIBITION ON VIOLATING THE TELEMARKETING SALES 

RULE 

IT IS ORDERED that Defendant, its 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 violating the Telemarketing Sales Rule, 

16 C.F.R. Part 310, a copy of which is attached to this Order as Appendix A. 

II. PERMANENT BAN ON ASSISTING AND FACILITATING HIGHRISK CUSTOMERS 

IT IS FURTHER ORDERED that Defendant, whether acting directly or 

indirectly, is permanently restrained and enjoined from providing substantial 

assistance or support to any High-Risk Customer that Defendant knows, or should 

know, is engaged in: 

A. Initiating, causing the initiation of, or transmitting Telemarketing calls 

that (1) deliver prerecorded messages or (2) are placed to numbers on the DNC 

Registry; or 

B. Initiating, causing the initiation of, or transmitting any telephone call 

displaying a caller ID number that the calling party does not have the legal authority 

to use. 

III. PERMANENT BAN ON CERTAIN TELEPHONE CALLS 

IT IS FURTHER ORDERED that Defendant, whether acting directly or 

through an intermediary, is permanently restrained and enjoined from providing 

interconnected VoIP telephony services or provisioning or assigning telephone 

numbers without having ongoing automated procedures in place to block calls that: 

A. Display as the caller ID number any Unassigned Number or Invalid 

Number; 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 6 of 32 Page ID #:304 

B. Are not authenticated through the Federal Communications 

Commission STIR/SHAKEN Authentication Framework, or a successor 

authentication framework if subsequently mandated by applicable federal law or 

regulation. 

IV. SCREENING OF CURRENT AND PROSPECTIVE CUSTOMERS 

IT IS FURTHER ORDERED that Defendant, its 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, are 

permanently restrained and enjoined from providing VoIP telephony services, 

wholesale SIP termination, or telephone numbers to any new or prospective 

Customer without first engaging in a reasonable screening of that Customer. For new 

or prospective Customers, such reasonable screening must occur and be completed 

before beginning to provide services to the new Customer. For existing Customers, 

such review must begin and be completed within 60 days of entry of this Order. For 

all Customers, such reasonable screening must recur annually. Such reasonable 

screening must include, but is not limited to: 

A. Obtaining from each prospective Customer or current Customer 

(including the principal(s) and controlling Person(s) with a majority interest in the 

entity, and any alter egos, corporate DBA names, trade names, fictitious names, or 

aliases under which such Person(s) conduct or have conducted the business) the 

following information: 

1) A description of the nature of the Customer’s business, including 

a description of the nature of the goods and services sold, 

methods of sale, and whether it is involved in Telemarketing; 

2) For Customers who engage in Telemarketing: 

a) The prospective Customer’s Subscription Account 

Number for accessing the DNC Registry, and asking the 

Customer whether it uses prerecorded messages; 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 7 of 32 Page ID #:305 

b) A list of all caller ID numbers and callback numbers the 

Customer will use, substantiated by proof that the 

Customer has authorization to use each such phone 

number; 

3) For Customers who describe their business as involving the 

resale or offering of VoIP telephony services, the resale or 

licensing of telephone numbers, or any other 

telecommunications or information services, obtaining the 

Customer’s Universal Service Fund registration number and a 

copy of the Customer’s FCC Form 499 or FCC Form 214; 

4) The name of the principal(s) and controlling Person(s) of the 

entity, and Person(s) with a majority ownership interest in the 

entity; 

5) The name of the entity’s employee responsible for compliance 

with the Telemarketing Sales Rule and other state and federal 

laws governing Telemarketing and automated dialing; 

6) A list of all business and trade names, fictitious names, DBAs, 

and Internet websites under or through which the Customer has 

transacted business; 

7) Each physical address at which the prospective Customer has 

conducted business or will conduct the business(es) identified 

pursuant to subsection (1) of this Section IV.A; 

8) The billing address and email address associated with the 

Customer’s means and source of payment for Defendant’s 

services, as well as the name of the Person paying for 

Defendant’s services; 

9) For U.S.-domiciled companies, the Customer’s federal taxpayer 

identification number; 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 8 of 32 Page ID #:306 

10) The Customer’s state or country of incorporation; and 

11) Whether the prospective Customer (including the principal(s), 

controlling Person(s) of the entity, and any Person(s) with a 

majority ownership interest in the entity) has ever been the 

subject of a lawsuit alleging claims under the TSR, the Telephone 

Consumer Protection Act of 1991, or any other lawsuit regarding 

illegal robocalling, illegal automated dialing, calls to the federal 

or any state Do Not Call registry, or spoofed caller IDs. 

B. Reviewing whether Defendant has received formal written inquiries, 

subpoenas, civil investigative demands, Traceback Requests, or other complaints 

about the Customer or its principal(s), and any alter egos, corporate DBA names, 

trade names, fictitious names, or aliases under which such Customer or Person(s) 

conduct or have conducted business; and 

C. Taking reasonable steps to review and assess the accuracy of the 

information provided pursuant to Section IV(a) of this Order, including, but not 

limited to: 

1) Reviewing the internet websites used by the Customer; 

2) Reviewing free, public databases hosted by state governments 

that contain information about the incorporation of business 

entities; 

3) Checking the Federal Communication’s Commission’s website 

that publishes Universal Service Fund registration numbers; 

4) Searching the FTC’s website to determine whether the Customer 

or its control Person(s) have been the subject of FTC 

enforcement action; 

5) Reviewing all formal written inquiries, subpoenas, civil 

investigative demands, Traceback Requests, and complaints 

about the Customer or calls dialed, originated, routed, or 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 9 of 32 Page ID #:307 

transmitted by the Customer, sent or shared with Defendant, to 

(a) determine whether the call was spoofed, (b) review and listen 

to prerecorded messages that are identified in or the subject of 

such requests, (c) determine whether copies of such prerecorded 

messages are found in the request itself or in public databases 

that compile recordings of such messages, and (d) determine 

whether the Customer is sending, routing, transmitting, dialing, 

originating, or terminating calls that deliver a message that 

misrepresents that the call is from a government agency or law 

enforcement; and 

6) Performing internet searches about the Customer and its control 

Person(s). 

D. For the purposes of this Section IV, “Customer” does not include 

Customers of Defendant to which Defendant provides only IPPBX Services that are 

incapable of initiating or transmitting calls that deliver pre-recorded messages and 

that the Customer does not use in connection with telemarketing. For the purposes 

of this Section IV, “Customer” also does not include entities that are customers of 

Defendant’s Customers but do not have a Customer relationship with Defendant. 

V. CLIENT REVIEW AND TERMINATION 

IT IS FURTHER ORDERED that 

A. Defendant must immediately terminate or refrain from entering into a 

relationship with a Customer if a review under Section IV reveals that the Customer: 

1) Engages in Telemarketing without a Subscription Account 

Number for accessing the National Do Not Call Registry; 

2) Is offering VoIP telephony services, the provisioning and/or 

assignment of telephone numbers, or any other 

telecommunications or information services, without a current, 

valid Universal Service Fund registration number; 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 10 of 32 Page ID #:308 

3) States it does not have a taxpayer identification number if it is a 

U.S.-domiciled company; 

4) Has provided false, inaccurate, or misleading information in 

response to Defendant’s screening process pursuant to Section 

IV and declined to correct that information upon request; 

5) Refuses to provide any of the information described in Section 

IV; 

6) Is a High-Risk Customer that pays for services by any means 

other than (a) a bank transfer from a financial institution 

domiciled in the United States or (b) a credit card; 

7) Is a High-Risk Customer that has been the subject of, or calls 

dialed, originated, transmitted, or routed by the Customer have 

been the subject of, a total of three (3) or more federal or state 

government agency subpoenas or civil investigative demands 

issued to or otherwise shared with Defendant; or 

8) Is a High-Risk Customer that has been the subject of, or calls 

dialed, originated, transmitted, or routed by the Customer have 

been the subject of, a total of three (3) or more Traceback 

Requests or upstream or downstream carrier complaints sent to 

or shared with Defendant during any sixty-day (60-day) period. 

B. Defendant must also immediately terminate, or refrain from entering 

into, any business relationship with a Customer if Defendant becomes aware of or 

obtains any information suggesting that the Customer is engaging in conduct 

prohibited in Sections I, II, or III of this Order. 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 11 of 32 Page ID #:309 

VI. COMPLIANCE WITH OTHER LAWS AND REGULATIONS 

For clarity, nothing in this Order excuses Defendant from complying with any 

applicable law or regulation or requires Defendant to take any action that would 

violate any law or regulation. 

VII. MONETARY JUDGMENT FOR CIVIL PENALTY 

IT IS FURTHER ORDERED that: 

A. Judgment in the amount of Ten Million Dollars ($10,000,000) is 

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

B. The monetary judgment in Subsection A is hereby suspended, subject 

to the Subsections below. 

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

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

financial statements and related documents (collectively, “financial 

representations”) submitted to the Commission and Plaintiff, including the financial 

statement signed by Defendant’s VP Finance on March 7, 2023. 

D. The suspension of the judgment will be lifted 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 in the amount specified in Subsection A above (which the parties 

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

for the violations alleged in the Complaint), less any payment previously made 

pursuant to this Section, plus interest computed from the date of entry of this Order. 

VIII. ADDITIONAL MONETARY PROVISIONS 

IT IS FURTHER ORDERED that: 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 12 of 32 Page ID #:310 

A. Defendant relinquishes dominion and all legal and equitable right, title, 

and interest in all assets transferred pursuant to this Order and may not seek the 

return of any assets. 

B. The facts alleged in the Complaint will be taken as true, without further 

proof, in any subsequent civil litigation by or on behalf of Plaintiff or the 

Commission relating to enforcement of this Order or enforcement of any rights to 

any payment or monetary judgment pursuant to this Order. 

C. Defendant acknowledges that its Taxpayer Identification Number 

(Employer Identification Number), which Defendant previously submitted to the 

Commission, may be used for collecting and reporting on any delinquent amount 

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

IX. COOPERATION 

IT IS FURTHER ORDERED that Defendant must fully cooperate with 

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

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

of the Complaint. Defendant must provide truthful and complete information, 

evidence, and testimony. 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. 

X. ORDER ACKNOWLEDGEMENTS 

IT IS FURTHER ORDERED that Defendant obtain acknowledgments of 

receipt of this Order: 

A. 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. 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 13 of 32 Page ID #:311 

B. For 5 years after entry of this Order, 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 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. 

XI. COMPLIANCE REPORTING 

IT IS FURTHER ORDERED that Defendant make timely submissions to 

the Commission: 

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

report, sworn under penalty of perjury: 

1) 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 

Defendant’s businesses by all of their names, telephone numbers, 

and physical, postal, email, and Internet addresses; (c) describe 

the activities of each business, including the goods and services 

offered and the means of advertising, marketing, and sales; 

(d) describe in detail whether and how Defendant is in 

compliance with each Section of this Order; and (e) provide a 

copy of each Order Acknowledgment obtained pursuant to this 

Order, unless previously submitted to the Commission. 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 14 of 32 Page ID #:312 

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

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

the following: 

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

contact; or (b) the structure of Defendant or any entity that 

Defendant has any ownership interest in or controls directly or 

indirectly that may affect compliance obligations arising under 

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

entity or any subsidiary, parent, or affiliate that engages in any 

acts or practices subject to this Order. 

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

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

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: United States v. XCast Labs, Inc. 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 15 of 32 Page ID #:313 

XII. RECORDKEEPING 

IT IS FURTHER ORDERED that Defendant must create certain records for 

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

Specifically, Defendant 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; and 

C. all records necessary to demonstrate full compliance with each 

provision of this Order, including all submissions to the Commission. 

XIII. COMPLIANCE MONITORING 

IT IS FURTHER ORDERED that, for the purpose of monitoring 

Defendant’s’ compliance with this Order: 

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

the Commission or Plaintiff, Defendant must: submit additional compliance reports 

or other requested information, which must be sworn under penalty of perjury; 

appear for depositions; and produce documents for inspection and copying. The 

Commission and Plaintiff are also authorized to obtain discovery, without further 

leave of court, using any of the procedures prescribed by Federal Rules of Civil 

Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69. 

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

authorized to communicate directly with Defendant. Defendant must permit 

representatives of the Commission and Plaintiff to interview any employee or other 

person affiliated with 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 their representatives as consumers, suppliers, or other 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 16 of 32 Page ID #:314 

individuals or entities, to Defendant or any individual or entity affiliated with 

Defendant, 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. 

XIV. 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. 

XV. DENIAL OF PENDING MOTIONS 

IT IS FURTHER ORDERED that all pending motions in this action are 

DENIED AS MOOT. Accordingly, Plaintiff’s Motion to Strike or Dismiss 

Counterclaim from Answer to Complaint, (ECF No. 22), is DENIED AS MOOT. 

IT IS SO ORDERED. 

December 28, 2023 DATE: ______________ _______________________________ 

Hon. Otis D. Wright, II 

UNITED STATES DISTRICT JUDGE 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 17 of 32 Page ID #:315 

SO STIPULATED AND AGREED: 

FOR PLAINTIFF: 

THE UNITED STATES OF AMERICA 

BRIAN M. BOYNTON 

Principal Deputy Assistant Attorney General, Civil Division 

ARUN G. RAO 

Deputy Assistant Attorney General, Civil Division 

AMANDA N. LISKAMM 

Director, Consumer Protection Branch 

RACHAEL L. DOUD 

Assistant Director 

/s/ Zachary A. Dietert Date: December 19, 2023

ZACHARY A. DIETERT 

Trial Attorney 

Consumer Protection Branch 

Civil Division, U.S. Department of Justice 

450 5th Street, NW, Suite 6400-South 

Washington, D.C. 20044-0386 

Phone: (202) 616-9027 

Fax: (202) 514-8742 

Email: Zachary.A.Dietert@usdoj.gov 

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1 FOR DEFENDANT: 

Date:~ 7'2<>27 

t 

BETH A. OLIAK 

EDWARD A. PENNINGTON 

Pennington Oliak, PLLC 

1055 Thomas Jefferson Street NW, Suite L35 

Washington, DC 20007 

Phone: (202) 897-2725 

Fax: (202) 838-824 

Email: oliakb@pennoliak.com; epennington@pennoliak.com 

COUNSEL FOR XCAST LABS, INC. 

DEFENDANT: 

XCAST LABS, INC. 

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Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 18 of 32 Page ID #:316 
PART 310-TELEMARKETING SALES § 310-1 Scope of regulations in this 

RULE 16 CFR PART 310 part. 

This part implements the Telemarketing and Consumer Fraud and Sec. 

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

310.2 Definitions. 6108, as amended. 

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

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

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

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

otherwise noted. else of value. 

380 

Attachment A 

Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 19 of 32 Page ID #:317 
Federal Trade Commission §310.2 

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

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

(c) Billing i nformation means any data ( o) Established business relationship 

that enables any person to access a means a relationship between a seller customer's or donor's account, such as and a consumer based on: a credit card, checking, savings, share (1) the consumer's purchase, rental, or similar account, utility bill, mort­ or lease of the seller's goods or services 

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

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

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

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

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

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

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

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

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

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

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

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

coupon book, or other credit device ex­ or appreciation. 

isting for the purpose of obtaining (r) Material means likely to affect a money, property, labor, or services on person's choice of, or conduct regardcredit. ing, goods or services or a charitable 

(j) Credit card sales draft means any contribution. 

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

transaction . authorized under a written contract 

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

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

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

it cards issued or licensed by the oper­ the purchase of goods or services or a ator of that system. charitable contribution. 

(l) Customer means any person who is (t) Merchant agreement means a writ­ or may be required to pay for goods or ten contract between a merchant and 

services offered through tele­ an acquirer to honor or accept credit 

marketing. cards, or to transmit or process for 

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

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

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

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

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

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

cluding, but not limited to, a reduction failure to take an affirmative action to 

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

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

itor or debt collector. as acceptance of the offer. 

381 

Attachment A 

Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 20 of 32 Page ID #:318 
§310.3 16 CFR Ch. I (1-1-14 Edition) 

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

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

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

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

table contribution. pages of written material or illustra­

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

ited or general partnership, corpora­ person making the solicitation does 

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

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

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

charge to be placed against a cus­ without further solicitation. For purtomer's or donor's account without ob­ poses of the previous sentence, the 

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

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

information about, or attempting to telemarketing transaction pursuant to 

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

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

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

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

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

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

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

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

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

pay for goods or services offered, (dd) Telemarketing means a plan, pro­ 659 

gram, or campaign which is conducted 

to induce the purchase of goods or serv­ 659 When a seller or telemarketer uses, or 

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

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

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

t hrough the mailing of a catalog up payment or authorization for payment. In 

382 

Attachment A 

Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 21 of 32 Page ID #:319 
Federal Trade Commission §310.3 

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

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

material information: conditions of the negative option fea­

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

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

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

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

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

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

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

making refunds, cancellations, ex­ service: 

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

informing the customer that this is the achieve the represented results, and to 

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

marketer makes a representation a settlement offer to any of the cus­ about a refund, cancellation, exchange, tomer's creditors or debt collectors, or repurchase policy, a statement of all the time by which the debt relief serv­ material terms and conditions of such ice provider will make a bona fide setpolicy; tlement offer to each of them; (iv) In any prize promotion, the odds (B) to the extent that the service of being able to receive the prize, and, may include a settlement offer to any if the odds are not calculable in ad­ of the customer's creditors or debt colvance, the factors used in calculating lectors, the amount of money or the the odds; that no purchase or payment percentage of each outstanding debt is required to win a prize or to partici­ that the customer must accumulate be­ pate in a prize promotion and that any fore the debt relief service provider purchase or payment will not increase will make a bona fide settlement offer the person's chances of winning; and to each of them; the no-purchase/no-payment method of 

participating in the prize promotion (C) to the extent that any aspect of 

the debt relief service relies upon or re­ with either instructions on how to par­ sults in the customer's failure to make ticipate or an address or local or toll­ timely payments to creditors or debt free telephone number to which cus­ collectors, that the use of the debt re­ tomers may write or call for informa­ lief service will likely adversely affect tion on how to participate; the customer's creditworthiness, may (v) All material costs or conditions result in the customer being subject to to receive or redeem a prize that is the collections or sued by creditors or debt subject of the prize promotion; collectors, and may increase the (vi) In the sale of any goods or serv­ amount of money the customer owes ices represented to protect, insure, or due to the accrual of fees and interest; otherwise limit a customer's liability and in the event of unauthorized use of the 

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

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

u.s.c. 1643; an insured financial institution, that 

the customer owns the funds held in 

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

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

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

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

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

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

383 

Attachment A 

Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 22 of 32 Page ID #:320 
§310.3 16 CFR Ch. I (1-1-14 Edition) 

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

information: bona fide offer to negotiate, settle, or 

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

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

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

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

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

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

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

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

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

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

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

policies; verifiable authorization, except when 

(v) Any material aspect of a prize the method of payment used is a credit 

promotion including, but not limited card subject to protections of t he to, the odds of being able to receive a Tru th in Lending Act and Regulation 

prize, t he nature or value of a prize, or Z,661 or a debit card subject to the pro­ that a purchase or payment is required tections of the Electronic Fund Trans­ to win a prize or to participate in a fer Act and Regulation E. 2 66 Such au­ prize promotion; thorization shall be deemed verifiable (vi) Any material aspect of an invest­ if any of the following means is em­ ment opportunity including, but not ployed: limited to, risk, liquidity, earnings pa­ (i) Express written authorization by ten tial, or profitability; the customer or donor, which includes (vii) A seller's or telemarketer's af­ t he customer's or donor's signature;663 filiation with, or endorsement or spon­ (ii) Express oral authorization which sorship by, any person or government is audio-recorded and made available entity; upon request to the customer or donor, (viii) That any customer needs of­ and the customer's or donor's bank or fered goods or services to provide pro­ other billing entity, and which evi­ tections a customer already has pursu­ dences clearly both the customer's or ant to 15 U.S.C. 1643; donor's authorization of payment for (ix) Any material aspect of a nega­ the goods or services or charitable con­ t ive option feature including, but not tribution t hat are the subject of the limited to, the fact that the customer's telemarketing transaction and the cus­ account will be charged unless the cus­ tomer's or donor's receipt of a ll of the tomer takes an affirmative action to following information: avoid t he charge(s), the date(s) t he (A) The number of debits, charges, or charge(s) will be submitted for pay­ payments (if more than one); ment, and the specific steps the cus­ (B) The date(s) t he debit(s), tomer must take to avoid the charge(s), or payment(s) will be sub­ charge(s); or mitted for payment; (x) Any material aspect of a ny debt 

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

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

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

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

205. achieve the represented results; the For purposes of this Rule, the term amount of money or the percentage of 663 

"signature" shall include an electronic or each outstanding debt that the cus­ digi tal form of signature, to the extent that 

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

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

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

384 

Attachment A 

Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 23 of 32 Page ID #:321 
Federal Trade Commission §310.3 

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

(D) The customer's or donor's name; draft generated by a telemarketing 

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

specificity such that the customer or between the cardholder and the mer­ donor understands what account will chant; be used to collect payment for the (2) Any person to employ, solicit, or goods or services or charitable con­ otherwise cause a merchant, or an em­ tribution that are the subject of the ployee, representative, or agent of the telemarketing transaction; merchant, to present to or deposit into (F) A telephone number for customer the credit card system for payment, a or donor inquiry that is answered dur­ credit card sales draft generated by a ing normal business hours; and telemarketing transaction that is not (G) The date of the customer's or do­ the result of a telemarketing credit nor's oral authorization; or (iii) Written confirmation of the card transaction between the cardtransaction, identified in a clear and holder and the merchant; or 

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

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

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

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

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

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

any entity on behalf of which a chari­ conversion and preacquired account information. table contribution is being requested; 

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

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

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

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

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

telemarketing act or practice and a telemarketer's affiliation with, or enviolation of this Rule for: dorsement or sponsorship by, any per­

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

posit into, or cause another to present 

385 

Attachment A 

Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 24 of 32 Page ID #:322 
§310.4 16 CFR Ch. I (1-1-14 Edition) 

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

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

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

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

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

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

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

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

has expired; and the individual debt amount bears to 

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

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

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

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

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

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

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

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

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

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

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

permissible purpose; amount actually paid to satisfy the 

(3) Requesting or receiving payment debt. 

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

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

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

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

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

days after such money or other item is alteration of the t erms of payment or 

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

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

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

torney; (B) The customer owns the funds held 

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

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

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

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

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

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

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

wise altered the terms of a t least one without penalt y, and must receive all 

386 

Attachment A 

Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 25 of 32 Page ID #:323 
Federal Trade Commission §310.4 

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

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

compliance with § 310.4(a)(5 )(i)(A) number identified pursuant to para­ through (C), within seven (7) business graph (a)(7)(ii)(A) of this section; or days of the customer's request. (8) Failing to transmit or cause to be 

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

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

marketing; provided, however, that telemarketer, to any caller identificathis paragraph shall not apply to the t ion service in use by a recipient of a disclosure or receipt of a customer's or telemarketing call; provided that it 

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

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

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

transaction; name of the seller or charitable organi­

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

seller or telemarketer must obtain the business hours. express informed consent of the cus­ (b) Pattern of calls. (1) It is an abusive 

tomer or donor to be charged for the telemarketing act or practice and a goods or services or charitable con­ violation of this Rule for a tele­ tribution and to be charged using the marketer to engage in, or for a seller 

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

marketing transacti on involving the following conduct: 

preacquired account information, the (i) Causing any telephone to ring, or requirements in paragraphs (a)(7)(i) engaging any person in telephone conthrough (ii) of this section must be met versation, repeatedly or continuously 

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

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

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

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

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

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

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

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

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

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

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

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

action involving preacquired account being solicited; or information not described in paragraph (B) That person's telephone number 

(a)(7)(i) of this section, the seller or is on the "do-not-call" registry, maintelemarketer must: tained by the Commission, of persons 

(A) At a minimum, identify the ac­ who do not wish to receive outbound 

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

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

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

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

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

387 

Attachment A 

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§310.4 16 CFR Ch. I (1-1-14 Edition) 

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

by or on behalf of a specific party may member of, or previous donor to, a nonbe placed to that person, and shall in­ profit charitable organization on whose 

clude the telephone number to which behalf the call is made, the seller or the calls may be placed and the signa­ telemarketer: 

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

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

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

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

the person's completed greeting. answered in person by a consumer, that 

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

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

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

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

§ 310. 4(b )( 4)(iii), unless: t he message. The mechanism must: 

(A) In any such call to induce the (1) Aut omatically add the number 

purchase of any good or service, the called to the seller's entity-specific Do 

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

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

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

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

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

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

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

that deliver prerecorded messages by keypress-activated opt-out mechanism 

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

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

(B) In any such call to induce the Not Call list; purchase of any good or service, or to (2) Immediately thereafter disconnects the call; and 664 For purposes of this Rule. the term (3) Is accessible at any time through­

"signature" shall include an electronic or out t he duration of t he telemarketing digital form of signature, to the extent that campaign; and such form of signature is recognized as a 

valid signature under applicable federal Jaw (iii) Complies with all other requireor state contract law. ments of this part and other applicable 5 "" For purposes of this Rule, the term federal and state laws. "signature" shall include an electronic or (C) Any call t hat complies with all digital form of signature , to the extent that applicable requirements of- this para­ such form of signature is recognized as a valid signature under applicable federal Jaw graph (v) shall not be deemed to violate 

or state contract Jaw. §310.4(b)(l )(iv) of this part. 

388 

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Federal Trade Commission §310.4 

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

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

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

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

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

campaign continues. or practice and a violation of this Rule 

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

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

routine business practice: (iv) The seller or telemarketer, in ac­ (i) It has established and imple­ cordance with § 310.5(b)-(d), retains 

mented written procedures to comply records establishing compliance with 

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

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

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

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

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

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

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

phone numbers the seller or charitable person's location. 

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

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

(iv) The seller or a telemarketer uses marketing act or practice and a violaa process to prevent telemarketing to t ion of this Rule for a telemarketer in 

any telephone number on any list es­ ·an outbound telephone call or internal or external upsell to induce the pur­ tablished pursuant to § 310.4(b)(3)(iii) or 310.4(b)(l)(iii)(B), employing a version chase of goods or services to fail to disclose truthfully, promptly, and in a of the " do-not-call " registry obtained clear and conspicuous manner to the from the Commission no more than 

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

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

(vi) Any subsequent call otherwise This provision does not affect any sell­ violating § 310.4(b)(l)(ii) or (iii) is the 666 

er's or telemarketer's obligation to comply result of error. with relevant state and federal Jaws, includ­

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

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

389 

Attachment A 

Case 2:23-cv-03646-ODW-JC Document 38 Filed 12/28/23 Page 28 of 32 Page ID #:326 
§310.5 16 CFR Ch. I (1-1-14 Edition) 

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

purchase or payment will not increase telephone number, and the job title(s) 

t he person's chances of winning. This for all current and former employees disclosure must be made before or in directly involved in telephone sales or conjunction with the description of t he solicitations; provided, however, that if 

prize to the person called. If requested the seller or telemarketer permits fic­ by that person, the telemarketer must titious names t o be used by employees, disclose the no-purchase/no-payment each fictitious name must be traceable entry met hod for the prize promotion; to only one specific employee; and provided, however, that, in any inter­ (5) All verifiable authorizations or nal upsell for the sale of goods or serv­ records of express informed consent or ices, the seller or telemarketer must 

express agreement required to be pro­ provide the disclosures listed in this section only to . the extent that the in­ vided or received under this Rule. 

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

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

marketing transaction. in a ny form, and in the same manner, 

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

table solicitations. It is an abusive tele­ records in the ordinary course of busimarketing act or practice and a viola­ ness. Failure to keep all records re­ tion of this Rul e for a telemarketer, in quired by §310.5(a) shall be a violation an outbound telephone call to induce a of this Rule. charitable contribution, to fail to dis­ (c) The seller and the telemarketer close truthfully, promptly, and in a calling on behalf of t he seller may, by clear and conspicuous manner to the written agreement, allocate responsi­ person receiving the call, the following bility between themselves for the rec­ information: ordkeeping required by this Section. (1) The identity of the charitable or­ When a seller and telemarketer have ganization on behalf of which the re­ entered into such an agreement, the quest is being made; and 

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

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

case may be, need not keep records 

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

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

no such agreement exists, the seller (a) Any seller or telemarketer shall shall be responsible for complying with keep, for a period of 24 months from §§ 310.5(a)(l )-(3) and (5); the tele­ the date t he record is produced, the fol­ marketer shall be responsible for com­ lowing records relating to its tele­ plying with §310.5(a)(4). marketing activi ties: (1) All substantially different adver- (d) In the event of any dissolution or 

tising, brochures, telemarketing termination of the seller's or telescripts, and promotional materials; marketer's business, the principal of 

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

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

have a value of $25.00 or more; of the seller's or telemarketer's busi­ (3) The name and last known address ness, the successor business shall main­ of each customer, the goods or services tain all records required under this sec­ purchased, the date such goods or serv­ tion. 

ices were shipped or provided, and the 

amount paid by t he customer for the U.S.C. 1601 et seq., and Regulation Z, 12 CFR 

goods or services;667 226, compliance with the recordkeeping requirements under the Truth in Lending Act, 667 For offers of consumer credit products and Regulation Z, shall constitute complisubject to the Truth in Lendin g Act, 15 ance with §310.5(a)(3) of this Rule. 

390 

Attachment A 

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Federal Trade Commission §310.7 

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

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

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

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

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

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

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

and (c); discloses all material information list­

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

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

closure Requirements and Prohibitions mail solicitation, and that contains no 

Concerning Franchising," ("Franchise material misrepresentation regarding 

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

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

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

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

part 437, provided, however, that this promotions, investment opportunities, exemption does not apply to the re­ debt relief services, business opportuniquirements of §§310.4(a)(l), (a)(7), (b), ties other than business arrangements 

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

(3) Telephone calls in which the sale ness Opportunity Rule, or goods or of goods or services or charitable solic­ services described in §§310.3(a)(l)(vi) or itation is not completed, and payment 310.4(a)(2)-(4); or to any instances of or authorization of payment is not re­ upselling included in such telephone 

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

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

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

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

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

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

table organization, or telemarketer, 

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

does not apply to any instances of persons. 

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

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

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

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

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

apply t o calls initiated by a customer action on the Commission, if feasible, or donor in response to an advertise­ prior to its initiating an action under m ent relating to investmen t opportuni­ this Rule. The notice shall be sent to 

ties, debt relief services, business op­ the Office of the Director, Bureau of 

portunities other than business ar­ Consumer Protection, Federal Trade 

rangements covered by the Franchise Commission, Washington, DC 20580, and 

391 

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§310.8 16 CFR Ch. I (1 - 1-14 Edition) 

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

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

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

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

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

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

action. no charge to any person engaging in or 

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

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

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

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

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

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

Not Call Registry under this Rule, 47 

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

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

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

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

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

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

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

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

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

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

sion under § 310.4(b)(l)(iii)(B); provided, paying the annual fee, and each person 

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

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

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

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

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

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

pose. month in which the person paid the fee 

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

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

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

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

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

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

the annual fee, required by § 310.8(c), to additional area codes of data during 

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

in the National Do Not Call Registry; fee under §310.B(c) must first pay $30 

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

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

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

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

seller does not access the National Do period. 

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

pose. Call Registry is limited to tele­

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

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

392 

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Federal Trade Commission §311.4 

calls to consumers, service providers 

acting on behalf of such persons, and 

any government agency that has law 

enforcement authority. Prior to access­ ing 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 num­ bers on the registry. If the person is ac­ cessing 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. 

393 

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