[Federal Register Volume 87, Number 107 (Friday, June 3, 2022)]
[Proposed Rules]
[Pages 33677-33695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-09914]


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FEDERAL TRADE COMMISSION

16 CFR Part 310

RIN 3084-AB19


Telemarketing Sales Rule

AGENCY: Federal Trade Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') seeks 
public comment on proposed amendments to the Telemarketing Sales Rule 
(``TSR''). The proposed amendments would require telemarketers and 
sellers to maintain additional records of their telemarketing 
transactions, prohibit material misrepresentations and false or 
misleading statements in business to business (``B2B'') telemarketing 
transactions, and add a new definition for the term ``previous donor.'' 
The modified recordkeeping requirements are necessary to protect 
consumers from deceptive or abusive telemarketing practices and support 
the Commission's law enforcement mandate to enforce the TSR. The 
prohibition on material misrepresentations and false or misleading 
statements is necessary to protect businesses from deceptive 
telemarketing practices. The new definition of ``previous donor'' will 
clarify that a telemarketer may not use prerecorded messages to solicit 
charitable donations on behalf of a charitable organization unless the 
recipient of the call made a donation to that particular charitable 
organization within the prior two years.

DATES: Comments must be received by August 2, 2022.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Telemarketing Sales 
Rule (16 CFR part 310--NPRM) (Project No. R411001)'' on your comment 
and file your comment through https://www.regulations.gov. If you 
prefer to file your comment on paper, mail your

[[Page 33678]]

comment to the following address: Federal Trade Commission, Office of 
the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW, 5th Floor, Suite 5610 (Annex B), Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: Benjamin R. Davidson, (202) 326-3055, 
<a href="/cdn-cgi/l/email-protection#6e0c0a0f18070a1d01002e081a0d40090118"><span class="__cf_email__" data-cfemail="34565055425d50475b5a745240571a535b42">[email protected]</span></a>, or Patricia Hsue, (202) 326-3132, <a href="/cdn-cgi/l/email-protection#f989918a8c9cb99f8d9ad79e968f"><span class="__cf_email__" data-cfemail="d7a7bfa4a2b297b1a3b4f9b0b8a1">[email protected]</span></a>, 
Division of Marketing Practices, Bureau of Consumer Protection, Federal 
Trade Commission, 600 Pennsylvania Avenue NW, Mail Stop CC-8528, 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Federal Trade Commission issues this notice of proposed 
rulemaking (``NPRM'') to invite public comment on proposed amendments 
to the TSR (part 310). The proposed amendments to the recordkeeping 
requirements reflect evolutions in the marketplace that make it more 
difficult for the Commission and other regulators to obtain records of 
sellers' and telemarketers' telemarketing activities to enforce the 
TSR. The principal proposed amendments would require sellers or 
telemarketers to retain additional records of their telemarketing 
activities and clarify the existing recordkeeping requirements to more 
clearly delineate the information telemarketers or sellers must keep to 
comply with those provisions. The Commission is also proposing to 
prohibit in B2B telemarketing transactions: (1) Several types of 
material misrepresentations in the sale of goods or services; and (2) 
false or misleading statements to induce a person to pay for goods or 
services or to induce a charitable contribution (collectively, 
``misrepresentations''). This prohibition is necessary to help protect 
businesses from deceptive telemarketing practices. Finally, the 
Commission is proposing a new definition of the term ``previous donor'' 
to clarify that telemarketers are prohibited from using prerecorded 
messages to solicit charitable contributions from consumers on behalf 
of a non-profit charitable organization unless the consumer donated to 
that non-profit charitable organization within the last two years.
    This NPRM invites written comments on all issues raised by the 
proposed amendments, including answers to the specific questions set 
forth in Section IV of this document.

II. Overview of the Telemarketing Sales Rule

    Congress enacted the Telemarketing and Consumer Fraud and Abuse 
Prevention Act (``Telemarketing Act'' or ``Act'') in 1994 to curb 
deceptive and abusive telemarketing practices and provide key anti-
fraud and privacy protections for consumers receiving telephone 
solicitations to purchase goods or services.\1\ The Telemarketing Act 
directed the Commission to adopt a rule prohibiting deceptive or 
abusive telemarketing practices, including prohibiting telemarketers 
from undertaking a pattern of unsolicited calls that reasonable 
consumers would consider coercive or abusive of their privacy, 
restricting the time of day telemarketers may make unsolicited calls to 
consumers, and requiring telemarketers to promptly and clearly disclose 
that the purpose of the call is to sell goods or services.\2\ The Act 
also generally directed the Commission to address in its rule other 
acts or practices it found to be deceptive or abusive, including acts 
or practices of entities or individuals that assist and facilitate 
deceptive telemarketing, and to consider including recordkeeping 
requirements.\3\ Finally, the Act authorized state Attorneys General, 
or other appropriate state officials, and private litigants to bring 
civil actions in federal district court to enforce compliance with the 
FTC's rule.\4\
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    \1\ 15 U.S.C. 6101-6108.
    \2\ 15 U.S.C. 6102(a)(3). The Telemarketing Act was subsequently 
amended in 2001 to add Section 15 U.S.C. 6102(a)(3)(D), which 
requires a telemarketer to promptly and clearly disclose that the 
purpose of the call is to solicit charitable contributions. See 
Uniting and Strengthening America by Providing Appropriate Tools 
Required to Intercept and Obstruct Terrorism Act (``USA PATRIOT 
Act''), Public Law 107-56, 115 Stat. 272 (Oct. 26, 2001).
    \3\ 15 U.S.C. 6101(a). See also 2002 notice of proposed 
rulemaking, 67 FR 4492, 4510 (Jan. 30, 2002).
    \4\ 15 U.S.C. 6103, 6104.
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    Pursuant to the Act's directive, the FTC promulgated the TSR on 
August 23, 1995.\5\ The FTC included recordkeeping requirements in 
Sec.  310.5, stating the provision was ``necessary to enable law 
enforcement agencies to ascertain whether sellers and telemarketers are 
complying with the requirements of the Final Rule, to identify persons 
who are involved in any challenged practices, and to identify customers 
who may have been injured.'' \6\ The FTC also included a prohibition on 
misrepresenting several categories of material information in Sec.  
310.3(a)(2).\7\ The categories were based on ``established case law'' 
and ``allegations in complaints filed in recent years by the 
Commission.'' \8\ The Commission also included a prohibition on making 
false or misleading statements to induce a person to pay for goods or 
services, or to induce a charitable contribution, in Sec.  
310.3(a)(4).\9\ Section 310.3(a)(4) was designed to ``provide[] law 
enforcement with flexibility to address new ways that sellers and 
telemarketers engaged in fraud might attempt to take consumers' 
money.'' \10\
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    \5\ See Statement of Basis and Purpose and Final Rule 
(``Original TSR''), 60 FR 43842 (Aug. 23, 1995).
    \6\ Id. at 43857.
    \7\ Id. at 43848.
    \8\ Id.
    \9\ Id. at 43851.
    \10\ Id.
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    The original TSR excluded several types of calls, including B2B 
calls other than those that sold office and cleaning supplies.\11\ The 
Commission required B2B calls that sold office and cleaning supplies to 
comply with the TSR because, in the Commission's experience, calls 
involving the sale of those products were ``by far the most significant 
business-to-business problem area.'' \12\
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    \11\ Id. at 43867.
    \12\ Id. at 43861.
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    Since then, the Commission has amended the Rule on four occasions: 
(1) In 2003 to, among other things, create the National Do-Not Call 
Registry and extend the Rule to telemarketing calls soliciting 
charitable contributions; \13\ (2) in 2008 to prohibit prerecorded 
messages (``robocalls'') selling a good or service or soliciting 
charitable contributions; \14\ (3) in 2010 to ban the telemarketing of 
debt relief services requiring an advance fee; \15\ and (4) in 2015 to 
bar the use in telemarketing of certain novel payment mechanisms widely 
used in fraudulent transactions.\16\
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    \13\ See Statement of Basis and Purpose and Final Amended Rule 
(``2003 TSR Amendments''), 68 FR 4580 (Jan. 29, 2003) (adding Do Not 
Call Registry, charitable solicitations, and other provisions).
    \14\ See Statement of Basis and Purpose and Final Rule 
Amendments (``2008 TSR Amendments''), 73 FR 51164 (Aug. 29, 2008) 
(addressing the use of robocalls).
    \15\ See Statement of Basis and Purpose and Final Rule 
Amendments (``2010 TSR Amendments''), 75 FR 48458 (Aug. 10, 2010) 
(adding debt relief provisions). The prohibition on misrepresenting 
material aspects of debt relief services in 310.3(a)(2)(x) was added 
in 2010 along with other debt relief provisions. See 2010 TSR 
Amendments, 75 FR at 48498. The Commission subsequently published 
correcting amendments to the text of Sec.  310.4 of the TSR. 
Telemarketing Sales Rule; Correcting Amendments, 76 FR 58716 (Sept. 
22, 2011).
    \16\ See Statement of Basis and Purpose and Final Rule 
Amendments (``2015 TSR Amendments''), 80 FR 77520 (Dec. 14, 2015) 
(prohibiting the use of remotely created checks and payment orders, 
cash-to-cash money transfers, and cash reload mechanisms).

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[[Page 33679]]

A. 2008 Robocall Amendment for Charitable Solicitations

    Pursuant to the Uniting and Strengthening America by Providing 
Appropriate Tools Required to Intercept and Obstruct Terrorism Act 
(``USA PATRIOT Act''),\17\ the Commission amended the TSR in 2003 to 
extend its coverage to telemarketing calls soliciting charitable 
contributions.\18\ As part of that amendment, the Commission defined 
``donor'' as ``any person solicited to make a charitable 
contribution.'' \19\ The Commission declined to limit the definition of 
donor to those who have ``an established business relationship with the 
non-profit charitable organization.'' \20\ The Commission stated its 
intent was for the term ``donor. . .[to] encompass not only those who 
have agreed to make a charitable contribution but also any person who 
is solicited to do so, to be consistent with [the Rule's] use of the 
term `customer.' '' \21\
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    \17\ Public Law 107-56, 115 Stat. 272 (Oct. 26, 2001).
    \18\ 2003 TSR Amendments, 68 FR at 4582.
    \19\ Id. at 4590.
    \20\ Id.
    \21\ Id. at 4590-91.
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    In 2008, the Commission amended the TSR to prohibit robocalls 
soliciting charitable donations unless the robocall was delivered to a 
``member of, or previous donor to, a non-profit charitable organization 
on whose behalf the call is made'' and the seller or telemarketer 
otherwise complied with the provisions of Sec.  310.4(b)(1)(v)(B).\22\ 
In allowing robocalls to previous donors, the Commission stated it was 
recognizing the strong interests of non-profit charitable organizations 
in reaching those with ``whom the charity has an existing 
relationship--i.e., members of, or previous donors to[,] the non-profit 
organization on whose behalf the calls are made . . . .'' \23\ The 
Commission concluded that allowing ``telefunders to make impersonal 
prerecorded cold calls on behalf of charities that have no prior 
relationship with the call recipients . . . would defeat the 
amendment's purpose of protecting consumers' privacy.'' \24\ Although 
the Commission's Statement of Basis and Purpose for the 2008 Amendment 
makes clear the Commission intended previous donor to mean a donor who 
has previously provided a charitable contribution to the particular 
non-profit charitable organization, the Commission did not include a 
definition of the term ``previous donor'' to explicitly effect that 
intention.
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    \22\ See 2008 TSR Amendments, 73 FR at 51185.
    \23\ Id. at 51193.
    \24\ Id. at 51194.
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    Because the TSR's definition of donor is ``any person solicited to 
make a charitable contribution,'' the Commission's 2008 Amendment could 
be misinterpreted as allowing a telemarketer to send robocalls to any 
consumer it had previously solicited for a donation on behalf of a non-
profit charitable organization, regardless of whether the consumer 
actually agreed to donate to that charitable organization. Thus, the 
Commission proposes to add a new definition of ``previous donor'' to 
clarify the exemption, explicitly referencing consumers from whom the 
non-profit charitable organization has received a donation in the last 
two years.\25\
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    \25\ The Commission proposes implementing a time limit for the 
existence of an established relationship so that consumers will not 
receive robocalls in perpetuity from organizations to which they 
have donated. The Commission chose two years to account for the 
possibility that consumers who donate annually may not necessarily 
donate exactly one year apart (i.e., one year the consumer might 
donate in January and the following year the consumer might not 
donate until December). The Commission seeks public comment on 
whether two years is an appropriate time period.
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B. TSR's Recordkeeping Provisions Regulatory History

    Since the Commission promulgated the TSR in 1995, it has not made 
substantial changes to its recordkeeping requirements under Sec.  
310.5. The TSR generally requires telemarketers and sellers to keep for 
a 24-month period records of: (1) Any substantially different 
advertisement, including telemarketing scripts; (2) lists of prize 
recipients, customers, and telemarketing employees directly involved in 
sales or solicitations; and (3) all verifiable authorizations or 
records of express informed consent or express agreement.\26\ They may 
keep the records in any form and in the same manner and format as they 
would keep such records in the ordinary course of business, and they 
may allocate responsibilities of complying with the Rule's 
recordkeeping requirements between the seller and telemarketer.\27\
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    \26\ 16 CFR 310.5(a).
    \27\ 16 CFR 310.5(b) and (c).
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    During its 2003 and 2010 rulemaking processes, the Commission 
considered whether it should modify the recordkeeping provisions in 
tandem with the substantive amendments under consideration.\28\ In each 
instance, however, the Commission declined to make substantial 
modifications to that provision, deeming such changes unnecessary to 
enact the substantive amendments it was promulgating.\29\ In its 2003 
Amendment adding the DNC provisions and extending the TSR to charitable 
solicitations, the Commission inserted a reference to ``solicitations'' 
in Sec.  310.5(a)(4) to require telemarketers and sellers to keep 
records of employees involved in charitable solicitations.\30\ It also 
inserted the phrase ``express informed consent or express agreement'' 
in Sec.  310.5(a)(5) to require sellers and telemarketers to keep 
records of those agreements, in addition to verifiable authorizations, 
since those agreements were newly added terms in the 2003 
amendments.\31\ For its 2010 Amendment, the Commission noted the 
existing recordkeeping requirements would extend to new providers of 
debt relief services as a result of the Amendment.\32\
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    \28\ In 2003, the Commission added a recordkeeping requirement 
for the abandoned call safe harbor but did not include that 
provision in Sec.  310.5(a). See 2003 TSR Amendments, 68 FR at 4645.
    \29\ See, e.g., 2003 TSR Amendments, 68 FR at 4653-54 (declining 
to implement any of the suggested recordkeeping revisions that were 
raised in the public comments); 2010 TSR Amendments, 75 FR at 48502.
    \30\ 2003 TSR Amendments, 68 FR at 4653-54.
    \31\ Id.
    \32\ 2010 TSR Amendments, 75 FR at 48502.
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    In 2015, the Commission amended the TSR to expressly state a seller 
or telemarketer bears the burden of demonstrating that a seller has an 
existing business relationship (``EBR'') with a consumer whose number 
is on the Commission's Do Not Call (``DNC'') Registry, or has obtained 
express written agreement (``EWA'') from such a consumer, as required 
by Sec.  310.4(b)(1)(iii)(B)(1)-(2).\33\ The Commission stated that 
these two amendments reflected existing law, but the Commission adopted 
the amendments to make clear the burden of proof was on sellers and 
telemarketers to assert these affirmative defenses.\34\ The Commission 
also reiterated this carve out from the DNC prohibitions applies only 
to sellers ``that obtained the EWA directly from, or has an EBR 
directly with, the person called.'' \35\ The Commission, however, did 
not amend the recordkeeping requirements to clarify what records a 
seller or telemarketer must keep to assert these affirmative defenses, 
believing that telemarketers and sellers would naturally maintain such 
records in the ordinary course of business

[[Page 33680]]

without affirmatively being required to do so.
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    \33\ 2015 TSR Amendments, 80 FR at 77555-56.
    \34\ Id.
    \35\ Id. (emphasis added). As such, ``cold calls to consumers 
whose name and numbers were purchased from a third-party list broker 
are [still] prohibited under the TSR's do-not-call provisions 
because the calls are not placed by the specific seller that 
obtained the EWA or EBR.'' Id.
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    The telemarketing landscape has changed drastically since the 
Commission promulgated the Rule's original recordkeeping provisions. 
Technological advancements have made it easier and cheaper for 
unscrupulous telemarketers to engage in illegal telemarketing, 
resulting in a greater proliferation of unwanted calls.\36\ 
Technological advancements have also reduced the burden and costs of 
recordkeeping.\37\ While the Commission has made substantial amendments 
to the TSR over the last 25 years to address the rise in unwanted 
calls--including by identifying new abusive and deceptive telemarketing 
practices such as prohibiting robocalls and calls to consumers on the 
DNC Registry \38\--the TSR's recordkeeping provisions have remained 
largely static. As such, they no longer adequately meet the needs of 
the Commission's law enforcement mission to protect consumers.
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    \36\ See, e.g., Prepared Statement of the Federal Trade 
Commission Before the United States Senate Aging Committee on 
Commerce Science and Transportation: Abusive Robocalls and How We 
Can Stop Them (Apr. 18, 2018), available at https://www.ftc.gov/system/files/documents/public_statements/1366628/p034412_commission_testimony_re_abusive_robocalls_senate_04182018.pdf
 (last visited Jan. 31, 2022). From 2016 to 2020, the Commission 
received on average over 5.5 million Do Not Call complaints per 
year, and the DNC Registry currently has over 240 million active 
telephone numbers. FTC, Do Not Call Data Book 2020 (``2020 DNC 
Databook''), at 6 (Oct. 2020), available at https://www.ftc.gov/system/files/documents/reports/national-do-not-call-registry-data-book-fiscal-year-2020/dnc_data_book_2020.pdf (last visited Jan. 31, 
2022). By comparison, within one year of its launch, the DNC 
Registry had over 62 million active telephone numbers registered, 
and the Commission received over 500,000 Do Not Call complaints. See 
Annual Report to Congress for FY 2003 and 2004 Pursuant to the Do 
Not Call Implementation Act on Implementation of the National Do Not 
Call Registry, at 3 (Sept. 2005), available at https://www.ftc.gov/sites/default/files/documents/reports/national-do-not-call-registry-annual-report-congress-fy-2003-and-fy-2004-pursuant-do-not-call/051004dncfy0304.pdf (last visited Jan. 31, 2022); National Do Not 
Call Registry Data Book for Fiscal Year 2009, at 4 (Nov. 2009), 
available at https://www.ftc.gov/sites/default/files/documents/reports_annual/fiscal-year-2009/091208dncadatabook.pdf (last visited 
Jan. 31, 2022).
    \37\ See infra Section V.C. and note 95.
    \38\ See supra notes 5-13.
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C. Law Enforcement Challenges in Enforcing the TSR

    To date, the Commission has brought more than 150 enforcement 
actions against companies and telemarketers under the TSR for DNC, 
robocall, spoofed caller identification (``caller ID''), and assisting 
and facilitating violations.\39\ In bringing those cases, the 
Commission has identified several challenges in obtaining the necessary 
records to determine whether a particular telemarketing campaign is 
covered by and compliant with the TSR, which entities are involved in 
the telemarketing campaign, and which consumers have been harmed by 
violations of the TSR.
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    \39\ See Enforcement of the Do Not Call Registry, available at 
https://www.ftc.gov/news-events/media-resources/do-not-call-registry/enforcement (last visited Jan. 31, 2022).
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    The primary hurdles are in: (1) Identifying the telemarketer and 
seller responsible for the telemarketing campaign; (2) obtaining 
records of the telemarketing calls reflecting the date, time, duration, 
and disposition of each call, as well as the phone number(s) that 
placed and received each call (i.e. ``call detail records''); and (3) 
linking the content of the telemarketing calls with the call detail 
records to determine which TSR provisions might apply to the 
telemarketing activity.
    The TSR currently requires telemarketers and sellers to retain 
records of ``all substantially different advertising, brochures, 
telemarketing scripts and promotional materials'' used in their 
telemarketing activities.\40\ It does not require sellers or 
telemarketers to keep other records of their telemarketing activities 
including call detail records or records of the nature of their 
telemarketing campaigns, such as whether the campaign used prerecorded 
messages, placed calls to consumers (``outbound telemarketing'') or 
induced calls from consumers through advertising (``inbound 
telemarketing''), or solicited from consumers or businesses. Nor does 
it require telemarketers or sellers to keep records that link a 
particular telemarketing campaign to a set of call detail records. The 
Commission's law enforcement experience has shown, absent a 
recordkeeping requirement, it is increasingly difficult to obtain these 
critical records and associate the records with the nature, purpose, or 
content of a particular telemarketing campaign, frustrating the 
Commission's law enforcement efforts. As discussed below, the 
Commission proposes recordkeeping requirements that ensure it is able 
to adequately assess whether a telemarketing campaign complies with the 
TSR and remedy the current gaps impeding effective law enforcement.
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    \40\ 16 CFR 310.5(a).
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    When the TSR was promulgated in 1995, the Commission relied on 
consumer complaints about unwanted calls to evaluate whether a 
particular telemarketing campaign likely violated the TSR and warranted 
further investigation. It also relied on consumer complaints to 
identify the relevant telemarketer responsible for making the calls. 
Specifically, the Commission could use the calling number included in 
the consumer's complaint to identify the voice service provider 
(``voice provider'') \41\ responsible for sending the call and send a 
civil investigative demand (``CID'') to the voice provider in question 
to identify the responsible telemarketer through the voice provider's 
billing records. The Commission could also obtain the voice provider's 
call detail records for that telemarketer and use that data as a proxy 
for the seller's or telemarketer's telemarketing campaign.
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    \41\ In this NPRM, a voice service provider broadly refers to 
any provider of telephony services, including telecommunications 
carriers, interconnected VoIP service providers, and any other voice 
service providers.
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    The proliferation of new technologies over the years has enabled 
bad actors to ``spoof'' or fake a calling number and send calls cheaply 
from within the United States and abroad.\42\ As a result, bad actors 
have sent increasingly large numbers of unlawful spoofed calls, making 
it more difficult for law enforcement to identify the telemarketer and 
seller responsible for a particular telemarketing campaign and obtain 
the applicable call detail records.\43\ For example, to identify a 
suspect telemarketer using ``spoofed'' calls, the Commission needs to 
issue CIDs to multiple voice providers in order to trace the call from 
the consumer to the telemarketer's voice provider. In some instances, 
by the time the Commission has identified the relevant voice provider, 
the voice provider may not have retained the records.\44\ As such, the 
call detail records either no longer exist or are not available for law 
enforcement purposes, and the Commission cannot identify the bad actor 
responsible for the spoofed calls. While the Commission has employed 
other tools to successfully identify and take action against 
telemarketers violating the law, the absence of call detail records can 
present challenges, particularly in

[[Page 33681]]

demonstrating violations of the TSR's do-not-call provisions.\45\
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    \42\ See supra note 36. On June 25, 2019, the FTC announced 
``Operation Call it Quits,'' which included 94 actions against 
illegal robocallers, many of which used spoofing technology. See 
Press Release, FTC, Law Enforcement Partners Announce New Crackdown 
on Illegal Robocalls (June 25, 2019), available at https://www.ftc.gov/news-events/press-releases/2019/06/ftc-law-enforcement-partners-announce-new-crackdown-illegal (last visited Jan. 31, 
2022).
    \43\ Id.
    \44\ In other instances, voice providers assert it is cost 
prohibitive to retrieve because they only maintain records in an 
easily retrievable format for several months before archiving them 
in the ordinary course of business.
    \45\ In March 2020, the FCC adopted new rules requiring all 
originating and terminating voice providers to adopt the 
implementation of caller ID authentication using technical standards 
known as ``STIR/SHAKEN'' in their internet Protocol (IP) portions of 
their networks by June 30, 2021 to reduce the number of spoofed 
robocalls. See FCC, Press Release, FCC Mandates That Phone Companies 
Implement Caller ID Authentication to Combat Spoofed Robocalls (Mar. 
31, 2020), available at https://docs.fcc.gov/public/attachments/DOC-363399A1.pdf (last visited Jan. 31, 2022). The FCC is also exploring 
whether to expand the mandate to intermediate voice providers and 
whether adoption of similar standards on the non-IP portions of 
voice provider networks is feasible. Id. While the adoption of STIR/
SHAKEN standards will provide a means of authenticating the caller 
ID information for some calls, spoofed calls will continue to 
challenge law enforcement in the future.
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    Even when the Commission is successful in obtaining the call detail 
records from the voice provider and identifying the seller or 
telemarketer responsible for the telemarketing campaign, that 
information is limited. As noted above, call detail records typically 
include only: (1) The phone number that placed the call (``calling 
number''); (2) the phone number that received the call (``called 
number''); (3) the date, time, and duration of the call; and (4) the 
disposition of the call (i.e., was the call answered or connected, 
transferred to another phone number, disconnected or dropped). The 
records do not contain other important information, including the 
purpose of the call, the identity of the seller or charitable 
organization, or the nature of the call, such as whether the 
telemarketer used prerecorded messages. Although sellers and 
telemarketers are required to keep records of their advertisements, 
such as telemarketing scripts, which may include information on the 
purpose of the call or the identity of the seller, they are not 
currently required to maintain records that identify the specific 
telemarketing campaign in which they used each advertisement or the 
associated call detail records.\46\
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    \46\ 16 CFR 310.5(a)(1).
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    The lack of records linking the call detail records to the nature, 
purpose, and content of the telemarketing campaign presents challenges 
to law enforcement. Without this link, it is difficult for the 
Commission to ascertain, among other issues: (1) The seller or 
charitable organization for which the telemarketer is placing calls; 
(2) the good or service the telemarketer is offering for sale or the 
charitable purpose for which the telemarketer is soliciting 
contributions; (3) whether the telemarketer used robocalls, was 
telemarketing to consumers or businesses, or the caller ID,\47\ if any, 
they transmitted in outbound telephone calls; and (4) the 
representations made during the call. Moreover, without information 
linking the call detail records to a particular telemarketing campaign, 
the Commission cannot tell when the telemarketing campaigns began and 
ended or how many calls the telemarketer made in a particular 
telemarketing campaign.
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    \47\ Voice providers frequently state that their call detail 
records contain the calling number, or the phone number that 
actually placed the call, but they do not have information on the 
name that the telemarketer chooses to submit to the call recipient's 
caller identification service, which provides caller identification 
name information to the call recipient.
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    In the FTC's law enforcement experience, sellers and telemarketers 
often claim they cannot provide this information because they do not 
keep call detail records or records associating a telemarketing 
campaign with the voice provider's call detail records. For example, 
telemarketers typically assert the voice provider's call detail records 
include both their telemarketing and non-telemarketing calls (i.e., 
non-sales calls) but they cannot identify those that are telemarketing 
calls because they do not keep such records. In other instances, 
telemarketers who run telemarketing campaigns on behalf of numerous 
sellers or non-profit charitable organizations assert they cannot 
identify the telemarketing calls they made on behalf of a particular 
client. Without such information, the Commission cannot readily 
determine whether all the calls pertain to a particular telemarketing 
campaign the Commission is seeking information about or if the calls 
are for an unrelated seller and telemarketing campaign.
    The ability to associate relevant call detail records with 
information on the nature and content of the call is also critical for 
inbound telemarketing campaigns. Although many such calls are exempt 
from the TSR under Sec.  310.6(b)(4) through (b)(6), the exemptions do 
not apply to all inbound telemarketing calls and many such calls must 
still comply with the TSR.\48\ Telemarketers frequently claim the voice 
provider's records of their inbound calls (when they exist) do not 
uniformly reflect calls that would be subject to the TSR. For example, 
they claim the voice providers' records of inbound calls include 
customer service calls that would be exempt from the TSR.
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    \48\ 16 CFR 310.6(b)(5) and (6) (e.g., inbound telemarketing 
calls regarding prize promotions, investment opportunities, and debt 
relief services, among others, are excluded from the inbound 
telemarketing exemption).
---------------------------------------------------------------------------

    Sellers or telemarketers are in the best position to have 
information about their telemarketing calls. Thus, the Commission 
proposes new recordkeeping requirements that require sellers and 
telemarketers to retain records of this information. Such records are 
important in enabling the Commission to ascertain what sections of the 
TSR apply to their telemarketing campaigns and whether the 
telemarketing campaigns are compliant with the TSR.
    The Commission also proposes to clarify existing recordkeeping 
requirements to address telemarketers' and sellers' frequent assertion 
that the TSR does not apply to their telemarketing campaigns because 
one of the TSR exemptions applies. Commonly asserted defenses to the 
FTC's law enforcement actions include that the calls were sales calls 
to business entities and not consumers, the seller or telemarketer has 
an EBR or EWA to make calls to consumers registered on the DNC 
Registry, or the seller has an express agreement, in writing, 
authorizing that particular seller to place robocalls to a consumer. 
Another frequently asserted defense is the consumer never requested to 
be placed on the entity-specific do-not-call list, made the request 
only after the telemarketing call had been made, or the consumer had 
asked to be placed on the entity-specific do-not-call list for one 
seller but the telemarketer had made subsequent calls on behalf of a 
different seller.
    While the Commission has amended the TSR to address some of these 
defenses, making clear the seller or telemarketer bears the burden of 
proof,\49\ some sellers and telemarketers still assert the defense in 
response to law enforcement inquiries even if their records are 
incomplete. For example, in some instances, the telemarketer's 
purported proof of a consumer's express written agreement is simply a 
list of the consumers' IP addresses and timestamps of the purported 
agreement. The Commission does not believe that information is 
sufficient proof to demonstrate a consumer has provided express written 
agreement to receive robocalls or to receive outbound telemarketing 
calls when a consumer has placed her phone number on the FTC's DNC 
Registry. Thus, in addition to proposing new recordkeeping 
requirements, the Commission also proposes amending existing

[[Page 33682]]

recordkeeping provisions to provide further guidance and clarification 
on the type of information necessary to assert an applicable 
affirmative defense.
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    \49\ See, e.g., 2015 TSR Amendments, 80 FR at 77555-56.
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D. Public Comments on Recordkeeping

    In 2014, the Commission embarked on a regulatory review of the TSR, 
in which it sought feedback on a number of issues including the 
existing recordkeeping requirements.\50\ It raised some of the 
challenges the Commission has faced in bringing enforcement actions 
under the TSR, including the difficulty in obtaining call detail 
records, and sought feedback on whether the current recordkeeping 
requirements are sufficient for law enforcement agencies to enforce the 
Rule's DNC provisions.\51\ Specifically, the Commission raised the 
possibility of requiring sellers and telemarketers to ``retain records 
of the telemarketing calls they have placed'' to address the 
Commission's ongoing law enforcement challenges. It asked for public 
comments on: (1) The cost and burden that the lack of such a 
requirement imposed on law enforcement and consumers, (2) the cost and 
burden such a provision would impose, particularly for small 
businesses, and (3) whether there is an alternative solution that would 
reduce the law enforcement challenges and minimize the burden on 
industry.\52\
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    \50\ See 2014 TSR Rule Review, 79 FR 46732, 46735 (Aug. 11, 
2014).
    \51\ Id.
    \52\ Id. at 46738.
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    The Commission received comments from other state and federal law 
enforcement agencies confirming the problems the Commission has 
experienced in enforcing the TSR are not unique to the agency.\53\ The 
Department of Justice (``DOJ'') cited ``extreme difficulties'' in 
obtaining call records from voice providers that provide usable 
information because they ``may contain, among other things, non-
telemarketing calls'' or calls by telemarketers for other clients not 
targeted in the investigation.\54\ DOJ also argued the burden of 
keeping call detail records would be ``slight'' since ``computer data 
storage prices are no longer an obstacle to maintaining records,'' and 
stated it is ``confident that most, if not all, reputable sellers and 
telemarketers currently maintain accurate records of their outbound 
calls.'' \55\
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    \53\ The public comments submitted in response to the 2014 TSR 
Rule Review are available at https://www.ftc.gov/policy/public-comments/2014/08/initiative-578 (last visited Jan. 31, 2022).
    \54\ DOJ, No. 00111, at 1. DOJ notes that multiple defendants 
have ``asserte[d] as a defense the inaccuracies of their own 
telemarketing call records.'' Id. (emphasis in original).
    \55\ Id. at 2.
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    The National Association of Attorneys General (``NAAG'') stated in 
its experience subpoenas to voice providers are ``time-consuming and 
frequently fruitless,'' with those served on offshore voice providers 
going unanswered and U.S. voice providers either refusing to provide 
the records or requesting an ``exorbitant fee for doing so.'' \56\ NAAG 
also argued ``savings realized by telemarketers'' from modern dialing 
technologies ``should not be realized at the expense of law 
enforcement's resources and consumer protection.'' \57\
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    \56\ NAAG, No. 00117, at 11-12.
    \57\ Id. at 12.
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    Consumer advocacy groups concurred that requiring the retention of 
outbound call detail records would benefit consumers. The National 
Consumer Law Center, Consumer Federation of America, Americans for 
Financial Reform, Consumers Union, Consumer Action, Consumer Federation 
of California, The Maryland Consumer Rights Coalition, National 
Association of Consumer Advocates, U.S. PIRG, Virginia Citizens 
Consumer Council, and Consumer Assistance Council, Inc. of Cape Cod and 
the Islands (collectively, ``NCLC, et al.'') submitted a joint comment 
supporting a recordkeeping requirement for all outbound telemarketing 
calls, and further advocating sellers and telemarketers should also be 
required to record the entirety of all completed calls so it is 
possible to examine the ``overall net impression'' of the 
representations made to determine if they are unfair or deceptive.\58\ 
AARP argued that in addition to call detail records, sellers and 
telemarketers should also maintain complete recordings of calls to 
``ease the burden on federal and state enforcers as well as make it 
easier for citizens to bring private cases.'' \59\ Another commenter 
also noted ``TCPA plaintiffs would benefit from companies keeping 
internal records.'' \60\
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    \58\ NCLC et. al., No. 00110, at 10.
    \59\ AARP, No.00097, at 5.
    \60\ West Italian, No. 00113, at 3.
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    Industry comments generally opposed any mandatory requirement to 
maintain call detail records, arguing that imposing such a requirement 
would be overly burdensome, particularly for small businesses.\61\ None 
of the industry comments, however, provided concrete information or 
data on the costs associated with requiring telemarketers to maintain 
call detail records, nor did they suggest any alternative solutions 
that address the Commission's law enforcement challenges while 
minimizing the burden on industry.
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    \61\ See, e.g., Professional Association for Customer Engagement 
(``PACE''), No. 00107, at 5; American Bankers Insurance Association 
(``ABIA''), No. 00106, at 1, 3; National Automobile Dealers 
Association (``NADA''), No. 00112, at 2.
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    Additionally, a few industry comments confirmed some businesses are 
already requiring telemarketers to retain call detail records in the 
regular course of business.\62\ Notably, the Association of Magazine 
Media (``MPA'') supported requiring ``telemarketers to retain their own 
call records'' as a ``reasonable and workable approach.'' \63\ MPA also 
stated ``[s]ome magazine publishers are currently requiring third party 
telemarketing providers to maintain outbound call records for three 
years,'' and argued recordkeeping requirements would provide ``an added 
layer of transparency that further blocks opportunities for fraudulent 
behavior.'' \64\
---------------------------------------------------------------------------

    \62\ See American Resort Development Association (``ARDA''), 
No.00100, at 7; Association of Magazine Media (``MPA''), No. 00116, 
at 4.
    \63\ MPA, No. 00116, at 4.
    \64\ Id.
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E. The Business-to-Business Exemption

    The Original TSR included an exemption for B2B calls other than B2B 
calls that sold office and cleaning supplies.\65\ The Commission 
decided not to exempt from the TSR B2B calls that sold office and 
cleaning supplies because, in the Commission's experience, those calls 
were ``by far the most significant business-to-business problem'' at 
the time.\66\ The Commission also commented it would ``reconsider that 
position if additional business-to-business telemarketing activities 
become problems after the Final Rule has been in effect.'' \67\
---------------------------------------------------------------------------

    \65\ Original TSR, 60 FR at 43867.
    \66\ Original TSR at 43861.
    \67\ Id.
---------------------------------------------------------------------------

    In 2003, the Commission reconsidered the scope of the B2B exemption 
and issued a Notice of Proposed Rulemaking that would require B2B sales 
of internet or web services to also comply with the TSR.\68\ The 
Commission explained the sale of these services had ``increased 
dramatically'' and these product areas

[[Page 33683]]

``ha[d] emerged as one of the leading sources of complaints.'' \69\ The 
Commission ultimately decided not to modify the B2B exemption because 
the Commission wanted to ``move cautiously so as not to chill 
innovation in the development of cost-efficient methods for small 
businesses to join in the internet marketing revolution.'' \70\ The 
Commission again noted it would ``continue to monitor closely'' the B2B 
telemarketing practices in this area and ``may revisit the issue in 
subsequent Rule Reviews should circumstances warrant.'' \71\
---------------------------------------------------------------------------

    \68\ 2002 notice of proposed rulemaking, 67 FR at 4500. 
``internet Services'' meant any service that allowed a business to 
access the internet, including internet service providers, providers 
of software and telephone or cable connections, as well as services 
that provide access to email, file transfers, websites, and 
newsgroups. Id. ``Web services'' was defined as ``designing, 
building, creating, publishing, maintaining, providing, or hosting a 
website on the internet.'' Id. The Commission intended for the term 
internet services to encompass any and all services related to 
accessing the internet and the term web services to encompass any 
and all services related to operating a website. Id.
    \69\ Id. at 4531.
    \70\ 2003 TSR Amendments 68 FR at 4663.
    \71\ Id.
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    Since 2003, the Commission has continued to see businesses harmed 
by deceptive B2B telemarketing. Deceptive B2B telemarketing comes in 
many forms,\72\ including schemes that sell business directory 
listings,\73\ web hosting or design services,\74\ search engine 
optimization services,\75\ and market-specific advertising 
opportunities,\76\ as well as schemes that impersonate the 
government.\77\ For example, some of these schemes were the subject of 
a coordinated FTC-led crackdown on scams targeting small businesses, 
called ``Operation Main Street,'' announced in June of 2018.\78\ The 
Commission believes it is now time to reassess the B2B exemption and 
address problems associated with B2B telemarketing.
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    \72\ A 2018 survey conducted by the Better Business Bureau 
revealed that the same scams that harm consumers, such as tech 
support scams and imposter scams, also harm small businesses, and 
that 57% of scams that impact small businesses are perpetrated 
through telemarketing. Better Business Bureau, Scams and Your Small 
Business Research Report, at 9-10 (June 2018), available at https://www.bbb.org/SmallBizScams (last visited Jan. 31, 2022).
    \73\ See, e.g., FTC v. Your Yellow Book Inc., No. 14-cv-786-D 
(W.D. Ok. July 24, 2014), available at https://www.ftc.gov/system/files/documents/cases/140807youryellowbookcmpt.pdf (last visited 
Jan. 31, 2022); FTC v. OnlineYellowPagesToday.com, Inc., No. 14-cv-
0838 RAJ (W.D. Wa. June 9, 2014), available at https://www.ftc.gov/system/files/documents/cases/140717onlineyellowpagescmpt.pdf (last 
visited last visited Jan. 31, 2022); FTC v. Modern Tech. Inc., et. 
al., No. 13-cv-8257 (Nov. 18, 2013) available at https://www.ftc.gov/sites/default/files/documents/cases/131119yellowpagescmpt.pdf (last visited Jan. 31, 2022); FTC v. 
6555381 Canada Inc. d/b/a Reed Publishing, No. 09-cv-3158 (N.D. Ill. 
May 27, 2009) available at https://www.ftc.gov/sites/default/files/documents/cases/2009/06/090602reedcmpt.pdf (last visited Jan. 31, 
2022); FTC v. 6654916 Canada Inc. d/b/a Nat'l. Yellow Pages Online, 
Inc., No. 09-cv-3159 (N.D. Ill. May 27, 2009), available at https://www.ftc.gov/sites/default/files/documents/cases/2009/06/090602nypocmpt.pdf (last visited Jan. 31, 2022); FTC v. Integration 
Media, Inc., No. 09-cv-3160 (N.D. Ill. May 27, 2009), available at 
https://www.ftc.gov/sites/default/files/documents/cases/2009/06/090602goamcmpt.pdf (last visited Jan. 31, 2022); FTC v. Datacom 
Mktg. Inc., et. al., No. 06-cv-2574 (N.D. Ill. May 9, 2006), 
available at https://www.ftc.gov/sites/default/files/documents/cases/2006/05/060509datacomcomplaint.pdf (last visited Jan. 31, 
2022); FTC v. Datatech Commc'ns, Inc., No. 03-cv-6249 (N.D. Il. Aug. 
3, 2005) (filing amended complaint), available at https://www.ftc.gov/sites/default/files/documents/cases/2005/08/050825compdatatech.pdf (last visited Jan. 31, 2022); FTC v. Ambus 
Registry, Inc., No. 03-cv-1294 RBL (W.D. Wa. June 16, 2003), 
available at https://www.ftc.gov/sites/default/files/documents/cases/2003/07/ambuscomp.pdf (last visited Jan. 31, 2022).
    \74\ See FTC v. Epixtar Corp., et. al., No. 03-cv-8511(DAB) 
(S.D.N.Y. Nov. 3, 2003), available at https://www.ftc.gov/sites/default/files/documents/cases/2003/11/031103comp0323124.pdf (last 
visited Jan. 31, 2022); FTC v. Mercury Marketing of Delaware, Inc., 
No. 00-cv-3281 (E.D. Pa. Aug. 12, 2003) (filing for an Order to Show 
Cause Why Defendants Should Not be Held in Contempt), available at 
https://www.ftc.gov/sites/default/files/documents/cases/2003/08/030812contempmercurymarketing.pdf (last visited Jan. 31, 2022).
    \75\ See, e.g., FTC v. Pointbreak Media, LLC, No. 18-cv-61017-
CMA (S.D. Fla. May 7, 2018), available at https://www.ftc.gov/system/files/documents/cases/matter_1723182_pointbreak_complaint.pdf 
(last visited Jan. 31, 2022); FTC v. 7051620 Canada, Inc. No. 14-cv-
22132 (S.D. Fla. June 9, 2014), available at https://www.ftc.gov/system/files/documents/cases/140717nationalbusadcmpt.pdf (last 
visited Jan. 31, 2022).
    \76\ See, e.g., FTC v. Production Media Co., No. 20-cv-00143-BR 
(D. Or. Jan. 23, 2020), available at https://www.ftc.gov/system/files/documents/cases/production_media_complaint.pdf (last visited 
Jan. 31, 2022).
    \77\ See, e.g., FTC v. DOTAuthority.com, No. 16-cv-62186 (S.D. 
Fla. Sept. 13, 2016) available at https://www.ftc.gov/system/files/documents/cases/162017dotauthoriity-cmpt.pdf (last visited Jan. 31, 
2022); FTC v. D & S Mktg. Solutions LLC, No. 16-cv-01435-MSS-AAS 
(M.D. Fla. June 6, 2016), available at https://www.ftc.gov/system/files/documents/cases/160621dsmarketingcmpt.pdf (last visited Jan. 
31, 2022).
    \78\ See Press Release, FTC, BBB, and Law Enforcement Partners 
Announce Results of Operation Main Street: Stopping Small Business 
Scams Law Enforcement and Education Initiative (June 18, 2018), 
available at https://www.ftc.gov/news-events/press-releases/2018/06/ftc-bbb-law-enforcement-partners-announce-results-operation-main 
(last visited Jan. 31, 2022).
---------------------------------------------------------------------------

    The Commission is issuing an ANPR that seeks comments on the B2B 
exemption generally, including comments addressing whether the 
Commission should remove the exemption entirely.\79\ The Commission 
recognizes requiring all B2B calls to comply with all TSR requirements 
would be a significant change that will require careful 
consideration.\80\ While that process is underway, the Commission 
proposes in this NPRM to require all B2B telemarketing calls to comply 
with the TSR's existing prohibitions on misrepresentations articulated 
in Sec.  310.3(a)(2) and (4).
---------------------------------------------------------------------------

    \79\ The ANPR is published elsewhere in this issue of the 
Federal Register.
    \80\ Among other things, it would require telemarketers to 
ensure their recordkeeping systems comply with the TSR's 
requirements, pay fees to access the National Do Not Call Registry, 
and provide mandatory disclosures in telemarketing calls. See, e.g., 
16 CFR 310.3(a)(1) (required disclosures); 310.5 (recordkeeping 
requirements); 310.8 (fee for access to the Do Not Call Registry).
---------------------------------------------------------------------------

    When the Commission issues a rule prohibiting deceptive practices 
pursuant to the Telemarketing Act, the Commission assesses whether the 
rule prohibits conduct that involves a material representation likely 
to mislead consumers acting reasonably under the circumstances.\81\ 
When the Commission included the prohibition on specific material 
misrepresentations \82\ in Sec.  310.3(a)(2) of the original TSR, the 
Commission identified these particular misrepresentations ``based on 
established case law and the Commission's policy statement on 
deception.'' \83\ The prohibition in Sec.  310.3(a)(4) on making false 
or misleading statements to induce any person to pay for goods or 
services or induce a charitable contribution was included to prohibit 
sellers ``from gaining access to consumers' money through false and 
misleading statements.'' \84\ The prohibitions in Sec.  310.3(a)(2) and 
(4) have been critical tools in the Commission's efforts to combat 
deceptive telemarketing.
---------------------------------------------------------------------------

    \81\ See 15 U.S.C. 6102(a); 2003 TSR Amendments, 68 FR at 4612. 
The Commission assesses abusive telemarketing practices using its 
traditional unfairness analysis. See, e.g., 2013 Notice of Proposed 
Rulemaking, 78 FR 41201 (July 9, 2013).
    \82\ 310.3(a)(2) prohibits, among other things, misrepresenting: 
The total cost to purchase a good or service, material restrictions 
on the use of the good or service, material aspects of the central 
characteristics of the good or service, material aspects of the 
seller's refund policy, or the seller's affiliation with or 
endorsement by any person or government agency. See 16 CFR 
310.3(a)(2)(i) through (vii).
    \83\ Original TSR at 43848. The Commission added Sec.  
310.3(a)(2)(x) in 2010. 2010 TSR Amendments, 75 FR at 48498. This 
section contains prohibitions ``related to the sale of debt relief 
services,'' which the Commission also determined are likely to be 
material and misleading.
    \84\ Id. at 43851. The Commission created a broad prohibition to 
``provide[ ] law enforcement with flexibility to address new ways 
that sellers and telemarketers engaged in fraud might attempt to 
take consumers' money.'' Id.
---------------------------------------------------------------------------

    The Commission is of the view that requiring B2B calls to comply 
with these provisions should not impose any burden on the telemarketing 
industry because Section 5 of the FTC Act generally prohibits 
telemarketers from making misrepresentations when they sell products or 
solicit charitable contributions.\85\ As noted above, the Commission is 
not, at this time, proposing B2B sellers and telemarketers comply with 
other provisions of the TSR, such as the TSR's recordkeeping 
requirements, or the requirements that

[[Page 33684]]

sellers and telemarketers access the Do Not Call Registry and pay 
fees.\86\
---------------------------------------------------------------------------

    \85\ 15 U.S.C. 45(a)(1).
    \86\ See 16 CFR 310.5 (recordkeeping requirements); Sec.  310.8 
(fee for access to the Do Not Call Registry).
---------------------------------------------------------------------------

III. Proposed Revisions

    The Commission proposes amending the Sec.  310.5 recordkeeping 
provisions to require sellers and telemarketers to maintain additional 
records of their telemarketing activities. The proposed amendments 
identify specific records that, in the Commission's law enforcement 
experience, are difficult for the Commission to obtain if the 
telemarketer or seller does not maintain these records, but are 
necessary for the Commission to ensure compliance with the TSR.
    The proposed amendments also clarify certain of the existing 
recordkeeping requirements by providing additional guidance to sellers 
and telemarketers regarding what the Commission considers a complete 
record and the penalties for failing to keep such records. In 
developing the proposed amendments, the Commission carefully considered 
the types of records sellers and telemarketers likely keep in the 
ordinary course of business, any additional burden the proposed 
amendments would impose, and the types of records the Commission 
considers necessary to enforce the TSR.
    The Commission also proposes amending the exemption for B2B 
telemarketing calls in Sec.  310.6(b)(7) to require all such calls to 
comply with Sec.  310.3(a)(2) and (4). The proposed amendments would 
provide businesses the same protections the TSR provides consumers 
against misrepresentations. Finally, the Commission proposes adding a 
definition of ``previous donor'' to effectuate its original intent in 
the 2008 TSR Amendments.
    The Commission invites written comments on the proposed amendments, 
and in particular, seeks answers to the questions set forth in Section 
IV below. The written comments will assist the Commission in 
determining whether to implement the proposed amendments and whether 
the amendments as proposed strike an appropriate balance between the 
goal of protecting consumers from deceptive and abusive telemarketing 
and harm from imposing compliance burdens.

A. New Recordkeeping Requirements

    The proposed amendments require sellers and telemarketers to retain 
new categories of information the Commission considers necessary for it 
to pursue law enforcement actions against those who have violated the 
TSR. Specifically, the proposed amendments require the retention of the 
following new categories: (1) A copy of each unique prerecorded 
message; (2) call detail records of telemarketing campaigns; (3) 
records sufficient to show a seller has an established business 
relationship with a consumer; (4) records sufficient to show a consumer 
is a previous donor to a particular charitable organization; (5) 
records of the service providers a telemarketer uses to deliver 
outbound calls; (6) records of a seller or charitable organization's 
entity-specific do-not-call registries; and (7) records of the 
Commission's DNC Registry that were used to ensure compliance with this 
Rule.\87\
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    \87\ As discussed in Sections III.A.3 and III.A.4, the proposed 
amendments requiring records of EBR or previous donor status will 
only apply if a seller or telemarketer intends to assert that a 
consumer has an EBR with the seller or is a previous donor to a 
particular charitable organization.
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1. Section 310.5(a)(1)--Substantially Different Advertising Materials 
and Each Unique Prerecorded Message
    Section 310.5(a)(1) currently requires sellers and telemarketers to 
keep records of ``all substantially different advertising, brochures, 
telemarketing scripts, and promotional materials.'' The proposed 
amendments to Sec.  310.5(a)(1) would require telemarketers and sellers 
to also keep a copy of each unique prerecorded message they use in 
telemarketing, including each call a telemarketer makes using 
soundboard technology.\88\ In the FTC's law enforcement experience, 
records of each unique prerecorded message are necessary for the 
Commission to ensure compliance with the TSR. The Commission does not 
believe keeping copies of each unique robocall will be unduly 
burdensome because the recordings are typically of short duration. For 
calls utilizing soundboard technology, the Commission is mindful such 
calls may be of longer duration than a typical robocall. As such, the 
Commission seeks comment on the burden that may be imposed by requiring 
sellers or telemarketers to keep each unique prerecorded message 
involving the use of soundboard technology, including how many 
telemarketers employ soundboard technology in telemarketing, how many 
calls they make using soundboard technology, the average duration of 
each call, and whether the telemarketer typically keeps recordings of 
such calls in the ordinary course of business.\89\
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    \88\ Soundboard technology is technology that allows a live 
agent to communicate with a call recipient by playing recorded audio 
snippets instead of using his or her own live voice. See FTC Staff 
Opinion Letter on Soundboard Technology, at 1 (Nov. 10, 2016), 
available at https://www.ftc.gov/system/files/documents/advisory_opinions/letter-lois-greisman-associate-director-division-marketing-practices-michael-bills/161110staffopsoundboarding.pdf 
(last visited Jan. 31, 2022).
    \89\ See infra Section IV.B.4.
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    The proposed amendments also clarify a copy of each substantially 
different advertising, brochure, telemarketing script, promotional 
material, and each unique robocall constitutes one record, and failure 
to keep one substantially different version of such records is one 
violation of the TSR.\90\ This provision applies to each telemarketing 
script, including robocall and upsell scripts. Telemarketers or sellers 
would be required to keep such records for 5 years from the date the 
record is no longer used in telemarketing. The Commission is proposing 
to modify this time period so it dates from the time the record is no 
longer in use to account for the possibility the advertisement may be 
in use for more than 5 years, which would exceed the proposed 
recordkeeping time period.
---------------------------------------------------------------------------

    \90\ See infra Section III.B.6 (clarifying that a failure to 
keep one record constitutes one violation of the TSR).
---------------------------------------------------------------------------

2. Sec.  310.5(a)(2)--Call Detail Records
    As discussed above, the Commission frequently has difficulty 
obtaining the call detail and other records of a seller or 
telemarketer's telemarketing activities.\91\ Ensuring the availability 
of such records is necessary to enable the Commission to adequately 
determine whether the telemarketer or seller is complying with the 
TSR.\92\
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    \91\ See supra Section II.C
    \92\ See supra Section II.C-D.
---------------------------------------------------------------------------

    To address these problems, the Commission proposes to amend the TSR 
to add Sec.  310.5(a)(2), which would require the retention of call 
detail records. Such call detail records include, for each call a 
telemarketer places or receives, the calling number; called number; 
time, date, and duration of the call; and the disposition of the call, 
such as whether the call was answered, dropped, transferred, or 
connected. If the call was transferred, the record should also include 
the phone number or IP address the call was transferred to as well as 
the company name, if the call was transferred to a company different 
from the seller or telemarketer that placed the call.
    The proposed addition of Sec.  310.5(a)(2) would require the 
retention of other records that help identify the nature and purpose of 
each call including: (1) The identity of the telemarketer who placed or 
received each call; (2) the seller or

[[Page 33685]]

charitable organization for which the telemarketing call is placed or 
received; (3) the good, service, or charitable purpose that is the 
subject of the call; (4) whether the call is to a consumer or business, 
utilizes robocalls, or is an outbound call; and (5) the telemarketing 
script(s) and robocall (if applicable) that was used in the call. 
Finally, proposed Sec.  310.5(a)(2) would require the retention of 
records regarding the caller ID transmitted if the call was an outbound 
call, including the name and phone number that was transmitted, and 
records of the telemarketer's authorization to use the phone number and 
name that was transmitted.
    As stated above, the proposed addition of Sec.  310.5(a)(2) is 
necessary for the Commission to determine whether the TSR applies to 
the calls in the telemarketing campaign and which particular sections 
of the TSR the seller and telemarketer must comply with for that 
particular telemarketing campaign.\93\
---------------------------------------------------------------------------

    \93\ See supra Section II.C.
---------------------------------------------------------------------------

    Although some consumer advocates recommended telemarketers and 
sellers should also be required to retain recordings of all their 
telemarketing calls,\94\ the Commission believes at this time, it would 
be overly burdensome to require retention of call recordings of each 
telemarketing call, particularly for small businesses. Requiring 
telemarketers and sellers to retain records of the substantially 
different telemarketing script(s) and unique robocall used in each call 
should provide the Commission with sufficient information regarding the 
content of the call, thus striking an appropriate balance between the 
Commission's interest in ensuring compliance with the TSR and avoiding 
the imposition of unnecessary burdens on businesses.
---------------------------------------------------------------------------

    \94\ See NCLC, No. 00110, at 10 (recommending that sellers keep 
recordings of all outbound calls); AARP, No.00097, at 5 (same). In 
response to the FTC's Advance Notice of Proposed Rulemaking 
Concerning the Use of Prenotification Negative Option Plans, 84. FR 
52393 (Oct. 2, 2019), a number of state attorneys general (``State 
AGs'') submitted a comment requesting amendments to the TSR to 
address negative option offers. Specifically, the State AGs 
suggested that for all negative option offers, sellers and 
telemarketers should ``record the entire transaction and retain it 
for a specified period of time and provide a full refund if the 
consumer [complains] of unauthorized charges, unless the company is 
able to provide the consumer with the recording of the phone call 
establishing the consumer's affirmative consent to be charged.'' See 
State AGs' Comment (#0082-0012), available at https://www.regulations.gov/comment/FTC-2019-0082-0012 (last visited Jan. 
31, 2022). For the reasons stated above and the reasons stated in 
Section IV.C of the Advance Notice of Proposed Rulemaking that the 
Commission is issuing simultaneously with this NPRM, the Commission 
does not believe imposing this requirement is necessary.
---------------------------------------------------------------------------

    The Commission also believes implementing this new provision should 
not be overly burdensome for telemarketers or sellers since the cost of 
electronic storage is decreasing over time.\95\ Additionally, given the 
prevalent use of technology such as autodialers in telemarketing 
campaigns, the Commission believes telemarketers likely already prepare 
similar call detail records in the regular course of business and can 
do so in an automated fashion. For the categories of information that 
may not be generated in an automated fashion, such as records of which 
script was used in the telemarketing calls, the seller's identity, or 
other information regarding the content of the call, the Commission 
believes telemarketers should be able to create a record of this 
information without much difficulty. For example, if the script 
contains information about the identity of the seller and the product 
or service being sold or the charitable purpose for which contributions 
are being solicited, the telemarketer or seller need only keep records 
of which telemarketing script is used for a particular telemarketing 
campaign.
---------------------------------------------------------------------------

    \95\ For example, electronic storage can cost $.74 per gigabyte 
for onsite storage including hardware, software, and personnel 
costs. See Gartner, Inc. ``IT Key Metrics Data 2020: Infrastructure 
Measures--Storage Analysis.'' Gartner December 18, 2019.
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3. Sec.  310.5(a)(5)--Established Business Relationship
    As discussed above, the Commission proposes adding Sec.  
310.5(a)(5) to further clarify what records a seller must keep in order 
to ``demonstrate that the seller has an established business 
relationship'' with a consumer. Specifically, for each consumer with 
whom a seller asserts it has an established business relationship, the 
seller must keep a record of the name and last known phone number of 
that consumer, the date the consumer submitted an inquiry or 
application regarding that seller's goods or services, and the goods or 
services inquired about.\96\ The Commission does not believe adding 
this provision to the recordkeeping requirements will impose any 
significant burdens on sellers or telemarketers because sellers or 
telemarketers must already collect and use this information to ensure 
they are complying with the requirements of this affirmative defense. 
They are only being asked to retain the records demonstrating their 
compliance.
---------------------------------------------------------------------------

    \96\ A seller may also show it has an established business 
relationship with a consumer if that consumer purchased, rented, or 
leased the seller's goods or services or had a financial transaction 
with the seller during the 18 months before the date of the 
telemarketing call. The Commission is modifying the existing 
recordkeeping provisions to state that records of existing customers 
should also include the date of the financial transaction to 
establish EBR under these circumstances. See infra Section III.B.3.
---------------------------------------------------------------------------

4. Sec.  310.5(a)(6)--Previous Donor
    Similar to the EBR requirements described above, the Commission 
also proposes adding Sec.  310.5(a)(6) to clarify that if a 
telemarketer intends to assert a consumer is a previous donor to a 
particular non-profit charitable organization,\97\ the telemarketer 
must keep a record, for each such consumer, of the name and last known 
phone number of that consumer, and the last date the consumer donated 
to the particular non-profit charitable organization. The Commission 
does not believe this provision will impose any new burdens on 
telemarketers since this is information a non-profit charitable 
organization already keeps and telemarketers that comply with the TSR 
will likely seek this information in the ordinary course of business.
---------------------------------------------------------------------------

    \97\ The Commission also proposes adding a new definition of 
``previous donor.'' See supra Section II.A.
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5. Sec.  310.5(a)(9)--Other Service Providers
    The Commission proposes including a new record keeping requirement 
in Sec.  310.5(a)(9) requiring sellers and telemarketers to keep 
records of all service providers the telemarketer uses to deliver 
outbound calls in each telemarketing campaign. Such service providers 
include, but are not limited to, voice providers, autodialers, sub-
contracting telemarketers, or soundboard technology platforms. The 
Commission does not intend for this provision to include every voice 
provider involved in delivering the outbound call, but limits this 
provision to the service providers with which the seller or 
telemarketer has a business relationship. For each such entity, the 
seller or telemarketer must keep records of any applicable contracts, 
the date the contract was signed, and the time period the contract is 
in effect.
    The Commission also proposes that the seller or telemarketer 
maintain such records for five years from the date the contract expires 
or five years from the date the telemarketing activity covered by the 
contract ceases, whichever is shorter. The Commission proposes that the 
telemarketer or seller maintain such records for that specified time 
period to provide the Commission and other law enforcement agencies 
sufficient time to complete any investigation of noncompliance. Such 
information is

[[Page 33686]]

necessary for the Commission to determine whether any other entities 
assisted and facilitated in violating the TSR. The Commission 
calculates the five-year period from the date the contract expires or 
the date the telemarketing activity ceases rather than the date the 
contract was signed to account for the possibility the contract could 
be of long-standing duration. The Commission does not believe this 
requirement is overly burdensome because telemarketers and sellers 
likely keep such records in the ordinary course of business.
6. Sec. Sec.  310.5(a)(10) and (11)--DNC and Entity-Specific DNC
    The NPRM also includes two new provisions requiring telemarketers 
and sellers to maintain for five years records related to the entity-
specific do-not-call registry and the FTC's DNC Registry. For the 
entity-specific do-not-call registry, the Commission proposes requiring 
telemarketers and sellers to retain records of: (1) The consumer's 
name, (2) the phone number(s) associated with the DNC request, (3) the 
seller or charitable organization from which the consumer does not wish 
to receive calls, (4) the telemarketer that made the call; (5) the date 
the DNC request was made; and (6) the good or service being offered for 
sale or the charitable purpose for which contributions are being 
solicited.
    For the FTC's DNC Registry, the Commission proposes requiring 
telemarketers or sellers to keep records of every version of the FTC's 
DNC Registry the telemarketer or seller downloaded to ensure compliance 
with the TSR. The Commission does not believe these two proposed 
recordkeeping requirements impose a substantial burden on the 
telemarketer or seller since telemarketers complying with the TSR 
already keep such records in the ordinary course of business to avail 
themselves of the TSR's safe harbor provisions.\98\
---------------------------------------------------------------------------

    \98\ 16 CFR 310.4(b)(3)(iii) and (b)(3)(iv).
---------------------------------------------------------------------------

    The Commission, however, invites public comment on whether and for 
how long telemarketers and sellers maintain records in the ordinary 
course of business of every version of the FTC's DNC Registry they 
access to comply with the TSR's safe harbor rules, and if not, whether 
requiring them to do so would be overly burdensome. The Commission also 
invites comment from other law enforcement agencies and any other 
interested parties regarding whether a record of the name of the 
telemarketer or seller who accessed the registry, the subscription 
account number used to access the registry, the telemarketing campaign 
for which it was accessed, and the date of access would suffice to 
ensure telemarketers and sellers are complying with the TSR.\99\
---------------------------------------------------------------------------

    \99\ See infra Section IV.B.9.
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B. Modification of Existing Recordkeeping Requirements

1. Time Period To Keep Records
    In this NPRM, the Commission proposes changing the time period 
telemarketers and sellers must keep records from two years to five 
years from the date the record is made, except for Sec.  310.5(a)(1) 
and (9), which require retention of records for five years from the 
date such records are no longer in use.\100\ The Commission is 
proposing to change the time period from two years to five years 
because the Commission needs adequate time to complete its 
investigations of non-compliance with the TSR. Given the additional 
complexities of identifying the telemarketer and seller responsible for 
particular telemarketing campaigns and gathering the necessary 
evidence, two years is no longer a sufficient amount of time for the 
Commission to fully complete its investigations of noncompliance. Given 
the decreasing cost of data storage, the Commission does not believe 
changing the length of time sellers and telemarketers are required to 
keep records will be unduly burdensome.
---------------------------------------------------------------------------

    \100\ The records covered by these two sections include 
advertising materials and the service providers who assisted in 
outbound telemarketing, respectively. See supra Sections III.A.1 and 
III.A.5.
---------------------------------------------------------------------------

2. Sec.  310.5(a)(3)--Prize Recipients
    The TSR currently requires telemarketers and sellers to retain the 
``name and last known address'' of each prize recipient.\101\ The 
Commission is proposing to modify this provision also to require 
sellers and telemarketers to retain the last known telephone number and 
the last known physical or email address for each prize recipient.\102\ 
The Commission is proposing this change to reflect current business 
practices in communicating with customers. The Commission does not 
believe retention of such records is unduly burdensome since 
telemarketers and sellers likely keep such information in the regular 
course of business.
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    \101\ 16 CFR 310.5(a)(2).
    \102\ The Commission proposes to modify the form of this section 
so that it aligns with the new additions to Sec.  310.5(a) but makes 
no substantive changes except adding the prize recipient's last 
known phone number and last known physical or email address as 
described above.
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3. Sec.  310.5(a)(4)--Customer Records
    The TSR currently requires sellers or telemarketers to retain the 
``name and last known address of each customer, the goods or services 
purchased, the date such goods or services were shipped or provided, 
and the amount paid by the customer for the goods or services.'' \103\ 
To account for the new requirement telemarketers and sellers keep 
records of each consumer with whom a seller intends to assert it has an 
EBR, the Commission proposes modifying Sec.  310.5(a)(4) to require the 
seller or telemarketer to keep records of the date the customer 
purchased the good or service.\104\ The Commission also proposes 
modifying Sec.  310.5(a)(4) to require the retention of the customer's 
last known telephone number and the customer's last known physical 
address or email address to account for current business practices in 
communicating with existing customers. Because the Commission believes 
sellers likely already keep records of this information in the ordinary 
course of business, the Commission does not believe these modifications 
will cause significant additional burden.
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    \103\ 16 CFR 310.5(a)(3).
    \104\ The Commission proposes to modify the form of this section 
so that it aligns with the new additions to Sec.  310.5(a) but makes 
no substantive changes except adding the date the customer purchased 
the good or service, the customer's last known phone number, and the 
customer's last known physical or email address as described above.
---------------------------------------------------------------------------

    The Commission recognizes requiring telemarketers and sellers to 
retain information regarding consumers' names, phone numbers, and 
either their email or physical addresses, in combination with the goods 
or services they have purchased, raises privacy concerns. The 
Commission emphasizes telemarketers and sellers have an obligation 
under Section 5 of the FTC Act to adhere to commitments they make about 
their information practices, and take reasonable measures to secure 
consumers' data.\105\
---------------------------------------------------------------------------

    \105\ See generally Federal Trade Commission 2020 Privacy and 
Data Security Update, available at https://www.ftc.gov/system/files/documents/reports/federal-trade-commission-2020-privacy-data-security-update/20210524_privacy_and_data_security_annual_update.pdf 
(last visited Jan. 31, 2022).
---------------------------------------------------------------------------

4. Sec.  310.5(a)(8)--Records of Consent
    Section 310.5(a)(5) of the TSR currently requires sellers or 
telemarketers to keep records of ``[a]ll verifiable authorizations or 
records of express informed consent or express agreement required to be 
provided or received under [the TSR] .'' The Commission proposes 
modifying this

[[Page 33687]]

requirement to keep records of verifiable authorizations, express 
informed consent or express agreement (collectively, ``consent'') to 
clarify what information the Commission believes is a complete record 
sufficient for a telemarketer or seller to assert such an affirmative 
defense.\106\ Specifically, for each consumer from whom a seller or 
telemarketer states it has obtained consent, the Commission proposes 
requiring sellers or telemarketers to maintain records of that 
consumer's name and phone number, a copy of the consent requested in 
the same manner and format it was presented to that consumer, a copy of 
the consent provided, the date the consumer provided consent, and the 
purpose for which consent was given and received.
---------------------------------------------------------------------------

    \106\ See supra Section II.C at 14 (a list of consumer IP 
addresses is not a complete record of consent when the Commission 
cannot tell the name of the consumer allegedly providing consent and 
cannot know the nature of the purported consent).
---------------------------------------------------------------------------

    For a copy of the consent provided under Sec.  310.3(a)(3), 
310.4(a)(7), (b)(1)(iii)(B)(1), or (b)(1)(v)(A), a complete record must 
include all of the requirements outlined in those respective sections. 
For example, a copy of the consent provided to receive prerecorded 
sales messages under Sec.  310.4(b)(1)(v)(A) must evidence, in writing: 
(1) The consumer's name, telephone number, and signature; (2) the 
consumer states she is willing to receive prerecorded messages from or 
on behalf of a specific seller; (3) the seller obtained consent only 
after clearly and conspicuously disclosing that the purpose of the 
written agreement is to authorize that seller to place prerecorded 
messages to that consumer; and (4) the seller did not condition the 
sale of the relevant good or service on the consumer providing consent 
to receive prerecorded messages.
    If the telemarketer or seller requested consent verbally, the copy 
of consent requested need not be a recording of the conversation unless 
such a recording is required by another provision of the TSR. For such 
consent requests, unless such a recording is required by another 
provision of the TSR, a copy of the telemarketing script of the request 
for consent will suffice as a complete record. The Commission does not 
believe requiring the telemarketer or seller to keep records of consent 
imposes significant additional burden since it is likely telemarketers 
and sellers who comply with the TSR already keep such records in the 
ordinary course of business.
5. Sec.  310.5(b)--Format of Records
    The NPRM includes a modification to the formatting requirements for 
records that include phone numbers, time, or duration. For such 
records, the Commission proposes to require that international phone 
numbers must comport with the International Telecommunications Union's 
Recommendation E.164 format and domestic numbers must comport with the 
North American Numbering plan. For time and duration, the Commission 
proposes such records be kept to the closest whole second, and time 
must be recorded in Coordinated Universal Time (UTC). The Commission 
does not believe specifying these format requirements will cause any 
undue burden since the numbering formats are standard practice across 
the telecommunications industry, and the proposed time and duration 
formats are widely used, so sellers and telemarketers can easily select 
them when they set up an automated method of maintaining call detail 
records.
6. Sec.  310.5(c)--Violation of Recordkeeping Provisions
    The Commission proposes clarifying that the failure to keep each 
record required by Sec.  310.5 in a complete and accurate manner 
constitutes a violation of this Rule. The Commission wants to state 
clearly that a violation does not mean a failure to keep all records, 
but instead that failure to keep each required record constitutes a 
separate violation. To do otherwise would create a perverse incentive 
for deceptive telemarketers to choose not to comply with the 
recordkeeping provisions when the only consequence would be liability 
for a single violation of the TSR. Such an outcome would negate the 
entire purpose of implementing recordkeeping requirements.
7. Sec.  310.5(d)--Safe Harbor for Incomplete or Inaccurate Records 
Kept Pursuant to Sec.  310.5(a)(2)
    The Commission proposes including a safe harbor provision for 
temporary and inadvertent errors in keeping call detail records 
pursuant to Sec.  310.5(a)(2). Specifically, a seller or telemarketer 
would not be liable for failing to keep records under Sec.  310.5(a)(2) 
if it can demonstrate: (1) It has established and implemented 
procedures to ensure completeness and accuracy of its records under 
Sec.  310.5(a)(2); (2) it trained its personnel in the procedures; (3) 
it monitors compliance and enforces the procedures, and documents its 
monitoring and enforcement activities; and (4) any failure to keep 
accurate or complete records under Sec.  310.5(a)(2) was temporary and 
inadvertent.
    The Commission believes providing a safe harbor for the 
recordkeeping requirements under Sec.  310.5(a)(2) is appropriate since 
the process of maintaining such records will likely be automated by 
technology, and telemarketers and sellers should not be held liable 
under this section of the TSR for brief and inadvertent technological 
errors so long as they make good faith efforts to comply.
8. Sec.  310.5(e)--Compliance Obligations
    The Commission also proposes modifying the compliance obligations 
in Sec.  310.5(e). In the event the seller and telemarketer fail to 
allocate responsibility for maintaining the required records, the TSR 
currently designates which recordkeeping obligations fall on the 
telemarketer and which fall on the seller. The Commission is proposing 
to modify the TSR so that if the seller and telemarketer fail to 
allocate recordkeeping obligations between themselves, the 
responsibility for complying with this Section will fall on both 
parties. This would avoid disputes between sellers and telemarketers 
over which party is responsible for recordkeeping. Also, because the 
parties may still allocate the recordkeeping obligations, the 
Commission does not believe modifying this provision would alter the 
overall burden of complying with the TSR; rather, it should incentivize 
the parties to delineate clearly their respective responsibilities.

C. Modification of the B2B Exemption

    The Commission proposes narrowing the B2B exemption to require B2B 
telemarketing calls to comply with Sec.  310.3(a)(2)'s prohibition on 
misrepresentations and Sec.  310.3(a)(4)'s prohibition on false or 
misleading statements. The Commission believes a prohibition on such 
deceptive conduct will protect businesses from illegal telemarketing 
without burdening industry since the FTC Act already prohibits 
businesses from making misrepresentations and false or misleading 
statements.

D. New Definitions

    The Commission proposes adding a new definition for the term 
``previous donor'' to implement the Commission's original intent to 
allow robocalls soliciting charitable donations on behalf of a 
particular non-profit charitable organization only to consumers who 
have an established relationship with that organization. The proposed 
definition also specifies the consumer

[[Page 33688]]

must have made a donation to the non-profit charitable organization 
within the two-year period immediately preceding the date of the 
robocall. The Commission proposes implementing a time limit for the 
existence of an established relationship and chose two years to account 
for the possibility that consumers who donate annually may not 
necessarily donate exactly one year apart (i.e., one year the consumer 
might donate in January and the following year the consumer might not 
donate until December). The Commission, however, seeks public comment 
on whether two years is an appropriate time period to use in 
determining whether the consumer has an established relationship with a 
particular organization.

E. Corrections to the Rule

    The Commission also proposes five corrections to the Rule. The 
first is a clerical correction to the cross-reference citations in 
Sec.  310.6(b)(1), (2), and (3) changing the cross-references from 
Sec.  310.4(a)(1) and (7), (b), and (c) to Sec.  310.4(a)(1) and (8), 
(b), and (c).
    The second is modifying the time requirements in the definition of 
EBR to change it from months to days. For Sec.  310.2(q)(1), the time 
requirement to qualify for EBR will be modified from 18 months between 
the date of the telephone call and financial transaction to 540 days. 
For Sec.  310.2(q)(2), the time requirement to qualify for EBR will be 
modified from three months between the date of the telephone call and 
the date of the consumer's inquiry or application to 90 days. The 
Commission is proposing these modifications to make the technical 
calculations of whether a consumer has an EBR with a particular seller 
easier to determine since the number of days to qualify would be fixed 
instead of fluctuating depending on which months were applicable.
    The third correction is to add an email address to Sec.  310.7 so 
state officials or private litigants can more easily provide notice to 
the Commission that the state official or private litigant intends to 
bring an action under the Telemarketing Act.
    The fourth correction is amending Sec.  310.5(a)(7) so it is 
consistent in form with the new proposed additions to Sec.  310.5(a). 
The substantive requirements of this section will remain the same.
    The fifth correction is amending Sec.  310.5(f) to remove an 
extraneous word. The substantive requirements of this section will 
remain the same.

IV. Request for Comment

    The Commission seeks comments on all aspects of the proposed 
requirements, including the likely effectiveness of the proposed 
requirements to combat violations of the TSR and any alternatives to 
the proposed requirements. The Commission also seeks comments on the 
estimated burden compliance with the proposed regulations will impose 
on sellers and telemarketers. In their replies, commenters should 
provide any available evidence and data that supports their position, 
such as empirical data on the costs of complying with the proposed 
amendments.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before August 2, 2022. 
Write ``Telemarketing Sales Rule (16 CFR part 310--NPRM) (Project No. 
R411001)'' on your comment. Your comment--including your name and your 
state--will be placed on the public record of this proceeding, 
including, to the extent practicable, on the https://www.regulations.gov website.
    Because of the public health emergency in response to the COVID-19 
outbreak and the agency's heightened security screening, postal mail 
addressed to the Commission will be subject to delay. We strongly 
encourage you to submit your comment online through the https://www.regulations.gov website. To ensure the Commission considers your 
online comment, please follow the instructions on the web-based form.
    If you file your comment on paper, write ``Telemarketing Sales Rule 
(16 CFR part 310--NPRM) (Project No. R411001)'' on your comment and on 
the envelope, and mail your comment to the following address: Federal 
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, 
Suite CC-5610 (Annex B), Washington, DC 20580, or deliver your comment 
to the following address: Federal Trade Commission, Office of the 
Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 
5610 (Annex B), Washington, DC 20024. If possible, please submit your 
paper comment to the Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible 
website, https://www.regulations.gov, you are solely responsible for 
making sure your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else's Social 
Security number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure your comment does not include any 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 
16 CFR 4.10(a)(2)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted publicly at www.regulations.gov--as legally required by FTC 
Rule 4.9(b)--we cannot redact or remove your comment from the FTC 
website, unless you submit a confidentiality request that meets the 
requirements for such treatment under FTC Rule 4.9(c), and the General 
Counsel grants that request.
    Visit the FTC website to read this document and the news release 
describing it. The FTC Act and other laws the Commission administers 
permit the collection of public comments to consider and use in this 
proceeding as appropriate. The Commission will consider all timely and 
responsive public comments it receives on or before August 2, 2022. For 
information on the Commission's privacy policy, including routine uses 
permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
    In addition to the issues raised above, the Commission solicits 
public comment on the list of questions below regarding the costs and 
benefits of the proposed amendments. The Commission requests that 
comments

[[Page 33689]]

provide the factual data upon which they are based. These questions are 
designed to assist the public and should not be construed as a 
limitation on the issues on which a public comment may be submitted.

A. General Questions for Comments

    1. What would be the impact (including any benefits and costs), if 
any, of the proposed amendments on consumers?
    2. What would be the impact (including any benefits and costs), if 
any, of the proposed amendments on individual firms (including small 
businesses) that must comply with them?
    3. What would be the impact (including any benefits and costs), if 
any, on industry, including those who may be affected by the proposed 
amendments but not obligated to comply with the Rule?
    4. What changes, if any, should be made to the proposed amendments 
to minimize any costs to consumers or to industry and individual firms 
(including small businesses) that must comply with the Rule?
    5. How would each change suggested in response to Question 4 affect 
the benefits that might be provided by the proposed amendment to 
consumers or to industry and individual firms (including small 
businesses) that must comply with the Rule?
    6. How would the proposed amendments impact small businesses with 
respect to costs, profitability, competitiveness, and employment? What 
other burdens, if any, would the proposed amendments impose on small 
businesses, and in what ways could the proposed amendments be modified 
to reduce any such costs or burdens?
    7. How many small businesses would be affected by each of the 
proposed amendments?
    8. With respect to each of the proposed amendments, are there any 
potentially duplicative, overlapping, or conflicting federal statutes, 
rules, or policies currently in effect?

B. Specific Questions for Comments

    1. Is 5 years an appropriate time period to require telemarketers 
and sellers to maintain records? If not, what is an appropriate time 
period and why?
    2. What are the current practices of sellers and telemarketers in 
keeping records of their telemarketing activities? How will the 
proposed amendments alter the current practices?
    3. Is the proposed requirement to retain a record of each unique 
robocall recording used in telemarketing, under Sec.  310.5(a)(1), 
overly burdensome? If so, what are the costs or burdens associated with 
keeping a record of each unique robocall recording?
    4. What are the costs or burdens associated with keeping a record 
of each call in which soundboard technology is used? How many 
telemarketers employ soundboard technology in telemarketing? How many 
calls do telemarketers make on average in one year using soundboard 
technology? What is the average duration of each call using soundboard 
technology? Do telemarketers typically keep recordings of such calls in 
the ordinary course of business? If so, how long do telemarketers 
typically keep such recordings in the ordinary course of business?
    5. Do the proposed recordkeeping requirements of 310.5(a)(2) 
adequately identify all data categories a telemarketer or seller should 
retain from the call detail records of their telemarketing activities? 
If not, what data categories are missing? Alternatively, are there data 
categories that are overly burdensome or unnecessary to ensure the 
telemarketer and seller are complying with the TSR? If the data 
categories are overly burdensome, is there an alternative proposal on 
how a telemarketer or seller can retain the information from that data 
category in a less burdensome manner?
    6. Is the proposed requirement to identify the robocall recording 
used in each call, under Sec.  310.5(a)(2), overly burdensome? If so, 
what are the costs or burdens associated with this requirement? Is 
there an alternative proposal that would still give the Commission 
information on what robocall was used in the call but is less 
burdensome for the seller or telemarketer?
    7. Does the proposed amendment to Sec.  310.5(a)(8) adequately 
describe the information the telemarketer or seller needs to retain to 
provide proof of verifiable authorizations, express informed consent, 
or express agreement? If not, what other information should the 
telemarketer or seller be required to retain to show proof of 
verifiable authorizations, express informed consent, or express 
agreement?
    8. Does the proposed amendment to Sec.  310.5(a)(8) require 
sufficient records to demonstrate whether telemarketers or sellers who 
obtain preacquired account information through data pass are authorized 
to bill consumers? If not, what other information should the 
telemarketer or seller be required to retain?
    9. Does the proposed amendment to Sec.  310.5(a)(8) sufficiently 
address any potential harms caused by telemarketers or sellers using 
preacquired account information through data pass? Does it also 
sufficiently address any new harms that have emerged since 2014 caused 
by telemarketers or sellers using preacquired account information 
through data pass? If not, what harms have emerged since 2014? What 
other changes should be made to the TSR to address harms caused by data 
pass of preacquired account information?
    10. Does the proposed amendment in Sec.  310.5(a)(9) requiring the 
telemarketer or seller to retain records of all service providers a 
telemarketer uses to deliver an outbound call provide adequate guidance 
on which service providers are referenced in this provision? If not, is 
there an alternative description that would more accurately provide 
guidance on what service providers a telemarketer or seller would need 
to retain records of as required by this provision? Would such a 
description be flexible enough to account for changes in the 
telecommunications industry, including technological developments?
    11. Should the Commission require the telemarketer or seller to 
retain records of every version of the Commission's DNC Registry that 
it downloaded to ensure compliance with the TSR or would requiring a 
record of each instance the telemarketer or seller accessed the 
registry, including the date of access, the subscription account number 
used to access, the telemarketing campaign for which it was accessed, 
and the entity that accessed the registry, be sufficient to ensure 
compliance with the TSR?
    12. Should the Commission include the safe harbor provision in 
Sec.  310.5(d) for the retention of records identified in Sec.  
310.5(a)(2)? Is such a safe harbor necessary? Alternatively, does the 
proposed safe harbor provide adequate protection to the seller or 
telemarketer against mistakes that cannot readily be prevented? Should 
the safe harbor provision apply only to records identified in Sec.  
310.5(a)(2) or should it also apply to other records required by Sec.  
310.5?
    13. Should sellers and telemarketers be allowed to decide by 
contract which entity is responsible for retaining records under this 
Rule? If not, should both sellers and telemarketers be required to 
retain records under this Rule? Alternatively, should the Commission 
specify which entity should be required to retain specific categories 
of records?
    14. Should the definition of previous donor include a two-year time 
limit

[[Page 33690]]

after which a consumer is no longer considered a previous donor to a 
particular charitable organization? If not, what is the appropriate 
amount of time that can lapse before a consumer should no longer be 
considered a previous donor to a particular charitable organization?
    15. How many calls on average do sellers and telemarketers make per 
year?
    16. What call detail records do sellers and telemarketers currently 
keep?
    17. How much do sellers and telemarketers pay to retain call detail 
records on a monthly basis?
    18. Are there other costs associated with creating and preserving 
call detail records?
    19. How many different prerecorded messages do sellers and 
telemarketers use with their campaigns and what is the file size of the 
messages?
    20. To what extent do existing recordkeeping requirements, such as 
those found under the Telephone Consumer Protection Act, overlap with 
the proposed rule's recordkeeping requirements?
    21. Are businesses harmed by deception in B2B telemarketing? Would 
requiring B2B telemarketing to comply with the TSR's prohibitions on 
misrepresentations and making false or misleading statements help 
businesses?
    22. Are businesses harmed by B2B telemarketing in ways not 
addressed by the FTC's past law enforcement work?
    23. Would the proposed amendment to the B2B exemption burden 
sellers or telemarketers? If so, in what way, and what is the burden?

V. Paperwork Reduction Act

    The current Rule contains various provisions that constitute 
information collection requirements as defined by 5 CFR 1320.3(c), the 
definitional provision within the Office of Management and Budget 
(``OMB'') regulations implementing the Paperwork Reduction Act (PRA). 
44 U.S.C. chapter 35. OMB has approved the Rule's existing information 
collection requirements through September 30, 2022 (OMB Control No. 
3084-0097). The proposed amendments will make changes in the Rule's 
recordkeeping requirements that will increase the PRA burden as 
detailed below. Accordingly, FTC staff will submit this notice of 
proposed rulemaking and the associated Supporting Statement to OMB for 
review under the PRA.\107\
---------------------------------------------------------------------------

    \107\ This PRA analysis focuses specifically on the information 
collection requirements created by or otherwise affected by the 
proposed amendments.
---------------------------------------------------------------------------

    The proposed rule contains new recordkeeping requirements and 
modifications to existing recordkeeping requirements. The new 
recordkeeping provisions would require sellers or telemarketers to 
retain: (1) A copy of each unique prerecorded message; (2) call detail 
records of telemarketing campaigns; (3) records sufficient to show a 
seller has an established business relationship with a consumer; (4) 
records sufficient to show a consumer is a previous donor to a 
particular charitable organization; (5) records regarding the service 
providers a telemarketer uses to deliver outbound calls; (6) records of 
a seller or charitable organization's entity-specific do-not-call 
registries; and (7) records of the Commission's DNC Registry that were 
used to ensure compliance with this Rule. The proposed modifications to 
the existing recordkeeping requirements would: (1) Change the time 
period for retaining records from two years to five years; \108\ (2) 
clarify the records necessary for sellers or telemarketers to 
demonstrate the person it is calling has consented to receive the call; 
and (3) specify the format for records that include phone numbers, 
time, or duration.
---------------------------------------------------------------------------

    \108\ As described above, changing industry practice including 
increased spoofing of Caller ID information has made it more 
difficult to identify the telemarketers and sellers responsible for 
particular telemarketing campaigns and has hindered evidence 
gathering. As a result, two years is no longer always a sufficient 
amount of time for the Commission to fully complete its 
investigations of noncompliance and therefore the Commission is 
proposing to increase the required retention period for 
recordkeeping under the Rule. Given the decreasing cost of data 
storage, the Commission does not believe that changing the length of 
time sellers and telemarketers are required to keep records will be 
unduly burdensome.
---------------------------------------------------------------------------

    As explained above, the Commission believes for the most part, 
sellers and telemarketers already generate and retain these records in 
the ordinary course of business. For example, to comply with the TSR, 
sellers and telemarketers must already have a reliable method to 
identify whether they have a previous business relationship with a 
customer or whether the customer is a prior donor. They must also 
access the DNC Registry and maintain an entity-specific DNC registry. 
Moreover, sellers and telemarketers are also likely to keep records 
about their existing customers or donors and service providers in the 
ordinary course of business. The proposed rule would also require 
telemarketers and sellers to keep call detail records of their 
telemarketing campaigns, but in the Commission's experience the 
technological methods sellers and telemarketers use to implement their 
campaigns can also reliably generate the records of those campaigns 
that would be required under the proposed rule.

A. Estimated Annual Hours Burden

    The Commission estimates the PRA burden of the proposed amendments 
based on its knowledge of the telemarketing industry and data compiled 
from the Do Not Call Registry. In calendar year 2021, 11,756 
telemarketing entities accessed the Do Not Call Registry; however, 536 
were exempt entities obtaining access to data.\109\ Of the non-exempt 
entities, 6,835 obtained data for a single state. Staff assumes these 
6,835 entities are operating solely intrastate, and thus would not be 
subject to the TSR. Therefore, Staff estimates approximately 4,385 
telemarketing entities (11,756--536 exempt--6,835 intrastate) are 
currently subject to the TSR. The Commission also estimates there will 
be 75 new entrants to the industry per year.
---------------------------------------------------------------------------

    \109\ See National Do not Call Registry Data Book for Fiscal 
Year 2020 (``Data Book''), available at https://www.ftc.gov/system/files/documents/reports/national-do-not-call-registry-data-book-fiscal-year-2020/dnc_data_book_2020.pdf (last visited Jan. 31, 
2022). An exempt entity is one that, although not subject to the 
TSR, voluntarily chooses to scrub its calling lists against the data 
in the Registry.
---------------------------------------------------------------------------

    The Commission has previously estimated that complying with the 
TSR's current recordkeeping requirements requires 100 hours for new 
entrants to develop recordkeeping systems that comply with the TSR and 
1 hour per year for established entities to file and store records 
after their systems are created, for a total annual recordkeeping 
burden of 4,385 hours for established entities and 7,500 hours for new 
entrants who must develop required record systems.\110\
---------------------------------------------------------------------------

    \110\ See Information Collection Activities; Proposed 
Collection; Comment Request 87 FR 23177 (Apr. 19, 2022).
---------------------------------------------------------------------------

    Because the proposed rule contains new recordkeeping requirements, 
the Commission anticipates in the first year after the proposed 
amendments take effect, every entity subject to the TSR would need to 
ensure their recordkeeping systems meet the new requirements. The 
Commission estimates this undertaking will take 50 hours. This includes 
10 hours to verify the entities are maintaining the required records, 
and 40 hours to create and retain call detail records. This yields an 
additional burden of 219,250 hours for established entities (50 hours x 
4,385 covered entities).
    For new entrants, the Commission estimates the new requirements 
will increase their overall burden for establishing new recordkeeping 
systems from 100 hours per year to 150 hours

[[Page 33691]]

per year. This yields a total burden for new entrants of 11,250 hours 
(150 hours x 75 new entrants per year).

B. Estimated Annual Labor Costs

    The Commission estimates annual labor costs by applying appropriate 
hourly wage rates to the burden hours described above. The Commission 
estimates established entities will employ skilled computer support 
specialists to modify their recordkeeping systems.
    Applying a skilled labor rate of $29.11/hour \111\ to the estimated 
50 burden hours for established entities yields approximately 
$6,384,560 in labor costs in the first year after the proposed 
amendments would take effect (4,385 respondents x $1,456).
---------------------------------------------------------------------------

    \111\ This figure is derived from the mean hourly wage shown for 
``Computer Support Specialist.'' See ``Occupational Employment and 
Wages-May 2021'' Bureau of Labor Statistics, U.S. Department of 
Labor, Last Modified March 31, 2022, Table 1 (``National employment 
and wage data from the Occupational Employment Statistics survey by 
occupation, May 2021'') available at https://www.bls.gov/news.release/ocwage.t01.htm (last visited April 5, 2022).
---------------------------------------------------------------------------

    As described above, the Commission estimates new entrants will 
spend approximately 150 hours per year to establish new recordkeeping 
systems. Applying a skilled labor rate of $29.11/hour to the estimated 
150 burden hours for new entrants, the Commission estimates the annual 
labor costs for new entrants would be approximately $327,525 (75 
entrants x $4,367).

C. Estimated Non-Annual Labor Costs

    Staff previously estimated the non-labor costs to comply with the 
TSR's recordkeeping requirements were de minimis because most affected 
entities would maintain the required records in the ordinary course of 
business. Staff estimated the recordkeeping requirements could require 
$50 per year in office supplies to comply with the Rule's recordkeeping 
requirements. Because the proposed recordkeeping requirements require 
retaining additional records, Staff estimates these requirements will 
increase to $60 per year in office supplies.
    The new recordkeeping requirements also require entities to retain 
call detail records and audio recordings of prerecorded messages used 
in calls. Staff estimates the costs associated with preserving these 
records will also be de minimis. The Commission regularly obtains call 
detail records from voice providers when investigating potential TSR 
violations, and these records are kept in databases with small file 
sizes even when the database contains information about a substantial 
number of calls. For example, the Commission received a 2.9 gigabyte 
database that contained information about 56 million calls. The 
Commission also received a 1.2 gigabyte database that contained 
information about 5.5 million calls. Similarly, audio files of most 
prerecorded messages will not be very large because prerecorded 
messages are typically short in duration. Storing electronic data is 
very inexpensive. Electronic storage can cost $.74 per gigabyte for 
onsite storage including hardware, software, and personnel costs.\112\ 
Commercial cloud-based storage options are less expensive and can cost 
around $.20 per gigabyte per year.\113\ The Commission estimates the 
non-labor costs associated with electronically storing audio files of 
prerecorded messages and call detail records will cost around $5 a 
year.
---------------------------------------------------------------------------

    \112\ See Gartner, Inc. ``IT Key Metrics Data 2020: 
Infrastructure Measures--Storage Analysis.'' Gartner December 18, 
2019.
    \113\ Amazon's storage rate for S3 Standard--Infrequent Access 
storage is $0.0125 per GB per month. Available at https://aws.amazon.com/s3/pricing/?nc=sn&loc=4 (last visited Jan. 31, 2022); 
Google's storage rate for Archive Storage in parts of North America 
is $0.0012 per GB per month. Available at https://cloud.google.com/storage/pricing (last visited Jan. 31, 2022).
---------------------------------------------------------------------------

    The Commission invites comments on: (1) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (2) the accuracy of the FTC's burden estimates, 
including whether the methodology and assumptions used are valid; (3) 
ways to enhance the quality, utility, and clarity of the information to 
be collected; and (4) ways to minimize the burden of collecting 
information. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid OMB control number.
    Written comments and recommendations for the proposed information 
collection should be sent within 30 days of publication of this 
document to www.reginfo.gov/public/do/PRAMain. Find this particular 
information collection by selecting ``Currently under Review--Open for 
Public Comments'' or by using the search function. The reginfo.gov web 
link is a United States Government website produced by OMB and the 
General Services Administration (GSA). Under PRA requirements, OMB's 
Office of Information and Regulatory Affairs (OIRA) reviews Federal 
information collections.

VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, requires that the 
Commission conduct an analysis of the anticipated economic impact of 
the proposed amendments on small entities.\114\ The RFA requires the 
Commission provide an Initial Regulatory Flexibility Analysis 
(``IRFA'') with a proposed rule unless the Commission certifies the 
rule will not have a significant economic impact on a substantial 
number of small entities.\115\
---------------------------------------------------------------------------

    \114\ 5 U.S.C. 601-612.
    \115\ 5 U.S.C. 605.
---------------------------------------------------------------------------

    The Commission believes that the proposed amendment would not have 
a significant economic impact upon small entities, although it may 
affect a substantial number of small businesses. In the Commission's 
view, the proposed amendment should not significantly increase the 
costs of small entities that are sellers or telemarketers because the 
proposed amendments primarily require these entities to retain records 
they are already generating and preserving in the ordinary course of 
business. The Commission does not believe the proposed amendments 
requiring small entities that are sellers or telemarketers to comply 
with the TSR's prohibitions on misrepresentations should impose any 
additional costs on small entities. Therefore, based on available 
information, the Commission certifies that amending the Rules as 
proposed will not have a significant economic impact on a substantial 
number of small entities, and hereby provides notice of that 
certification to the Small Business Administration (``SBA''). 
Nonetheless, the Commission has determined it is appropriate to publish 
an IRFA in order to inquire into the impact of the proposed amendments 
on small entities. The Commission invites comment on the burden on any 
small entities that would be covered and has prepared the following 
analysis.

A. Description of the Reasons the Agency Is Taking Action

    The Commission proposes amending the TSR to require telemarketers 
and sellers to maintain additional records regarding their 
telemarketing transactions. As described in Section II, the proposed 
amendments are intended to update the TSR's existing recordkeeping 
requirements so the requirements comport with the substantial 
amendments to the TSR since the recordkeeping requirements were first 
made. The requirements are

[[Page 33692]]

also necessary in light of the technological advancements that have 
made it easier and cheaper for unscrupulous telemarketers to engage in 
illegal telemarketing. The proposed amendments would also require B2B 
telemarketers to comply with the TSR's prohibition on 
misrepresentations. These amendments are necessary to help protect 
businesses from deceptive telemarketing practices. The proposed 
amendments would also amend the definition of ``previous donor'' to 
clarify that a seller or telemarketer may not use prerecorded messages 
to solicit charitable donations on behalf of a charitable organization 
unless the recipient of the call previously donated to that charitable 
organization within the last two years.

B. Statement of Objectives of, and Legal Basis for, the Proposed 
Amendments

    The objective of the proposed amendments is to update the TSR's 
recordkeeping requirements in order to assist the Commission's 
enforcement of the TSR, and to prohibit misrepresentations in B2B 
telemarketing. The legal basis for the proposed amendments is the 
Telemarketing Act, which authorizes the Commission to issue rules to 
prohibit deceptive or abusive telemarketing practices.

C. Description and Estimated Number of Small Entities To Which the Rule 
Will Apply

    The proposed amendments to the Rule affect sellers and 
telemarketers engaged in ``telemarketing,'' defined by the Rule to mean 
``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.'' \116\ As noted above, staff estimate 4,385 
telemarketing entities are currently subject to the TSR, and 
approximately 75 new entrants enter the market per year. For 
telemarketers, a small business is defined by the SBA as one whose 
average annual receipts do not exceed $16.5 million.\117\ Because 
virtually any business could be a seller under the TSR, it is not 
possible to identify average annual receipts that would make a seller a 
small business as defined by the SBA. Commission staff are unable to 
determine a precise estimate of how many sellers or telemarketers 
constitute small entities as defined by SBA. The Commission invites 
comment and information on this issue.
---------------------------------------------------------------------------

    \116\ 16 CFR 310.2(dd). The Commission notes that, as mandated 
by the Telemarketing Act, the interstate telephone call requirement 
in the definition excludes small business sellers and the 
telemarketers which serve them in their local market area, but may 
not exclude some small business sellers and telemarketers in multi-
state metropolitan markets, such as Washington, DC.
    \117\ Telemarketers are typically classified as ``Telemarketing 
Bureaus and Other contact Centers,'' (NAICS Code 561422). See Table 
of Small Business Size Standards Matched to North American Industry 
Classification System Codes, available at https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019,%202019.pdf 
(last visited Jan. 31, 2022).
---------------------------------------------------------------------------

D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements, Including Classes of Small Entities and Professional 
Skills Needed To Comply

    The proposed rule contains new recordkeeping requirements and 
modifications to existing recordkeeping requirements. The new 
recordkeeping requirements would require sellers or telemarketers to 
retain: (1) A copy of each unique prerecorded message; (2) call detail 
records of telemarketing campaigns; (3) records sufficient to show a 
seller has an established business relationship with a consumer; (4) 
records sufficient to show a consumer is a previous donor to a 
particular charitable organization; (5) records regarding the service 
providers a telemarketer uses to deliver outbound calls; (6) records of 
a seller or charitable organization's entity-specific do-not-call 
registries; and (7) records of the Commission's DNC Registry that were 
used to ensure compliance with this Rule. The proposed modifications to 
the existing recordkeeping requirements would: (1) Change the time 
period for retaining records from two years to five years; (2) clarify 
the records necessary for sellers or telemarketers to demonstrate the 
person they are calling has consented to receive the call; and (3) 
specify the format for records that include phone numbers, time, or 
duration. The small entities potentially covered by the proposed 
amendment will include all such entities subject to the Rule. The 
Commission has described the skills necessary to comply with these 
recordkeeping requirements in Section V above.

E. Identification of Duplicative, Overlapping, or Conflicting Federal 
Rules

    The Telephone Consumer Protection Act of 1991, 47 U.S.C. 227, and 
its implementing regulations, 47 CFR 64.1200 (collectively, ``TCPA'') 
contain recordkeeping requirements that may overlap with the 
recordkeeping requirements proposed by the new rule. For example, the 
proposed provision requiring sellers or telemarketers to keep a record 
of consumers who state they do not wish to receive any outbound calls 
made on behalf of a seller or telemarketer, 16 CFR 310.5(a)(10), 
overlaps to some degree with the TCPA's prohibition on a person or 
entity initiating a call for telemarketing unless such person or entity 
has procedures for maintaining lists of persons who request not to 
receive telemarketing calls including a requirement to record the 
request.\118\ The Commission's proposed recordkeeping requirements do 
not conflict with the TCPA's recordkeeping requirements because sellers 
and telemarketers can comply with both sets of requirements 
simultaneously. Moreover, in the Commission's experience, the 
recordkeeping requirements under the TCPA do not lessen the need for 
the more robust recordkeeping requirements the Commission is proposing 
to further its law enforcement efforts. The Commission invites comment 
and information regarding any potentially duplicative, overlapping, or 
conflicting federal statutes, rules, or policies.
---------------------------------------------------------------------------

    \118\ 47 CFR 65.1200(d)(3).
---------------------------------------------------------------------------

F. Significant Alternatives to the Proposed Amendments

    The Commission has not proposed any specific small entity exemption 
or other significant alternatives to the proposed rule. The Commission 
has made every effort to avoid imposing unduly burdensome requirements 
on sellers and telemarketers by limiting the recordkeeping requirements 
to records both necessary for the Commission's law enforcement and 
typically already kept in the ordinary course of business.

VII. Communications by Outside Parties to the Commissioners or Their 
Advisors

    Written communications and summaries or transcripts of oral 
communications respecting the merits of this proceeding, from any 
outside party to any Commissioner or Commissioner's advisor, will be 
placed on the public record.\119\
---------------------------------------------------------------------------

    \119\ See 16 CFR 1.26(b)(5).
---------------------------------------------------------------------------

VIII. Incorporation by Reference

    Consistent with 5 U.S.C. 552(a) and 1 CFR part 51, the Commission 
proposes to incorporate the specifications of the following standard 
issued by the International Telecommunications Union: ITU-T E.164: 
Series E: Overall Network Operation, Telephone Service,

[[Page 33693]]

Service Operation and Human Factors (published 11/2010). The E.164 
standard establishes a common framework for how international telephone 
numbers should be arranged so calls can be routed across telephone 
networks. Countries use this standard to establish their own 
international telephone number formats and ensure those numbers have 
the information necessary to route telephone calls successfully between 
countries.
    This ITU standard is reasonably available to interested parties. 
The ITU provides free online public access to view read-only copies of 
the standard. The ITU website address for access to the standard is: 
https://www.itu.int/en/pages/default.aspx.

List of Subjects in 16 CFR Part 310

    Incorporation by reference, Telemarketing, Trade practices.

    For the reasons stated above, the Federal Trade Commission proposes 
to amend part 310 of title 16 of the Code of Federal Regulations as 
follows:

PART 310--TELEMARKETING SALES RULE

0
1. The authority for part 310 continues to read as follows:

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

PART 310--[AMENDED]

0
2. In Sec.  310.2,
0
a. Revise paragraph (q)
0
b. Redesignate paragraphs (aa) through (hh) as follows:

------------------------------------------------------------------------
            Old section                          New section
------------------------------------------------------------------------
                    (aa)                                 (bb)
                    (bb)                                 (cc)
                    (cc)                                 (dd)
                    (dd)                                 (ee)
                    (ee)                                 (ff)
                    (ff)                                 (gg)
                    (gg)                                 (hh)
                    (hh)                                 (ii)
------------------------------------------------------------------------

0
c. Add new paragraph (aa).
    The revision and addition read as follows:


Sec.  310.2  Definitions.

* * * * *
    (q) Established business relationship means a relationship between 
a seller and a consumer based on:
    (1) The consumer's purchase, rental, or lease of the seller's goods 
or services or a financial transaction between the consumer and seller, 
within the 540 days immediately preceding the date of a telemarketing 
call; or
    (2) the consumer's inquiry or application regarding a good or 
service offered by the seller, within the 90 days immediately preceding 
the date of a telemarketing call.
* * * * *
    (aa) Previous donor means any person who has made a charitable 
contribution to a particular charitable organization within the two-
year period immediately preceding the date of the telemarketing call 
soliciting on behalf of that charitable organization.
* * * * *
0
3. Revise Sec.  310.5 to read as follows:


Sec.  310.5   Recordkeeping.

    (a) Any seller or telemarketer must keep, for a period of 5 years 
from the date the record is produced unless specified otherwise, the 
following records relating to its telemarketing activities:
    (1) A copy of each substantially different advertising, brochure, 
telemarketing script, and promotional material, and a copy of each 
unique prerecorded message. Such records must be kept for a period of 5 
years from the date that they are no longer used in telemarketing;
    (2) A record of each telemarketing call, which must include:
    (i) The telemarketer that placed or received the call;
    (ii) the seller or person for which the telemarketing call is 
placed or received;
    (iii) the good, service, or charitable purpose that is the subject 
of the telemarketing call;
    (iv) whether the telemarketing call is to a consumer or a business;
    (v) whether the telemarketing call is an outbound telephone call;
    (vi) whether the telemarketing call utilizes a prerecorded message;
    (vii) the calling number, called number, date, time, and duration 
of the telemarketing call;
    (viii) the telemarketing script(s) and prerecorded message, if any, 
used during the call;
    (ix) the caller identification telephone number, and if it is 
transmitted, the caller identification name that is transmitted in an 
outbound telephone call to the recipient of the call, and any contracts 
or other proof of authorization for the telemarketer to use that 
telephone number and name, and the time period for which such 
authorization or contract applies; and
    (x) the disposition of the call, including but not limited to, 
whether the call was answered, connected, dropped, or transferred. If 
the call was transferred, the record must also include the telephone 
number or IP address that the call was transferred to as well as the 
company name, if the call was transferred to a company different from 
the seller or telemarketer that placed the call;
    (3) For each prize recipient, a record of the name, last known 
telephone number, and last known physical or email address of that 
prize recipient, and the prize awarded for prizes that are represented, 
directly or by implication, to have a value of $25.00 or more;
    (4) For each customer, a record of the name, last known telephone 
number, and last known physical or email address of that customer, the 
goods or services purchased, the date such goods or services were 
purchased, the date such goods or services were shipped or provided, 
and the amount paid by the customer for the goods or services; \1\
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    \1\ 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 
part 226, compliance with the recordkeeping requirements under the 
Truth in Lending Act, and Regulation Z, will constitute compliance 
with paragraph (a)(4) of this section.
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    (5) For each consumer with whom a seller asserts it has an 
established business relationship under Sec.  310.2(q)(2), a record of 
the name and last known telephone number of that consumer, the date 
that consumer submitted an inquiry or application regarding the 
seller's goods or services, and the goods or services inquired about;
    (6) For each consumer that a telemarketer intends to assert is a 
previous donor to a particular charitable organization under Sec.  
310.2(aa), a record of the name and last known telephone number of that 
consumer, and the last date that consumer donated to that particular 
charitable organization;
    (7) For each current or former employee directly involved in 
telephone sales or solicitations, a record of the name, any fictitious 
name used, the last known home address and telephone number, and the 
job title(s) of that employee; provided, however, that if the seller or 
telemarketer permits fictitious names to be used by employees, each 
fictitious name must be traceable to only one specific employee;
    (8) All verifiable authorizations or records of express informed 
consent or express agreement (collectively, ``Consent'') required to be 
provided or received under this Rule. A complete record of Consent 
includes the following:
    (i) The name and telephone number of the person providing Consent;
    (ii) a copy of the request for Consent in the same manner and 
format in which it was presented to the person providing Consent;
    (iii) the purpose for which Consent is requested and given;

[[Page 33694]]

    (iv) a copy of the Consent provided;
    (v) the date Consent was given; and
    (vi) for the copy of Consent provided under Sec.  310.3(a)(3) or 
310.4(a)(7), (b)(1)(iii)(B)(1), or (b)(1)(v)(A), a complete record must 
also include all information specified in those respective sections of 
this Rule;
    (9) A record of each service provider a telemarketer used to 
deliver an outbound telephone call to a consumer on behalf of a seller 
for each good or service the seller offers for sale through 
telemarketing. For each such service provider, a complete record 
includes the contract for the service provided, the date the contract 
was signed, and the time period the contract is in effect. Such 
contracts must be kept for 5 years from the date the contract expires, 
or 5 years from the date the telemarketing activity that the contract 
applies to ceased, whichever period of time is shorter;
    (10) A record of each consumer who has stated she does not wish to 
receive any outbound telephone calls made on behalf of a seller or 
charitable organization pursuant to Sec.  310.4(b)(1)(iii)(A) 
including: The name of the consumer, the telephone number(s) associated 
with the request, the seller or charitable organization from which the 
consumer does not wish to receive calls, the telemarketer that called 
the consumer, the date the consumer requested that she cease receiving 
such calls, and the goods or services the seller was offering for sale 
or the charitable purpose for which a charitable contribution was being 
solicited; and
    (11) A record of each version of the Commission's ``do-not-call'' 
registry that was used to ensure compliance with Sec.  
310.4(b)(1)(iii)(B). Such record must include the date the version was 
obtained, and the seller or telemarketer who obtained that version.
    (b) A seller or telemarketer may keep the records required by 
paragraph (a) of this section in the same manner, format, or place as 
they keep such records in the ordinary course of business. The format 
for records required by paragraph (a)(2)(vii) of this section, and any 
other records that include a time or telephone number, must also comply 
with the following:
    (1) The format for domestic telephone numbers must comport with the 
North American Numbering plan;
    (2) The format for international telephone numbers must comport 
with the standard established in the ITU-T E.164;
    (3) The time and duration of a call must be kept to the closest 
second; and
    (4) Time must be recorded in Coordinated Universal Time (UTC).
    (c) Failure to keep each record required by paragraph (a) of this 
section in a complete and accurate manner, and in compliance with 
paragraph (b) of this section, as applicable, is a violation of this 
Rule.
    (d) For records kept pursuant to paragraph (a)(2) of this section, 
the seller or telemarketer will not be liable for failure to keep 
complete and accurate records pursuant to this section if it can 
demonstrate, with documentation, that as part of its routine business 
practice:
    (1) It has established and implemented procedures to ensure 
completeness and accuracy of its records;
    (2) It has trained its personnel, and any entity assisting it in 
its compliance, in such procedures;
    (3) It monitors compliance with and enforces such procedures, and 
maintains records documenting such monitoring and enforcement; and
    (4) Any failure to keep complete and accurate records was temporary 
and due to inadvertent error.
    (e) The seller and the telemarketer calling on behalf of the seller 
may, by written agreement, allocate responsibility between themselves 
for the recordkeeping required by this section. When a seller and 
telemarketer have entered into such an agreement, the terms of that 
agreement will govern, and the seller or telemarketer, as the case may 
be, need not keep records that duplicate those of the other. If by 
written agreement the telemarketer bears the responsibility for the 
recordkeeping requirements of this section, the seller must establish 
and implement practices and procedure to ensure the telemarketer is 
complying with the requirements of this section. If the agreement is 
unclear as to who must maintain any required record(s), or if no such 
agreement exists, both the telemarketer and the seller are responsible 
for complying with this section.
    (f) In the event of any dissolution or termination of the seller's 
or telemarketer's business, the principal of that seller or 
telemarketer must maintain all records required under this section. In 
the event of any sale, assignment, or other change in ownership of the 
seller's or telemarketer's business, the successor business must 
maintain all records required under this section.
    (g) The material required in this section is incorporated by 
reference into this section with the approval of the Director of the 
Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. All approved 
material is available for inspection at the Federal Trade Commission 
(FTC) and at the National Archives and Records Administration (NARA). 
Contact FTC at: FTC Library, (202) 326-2395, Federal Trade Commission, 
Room H-630, 600 Pennsylvania Avenue NW, Washington, DC 20580; or by 
email at <a href="/cdn-cgi/l/email-protection#713d181303100308311705125f161e07"><span class="__cf_email__" data-cfemail="87cbeee5f5e6f5fec7e1f3e4a9e0e8f1">[email protected]</span></a>. For information on the availability of this 
material at NARA, email: <a href="/cdn-cgi/l/email-protection#096f7b2760677a796c6a7d6066674967687b68276e667f"><span class="__cf_email__" data-cfemail="7d1b0f5314130e0d181e091412133d131c0f1c531a120b">[email protected]</span></a> or go to 
www.archives.gov/federal-register/cfr/ibr-locations.html. It is 
available from: The International Telecommunications Union, 
Telecommunications Standardization Bureau, Place des Nations, CH-1211 
Geneva 20; (+41 22 730 5852); https://www.itu.int/en/pages/default.aspx.
    (1) Recommendation ITU-T E.164: Series E: Overall Network 
Operation, Telephone Service, Service Operation and Human Factors, 
2010.
    (2) [Reserved.]
0
4. Amend Sec.  310.6 as follows:
0
a. In paragraphs (b)(1) through (3), remove the text ``Sec. Sec.  
310.4(a)(1), (a)(7), (b), and (c)'' and add, in its place, the text 
``Sec. Sec.  310.4(a)(1), (a)(8), (b), and (c)''; and
0
b. Revise paragraph (b)(7) to read as follows:


Sec.  310.6  Exemptions.

* * * * *
    (b) * * *
    (7) Telephone calls between a telemarketer and any business to 
induce the purchase of goods or services or a charitable contribution 
by the business, provided, however that this exemption does not apply 
to:
    (i) The requirements of Sec.  310.3(a)(2) and (4); or
    (ii) Calls to induce the retail sale of nondurable office or 
cleaning supplies; provided, however, that Sec. Sec.  
310.4(b)(1)(iii)(B) and 310.5 shall not apply to sellers or 
telemarketers of nondurable office or cleaning supplies.
0
5. Amend Sec.  310.7 by revising paragraph (a) to read as follows:


Sec.  310.7  Actions by states and private persons.

    (a) Any attorney general or other officer of a state authorized by 
the state to bring an action under the Telemarketing and Consumer Fraud 
and Abuse Prevention Act, and any private person who brings an action 
under that Act, must serve written notice of its action on the 
Commission, if feasible, prior to its initiating an action under this 
part. The notice must be sent to the Office of the Director, Bureau of 
Consumer Protection, Federal Trade

[[Page 33695]]

Commission, Washington, DC 20580, at <a href="/cdn-cgi/l/email-protection#f18582839f9e85989294b1978592df969e87"><span class="__cf_email__" data-cfemail="88fcfbfae6e7fce1ebedc8eefceba6efe7fe">[email protected]</span></a> and must 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 must serve the Commission with the required 
notice immediately upon instituting its action.
* * * * *

    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2022-09914 Filed 6-2-22; 8:45 am]
BILLING CODE 6750-01-P


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