51164 Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 

1 16 CFR 310. 

2 71 FR 58716 (Oct. 4, 2006). 

3 Pub. L. No. 106–229, 114 Stat. 464 (2000) 

(codified at 15 USC 7001 et seq.). 

4 Pub. L. No. 104–191, 110 Stat. 1936 (1996) 

(codified, as amended, at 42 USC 1320 et seq.). 

FEDERAL TRADE COMMISSION 

16 CFR Part 310 

RIN: 3084–AA98 

Telemarketing Sales Rule (‘‘TSR’’) 

AGENCY: Federal Trade Commission 

ACTION: Final Rule Amendments 

SUMMARY: The Commission adopts two 

final amendments to the TSR. The first 

is an amendment making explicit a 

prohibition in the TSR on telemarketing 

calls that deliver prerecorded messages 

without a consumer’s express written 

agreement to receive such calls. This 

amendment also requires that all 

prerecorded telemarketing calls provide 

specified opt-out mechanisms so that 

consumers can opt out of future calls. 

The amendment is necessary because 

the reasonable consumer would 

consider prerecorded telemarketing 

messages to be coercive or abusive of 

such consumer’s right to privacy. 

The second amendment modifies the 

method for measuring the maximum 

call abandonment rate prescribed by the 

TSR’s call abandonment safe harbor. 

The new method will permit sellers and 

telemarketers to calculate call 

abandonment rates for a live calling 

campaign over a thirty-day period, or 

any part thereof. This amendment is 

necessary because the current ‘‘per day’’ 

standard effectively precludes the use of 

predictive dialers with small calling 

lists. 

DATES: The amendments are effective 

October 1, 2008. Compliance with 16 

CFR 310.4(b)(4)(i) is required beginning 

October 1, 2008. Compliance with 16 

CFR 310.4(b)(1)(v) is required beginning 

December 1, 2008, except that 

compliance with 16 CFR 

310.4(b)(1)(v)(A) is not required until 

September 1, 2009. 

ADDRESSES: Requests for copies of these 

amendments to the TSR and this 

Statement of Basis and Purpose (‘‘SBP’’) 

should be sent to: Public Reference 

Branch, Room 130, Federal Trade 

Commission, 600 Pennsylvania Avenue, 

NW, Washington, D.C. 20580. The 

complete record of this proceeding is 

also available at that address. Relevant 

portions of the proceeding, including 

the final amendments to the TSR and 

SBP, are available at www.ftc.gov. 

FOR FURTHER INFORMATION CONTACT: 

Craig Tregillus, (202) 326–2970, 

Division of Marketing Practices, Room 

286, Bureau of Consumer Protection, 

Federal Trade Commission, 600 

Pennsylvania Avenue, NW, Washington, 

D.C. 20580. 

SUPPLEMENTARY INFORMATION: 

I. Overview and Background 

A. Overview 

This document states the basis and 

purpose for the Commission’s decision 

to adopt two proposed amendments to 

the TSR1 that were published for public 

comment on October 4, 2006.2 After 

careful review and consideration of the 

entire record of more than 14,000 

comments amassed on the issues 

presented in this rulemaking 

proceeding, the Commission has 

decided to adopt, with several 

modifications suggested by the public 

comments, an amendment making 

explicit a prohibition on prerecorded 

telemarketing calls without a 

consumer’s express written agreement 

to receive such calls. The prerecorded 

call amendment will take effect in two 

stages. The requirement that 

prerecorded calls provide an automated 

interactive keypress or voice-activated 

opt-out mechanism will take effect on 

December 1, 2008, but the prohibition 

on placing calls that deliver prerecorded 

messages without the prior express 

written agreement of the recipient to 

receive such calls will not take effect 

until September 1, 2009. 

In adopting the amendment explicitly 

prohibiting prerecorded calls delivered 

to consumers who have not agreed to 

receive them, the Commission has 

modified the proposed amendment in 

several respects as suggested by the 

public comments. The most significant 

revisions will: (1) Require sellers and 

telemarketers to provide a keypress or 

voice-activated opt-out mechanism 

promptly at the outset of any 

prerecorded message call that could be 

answered by a consumer as of December 

1, 2008; (2) Make the amendment 

applicable to prerecorded messages left 

on answering machines and voicemail 

services, requiring that any prerecorded 

message call that could be answered by 

such a device promptly disclose at the 

outset a toll-free number that a 

consumer may use to assert a request 

not to receive such calls; and (3) Permit 

sellers to obtain the consumer’s signed, 

written agreement to receive calls 

delivering prerecorded messages in any 

manner permitted by the Electronic 

Signatures In Global and National 

Commerce Act (‘‘E–SIGN Act’’ or ‘‘E– 

SIGN’’).3

Beginning on December 1, 2008, 

sellers and telemarketers will be 

required to comply with the new 

requirement to include an automated 

interactive opt-out mechanism pursuant 

to Section 310.4(b)(1)(v)(B). This 

requirement applies to calls delivering 

prerecorded messages, whether 

answered by the recipient in person, or 

answered by an answering machine or 

voicemail service. 

In addition, as of December 1, 2008, 

the Commission will terminate its 

previously announced policy of 

forbearing from bringing enforcement 

actions against sellers and telemarketers 

who, in accordance with a safe harbor 

that was proposed in November 2004, 

make calls that deliver prerecorded 

messages to consumers with whom the 

seller has an established business 

relationship (‘‘EBR’’). Nevertheless, the 

Commission has determined that sellers 

and telemarketers may continue to place 

calls that deliver prerecorded messages 

to consumers with whom they have an 

EBR, provided they do so in compliance 

with the new requirement in 

§ 310.4(b)(1)(v)(B), that prerecorded 

message calls include an automated 

interactive keypress or voice-activated 

opt-out mechanism. As of September 1, 

2009, calls that deliver prerecorded 

messages will no longer be permitted to 

be placed based solely on the existence 

of an EBR, and calls that deliver 

prerecorded messages will be permitted 

to be placed only to consumers who 

have given their prior express written 

agreement to receive such calls. 

The Commission also has decided to 

adopt two exemptions from the 

requirements of the prerecorded call 

amendment that commenters strongly 

advocated. First, all healthcare-related 

calls subject to the Health Insurance 

Portability and Accountability Act of 

1996 (‘‘HIPAA’’)4 will be exempt from 

all of the requirements of the 

amendment. Second, charitable 

fundraising calls made by for-profit 

telemarketers to members of, or 

previous donors to, a non-profit 

charitable organization on whose behalf 

the calls are placed will be exempt from 

the requirement to obtain prior consent, 

but will be required to provide an 

automated keypress or voice-activated 

opt-out mechanism and prohibited from 

calling consumers who use the 

mechanism to opt out. 

In addition, the Commission is 

adopting, without modification, an 

amendment proposed in response to a 

petition from the Direct Marketing 

Association (‘‘DMA’’) to change the 

method for measuring the maximum 

call abandonment rate prescribed by the 

TSR’s call abandonment safe harbor. 

The new method will permit sellers and 


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Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 51165 

5 Starz Encore Group, The Spoken Hub, 

Copilevitz & Canter, and SoundBite 

Communications also submitted similar requests for 

a prerecorded call safe harbor. 

6 See note 49, infra. 

7 69 FR 67287 (Nov. 17, 2004). 

8 15 USC 6101 et seq. This and other amendments 

to the original TSR resulting from a rule review 

mandated by the Telemarketing Act, 15 USC 6108, 

took effect on March 31, 2003. TSR Statement of 

Basis and Purpose (‘‘TSR SBP’’), 68 FR 4580 (Jan. 

29, 2003). 9 TSR SBP, 68 FR at 4641—45. The Telemarketing 

Act directed the Commission to prescribe rules 

prohibiting deceptive and abusive telemarketing 

acts or practices, including ‘‘a requirement that 

telemarketers may not undertake a pattern of 

unsolicited telephone calls which the reasonable 

consumer would consider coercive or abusive of 

such consumer’s right to privacy.’’ 15 USC 

6102(a)(3)(A). 

10 16 CFR 310.4(b)(4)(i)—(iv). 

11 71 FR 65762 (Nov. 9, 2006). 

12 The list of comments, including links to each 

comment submitted, is available at: (http:// 

www.ftc.gov/os/comments/tsrrevisedcallabandon/ 

index.htm.) Although the list indicates that 630 

additional comments were submitted, a few are 

duplicate submissions. E.g., Chodelski, No. 196 and 

Chodelle, No. 197; Call Command, Inc., Nos. 608, 

610; PolyMedica Corp., Nos. 604, 609. 

13 71 FR 77634 (Dec. 27, 2006). Two of the 

petitions came from healthcare-related businesses 

that use prerecorded calls as permitted by 

regulations issued by the Department of Health and 

Human Services (‘‘HHS’’) pursuant to HIPAA. 

telemarketers to calculate call 

abandonment rates for a calling 

campaign over a thirty-day period, or 

any part thereof. This amendment will 

take effect on October 1, 2008. 

B. Background 

The issues under consideration in this 

proceeding arise under the ‘‘call 

abandonment’’ provisions of the TSR. 

These issues were first presented by two 

industry petitions. The first was a 

request from Voice-Mail Broadcasting 

Corporation (‘‘VMBC’’)5 for 

modification of the amended TSR’s 

‘‘call abandonment’’ provisions to allow 

telemarketing calls that deliver 

prerecorded messages to consumers 

with whom the seller has an EBR if they 

allow consumers to opt out and meet 

certain other requirements.6 The 

second, also involving the TSR’s call 

abandonment provisions, was a petition 

from the DMA for modification of the 

method for calculating the maximum 

call abandonment rate permitted under 

the TSR. 

On November 17, 2004, the 

Commission published a Notice of 

Proposed Rulemaking (‘‘NPRM’’) to 

amend the TSR to create the safe harbor 

requested by VMBC, and sought public 

comment on that proposal and the DMA 

petition.7 The notice also announced 

that the Commission would forebear 

from bringing enforcement actions 

against sellers and telemarketers using 

EBR-based prerecorded telemarketing 

messages that comply with the proposed 

safe harbor during the pendency of the 

rulemaking proceeding. 

Section 310.4(b)(1)(iv) of the TSR 

prohibits telemarketers from 

abandoning calls. An outbound 

telemarketing call is ‘‘abandoned’’ if the 

telemarketer does not connect the call to 

a sales representative within two 

seconds of the completed greeting of the 

person who answers. Call abandonment 

is an unavoidable consequence of the 

use of ‘‘predictive dialers’’—

telemarketing equipment that increases 

the productivity of telemarketers by 

placing multiple calls for each available 

sales representative. Predictive dialers 

maximize the amount of time 

representatives spend speaking with 

consumers and minimize the time they 

spend waiting to speak with a 

prospective customer. An inevitable 

side effect of this functionality, 

however, is that the dialer will 

sometimes reach more consumers than 

can be connected to available sales 

representatives. In these situations, the 

dialer either disconnects the call 

(resulting in a ‘‘hang-up’’ call) or keeps 

the consumer connected with no one on 

the other end of the line in case a sales 

representative becomes available 

(resulting in ‘‘dead air’’). The call 

abandonment prohibition, added to the 

TSR pursuant to the Telemarketing and 

Consumer Fraud and Abuse Prevention 

Act (‘‘Telemarketing Act’’),8 is designed 

to remedy these abusive practices.9

Notwithstanding the prohibition on 

call abandonment, § 310.4(b)(4) of the 

TSR contains a safe harbor designed to 

preserve telemarketers’ ability to use 

predictive dialers, subject to four 

conditions. The safe harbor is available 

if the telemarketer or seller: (1) 

Abandons no more than three percent of 

all calls answered by a person (as 

opposed to an answering machine); (2) 

Allows the telephone to ring for fifteen 

seconds or four rings; (3) Plays a 

prerecorded message stating the name 

and telephone number of the seller on 

whose behalf the call was placed 

whenever a sales representative is 

unavailable within two seconds of the 

completed greeting of the person 

answering the call; and (4) Maintains 

records documenting compliance.10

Because consumers who receive a 

prerecorded message would never be 

connected to a sales representative, a 

telemarketing campaign that consists 

solely of prerecorded messages would 

violate § 310.4(b)(1)(iv) and would not 

meet the safe harbor requirements in 

§ 310.4(b)(4). 

In a Federal Register notice published 

on October 4, 2006, the Commission 

reviewed and analyzed the nearly 

13,600 comments submitted in response 

to the NPRM. Based on that review, the 

Commission: (1) Denied the VMBC 

request for creation of a safe harbor for 

prerecorded telemarketing calls; (2) 

Proposed an amendment to the TSR to 

make explicit the prohibition on 

prerecorded telemarketing calls that is 

implicit in the TSR’s call abandonment 

provisions; and (3) Proposed an 

additional amendment modifying the 

method for measuring the maximum 

allowable call abandonment rate 

prescribed by the TSR’s call 

abandonment safe harbor. The notice set 

forth the text of the proposed 

amendments and posed a series of 

questions on which the Commission 

sought public comment during a 30-day 

comment period, which the 

Commission subsequently extended an 

additional 40 days in response to a 

DMA petition seeking additional time, 

until December 18, 2006.11 More than 

600 additional comments were 

submitted during the comment period.12

In view of the denial of the proposed 

amendment to create a safe harbor for 

EBR-based prerecorded telemarketing 

calls, the notice also announced that the 

Commission would terminate its policy 

of forbearing from bringing enforcement 

actions against sellers and telemarketers 

using prerecorded telemarketing calls 

(‘‘forbearance policy’’) effective January 

2, 2007. In response to four petitions 

seeking an extension of the forbearance 

policy, however, the Commission 

announced in a Federal Register notice 

published on December 27, 2006, that in 

order to preserve the status quo, it 

would extend its forbearance policy at 

least until the conclusion of the 

rulemaking proceeding.13

II. The Proposed Amendment 

Regarding Calls That Deliver a 

Prerecorded Message 

The Commission has decided to adopt 

the proposed amendment with 

modifications suggested by commenters. 

As proposed, the final amendment will 

permit prerecorded message calls by or 

on behalf of a seller only to a consumer 

who has signed an express written 

agreement authorizing the seller to place 

such calls to his or her designated 

telephone number. However, the 

amendments will permit a seller to 

obtain agreements from consumers by 

any electronic means authorized by the 

E–SIGN Act. Moreover, the amendment 

will apply not only to calls answered by 

a person as proposed, but also to 

prerecorded messages left on an 

answering machine or voicemail system. 


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14 The record includes not only the comments 

submitted in response to the Commission’s request 

for public comment issued on October 4, 2006, 71 

FR at 58716, 58732–33, but also the comments 

submitted in response to the Commission’s prior 

proposal to create a safe harbor for prerecorded 

calls, which raised essentially the same issues. 69 

FR 67287 (Nov. 17, 2004). 

15 E.g., FTC v. Voice-Mail Broad. Corp., No. 2:08- 

cv-00521 (C.D. Cal. Feb. 8, 2008) ($3 million civil 

penalty, with all but $180,000 suspended due to 

inability to pay, for abandoning over 46 million 

calls, 11 million of which were directed to numbers 

on the Do Not Call Registry, and providing no optout option to consumers who answered); United 

States v. Star Satellite, Inc., No. 2:08–00797 (D. 

Nev. June 19, 2008) ($4 million civil penalty, with 

all but $75,000 suspended due to inability to pay, 

for 80 million abandoned calls from prerecorded 

message blasting); United States v. Guardian 

Commc’n., Inc., No. 4:07–04070 (C.D. Ill. Nov. 15, 

2007) ($7.8 million civil penalty, with all but 

$150,000 suspended due to inability to pay, for 

automated prerecorded message blasting to up to 20 

million numbers a day, many of which were placed 

to numbers on the Registry without an EBR, for 

abandoning calls answered by a person, and for 

failure to transmit Caller ID information); United 

States v. Craftmatic Indus., Inc., No. 07–4652 (E.D. 

Pa. Nov. 8, 2007) ($4.4 million civil penalty for 

hundreds of thousands of calls to numbers on the 

Registry, for abandoning millions of calls by failing 

to connect to a live operator, and for repeat calls 

to consumers who asked to be placed on the entityspecific Do Not Call list); United States v. Broad. 

Team, Inc., No. 6:05–1920 (M.D. Fla. Feb. 2, 2007) 

($2.8 million civil penalty, with $1.8 million 

suspended due to inability to pay, for over 64 

million abandoned calls, and 1 million calls to 

numbers on the Registry); United States v. Global 

Mort. Funding, Inc., No. 07–1275 (C.D. Cal. filed 

Oct. 30, 2007) (complaint alleging hundreds of 

thousands of calls to numbers on the Registry 

without an EBR, failing to transmit required Caller 

ID information, and abandoning calls by failing to 

connect to a sales agent); United States v. FMFG, 

Inc., No. 3:05–00711 (D. Nev. May 23, 2007) 

($900,000 civil penalty for abandoned calls and 

calls to numbers on the Registry); United States v. 

Conversion Mktn’g., Inc., No. 8:06–00256 (C.D. Cal. 

Mar. 10, 2006) ($580,000 civil penalty for 

abandoned calls and calls to numbers on the 

Registry); United States v. DIRECTV, Inc., No. 05–

1211 (C.D. Cal. Dec. 14, 2005) ($5.3 million civil 

penalty for abandoned calls and calls to numbers 

on the Registry); United States v. Braglia Mktg. 

Group, No. 04–1209 (D. Nev. Mar. 1, 2005)/United 

States v. Flagship Resort Dev. Corp., No. 1:2005–

981 (D.N.J. Feb. 22, 2005) ($1.26 million civil 

penalty for calls to hundreds of thousands of 

consumers without an EBR, and abandoned calls). 

See also 71 FR at 58724 n.90. 

16 These comments can be found at (http:// 

www.ftc.gov/os/comments/tsrcallabandon.) See 71 

FR at 58718 n.23. 

17 Attorney General of the State of Connecticut 

(‘‘CTAG’’), No. 585, at 2; Privacy Rights 

Clearinghouse (‘‘PRC’’), No. 552, at 3; AARP, No. 

593, at 3; National Consumers League (‘‘NCL’’), No. 

529, at 1. NCL states that its comment is filed on 

its own behalf and on that of the following 

consumer advocacy groups: Consumer Action, 

Consumer Federal of America, the Electronic 

Privacy Information Center, Junkbusters, Private 

Citizen, Inc., and the Privacy Rights Clearinghouse. 

NCL at 1. An additional 101 consumer comments 

appear to support the proposed amendment, but do 

not specifically refer to ‘‘prerecorded’’ calls. 

18 Barker, No. 633, at 2; see Lardner no. 168 (‘‘I 

am on both the national and state Do Not Call lists 

and STILL get these obnoxious robo calls all the 

time.’’); Gradwohl, No. 227 (‘‘The pre-recorded, 

computer generated methods being used by 

telemarketers presently, has had the effect of 

making the [Do Not Call] list meaningless’’). 

19 Perrone, No. 555 (emphasis in original). 

20 Corgard, No. 596. 

21 Williams, No. 376; cf. Miller, No. 528 (‘‘We are 

elderly, handicapped, solvent and rational. We 

don’t need storm windows, [satellite TV], 

refinancing, lower interest rates, ‘free’ trips to golf 

resorts—or hangup calls invading our privacy 24–

7’’). See also, Wall, No. 377 (receives the same 

prerecorded message from a large loan company 

that ‘‘repeats, repeats and repeats, month after 

month . . . that states I am approved for a loan that 

I don’t want and have never sought’’); Matthews, 

No. 152 (‘‘regularly’’ receives a call asking for a 

renewal of a major newspaper he ordered for one 

month two years ago); Davies, No. 242 (gets ‘‘3–4 

calls per week’’ from a Visa card issuer that has 

submitted a comment in this proceeding). 

The final amendment will require that 

any permitted call delivering a 

prerecorded message must: (1) Allow 

the consumer’s telephone to ring for at 

least 15 seconds or 4 rings before an 

unanswered call is disconnected; (2) 

Begin the prerecorded message within 2 

seconds of the completed greeting of the 

person called; (3) Disclose promptly at 

the outset of the call the means by 

which the person called may assert a Do 

Not Call request at any time during the 

message; (4) If the call could be 

answered in person, promptly make an 

automated interactive voice and/or 

keypress-activated opt-out mechanism 

available at all times during the message 

that automatically adds the telephone 

number called to the seller’s entityspecific Do Not Call list and that 

thereafter immediately terminates the 

call; (5) If the call could be answered by 

an answering machine or voicemail 

service, promptly provide a toll-free 

telephone number that also allows the 

person called to connect directly to an 

automated voice and/or keypressactivated opt-out mechanism that is 

accessible at any time after receipt of the 

message; and (6) Comply with all other 

requirements of the TSR and applicable 

federal and state laws. 

In order to reduce initial compliance 

costs and burdens, the Commission will 

defer the effective date of the 

requirement that prerecorded calls 

provide an automated interactive optout mechanism for three months, and 

the express written agreement 

requirement for twelve months, to 

ensure that the industry will have 

adequate time to prepare to comply. 

This will permit sellers and 

telemarketers to continue placing 

prerecorded calls to consumers with 

whom the seller has an EBR until the 

written agreement requirement takes 

effect. 

In addition, healthcare-related calls 

subject to HIPAA will be exempt from 

the amendment, and calls placed by forprofit telemarketers on behalf of nonprofit entities will be exempt from the 

written agreement requirement of the 

amendment but subject to the opt-out 

requirements. 

The Commission’s decision to adopt 

the proposed amendment is based on a 

careful review, consideration, and 

analysis of the entire record,14 including 

the alternatives proposed by the public 

comments and the supporting evidence 

submitted, as well as the Commission’s 

law enforcement experience.15

A. Comments Supporting the Proposed 

Amendment 

More than 13,000 consumer 

comments previously submitted in this 

proceeding opposed the creation of a 

safe harbor for prerecorded 

telemarketing calls.16 In response to the 

current proposal to prohibit such calls 

except those where a consumer has 

given his or her express written 

agreement to receive such calls, the 

Commission received comments from 9 

consumer organizations, a state attorney 

general, and some 220 consumers 

endorsing the proposed amendment.17

Four clear themes emerge from these 

comments: (1) Sellers’ self interest in 

retaining established customers is not 

enough to prevent abuse through 

excessive pre-recorded message 

telemarketing; (2) Prerecorded message 

calls are coercive and abusive invasions 

of consumer privacy; (3) Prerecorded 

messages impose costs and burdens on 

consumers; and (4) Opt-out approaches 

may not adequately protect consumers. 

1. Companies’ Reputational Interest 

Alone Does Not Prevent Abuses From 

Excessive Prerecorded Message 

Telemarketing 

Citing their personal experience, a 

number of the consumers who support 

the proposed amendment place little 

faith in industry assurances ‘‘that they 

will self regulate and not abuse their 

customers.’’18 One commenter reports 

receiving ‘‘one particular pre-recorded 

satellite TV message EVERY day, and 

usually several,’’ from a wellestablished provider.19 A second reports 

receiving prerecorded calls ‘‘every 10 

days or so . . . for many months’’ from 

a major credit card service business.20 A 

third is ‘‘deluged with pre-recorded 

calls, urging me to subscribe to cable, 

satellite, mortgage terms, credit card 

offers and other services.’’21

In light of this type of experience on 

the part of individual consumers, 

consumer advocates do ‘‘not accept the 

argument that companies will not abuse 

the EBRs that they have with 

consumers,’’ contending that there is 

‘‘no guarantee of self-restraint and every 


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22 NCL at 5–6. 

23 NCL at 2; cf. AARP at 4 (asserting that 

‘‘permitting prerecorded calls with prior written 

consent will increase the volume of telemarketing 

calls’’). 

24 PRC at 2. 

25 Id. at 3; AARP at 4–5. 

26 Wong, No. 236; see also, e.g., Donohue, No. 30; 

Calderon, No. 301; Cook, No. 320; Steans, No. 351; 

Whitley, No. 262; Pearson, No. 442. 

27 E.g., Brick, No. 309 (‘‘This reasonable 

consumer considers that *all* unsolicited calls are 

abusive of my right of privacy’’); Macdonald, No. 

232 (‘‘Please. Stop the home invasions’’); Benson, 

No. 516; Donohue, No. 300; Mathes, No. 449; 

Seabrook, No. 74; Smith, No. 174; Young, No. 330; 

Wibbens, No. 157; Weintraub, No. 202; Will, No. 

318 (‘‘[W]e are left with a feeling like the aftermath 

of rape, that we had no choice when a stranger 

accosted us in [our] sanctuary’’). Some consumers 

regard prerecorded calls as a repeated harassment 

that is abusive. E.g., Steans, No. 351; Cook, No. 320; 

Whitley, No. 262; Shaw, No. 399; Wall, No. 377. 

Several comments say that such calls are abusive 

because they create an inconvenient or disruptive 

disturbance of the peace and quiet at home. E.g., 

Lillie, No. 269; Lilly, No. 522; Thomas, No. 386; 

Walsh, No. 369. Others view prerecorded calls as 

abusive because they are a ‘‘waste of time,’’ e.g., 

Williams, No. 376; Sanders, No. 385; Casabona, No. 

559; Weintraub, No. 202; or a nuisance. E.g., Linam, 

No. 298; Lilly, No. 522;Wall, No. 377; cf. Perrone, 

No. 555 (‘‘Deliver me from pre-recorded 

marketers’’). 

28 Hui, No. 119, at 1; Abramson, No. 122 at 1. 

29 E.g., Stump, No. 200. (‘‘[T]he FTC should 

outlaw all prerecorded messages unless I give my 

written consent for such calls’’); Blanchard, No. 83; 

Chodelski, No. 196; Haagen, No. 64; Jaujoks, No. 

398; Martin, No. 25; Seabrook, No. 74. 

30 E.g., Smith, No. 174 (‘‘My experience is these 

[prerecorded] calls are often attempts to fool me 

with some type of SCAM!’’); see Weintraub, No. 202 

(prerecorded messages contain ‘‘manipulative tacky 

advertising’’); Mathes, No. 449 (prerecorded calls 

‘‘try to coerce me into buying something’’). 

31 E.g., Young, No. 330 (asserting that ‘‘these 

[prerecorded] calls are especially confusing and 

often misleading and abusive for vulnerable 

populations such as the frail elderly’’); Seabrook, 

No. 74 (concerned ‘‘about the possibility of minor 

children taking telephone calls from marketing bots 

and being unable to assess that the call is an 

unsolicited attempt at marketing’’); Wall, No. 377 

(worried that repeated calls he receives stating he 

has been approved for a loan could be accepted by 

a child by ‘‘simply pressing a certain number on the 

dial’’). 

32 NCL at 4–5. NCL observes that while 

‘‘prerecorded calls today generally require the 

consumer to call back and speak to a live 

salesperson to make a transaction,’’ there is nothing 

to prevent the use of fully automated prerecorded 

calls ‘‘in the not-too-distant future.’’ See also, 

Wibbens, No. 157 (‘‘Allowing pre-recorded 

telemarketing calls that require the consumer to 

follow certain prompts in order to indicate the ‘Do 

Not Call’ status may increase the frequency of 

people being victimized by marketing schemes’’). 

33 PRC at 2; see NCL at 2; AARP at 4. 

34 PRC at 2; NCL at 2. 

35 PRC at 2; NCL at 1; AARP at 2. AARP notes 

that 62 percent of the respondents in a 2005 survey 

it conducted of consumers with telephone numbers 

listed on the Registry said they received more 

telemarketing calls than they would like, whereas 

only 2 percent received fewer than they would like. 

AARP at 3, 4. AARP also reports that when asked 

to respond to the question, ‘‘[o]verall, which phrase 

best describes telemarketing,’’ a total of ‘‘84 percent 

[of the respondents] said it was either ‘‘‘irritating’

(62%) or ‘invades my privacy’ (32%)’’ whereas 

‘‘less than 1% of the respondents (0.4%) responded 

that telemarketing ‘is a great way to hear about new 

products and services.’’’ AARP at 5–6. 

36 NCL at 5; AARP at 5. Neither of the other two 

consumer advocates suggests that prerecorded calls 

provide more than a minimal consumer benefit. 

CTAG at 2; NCL at 5. 

37 NCL at 5 (adding that ‘‘the surge of prerecorded 

political messages that many of us endured during 

the recent election cycle is only a preview of the 

deluge that is likely to be unleashed if prerecorded 

sales calls are allowed’’). Although political calls 

are not placed for the purpose of inducing 

purchases of goods or services, and therefore are not 

‘‘telemarketing’’ within the meaning of the TSR, 16 

CFR 310.2(cc), or the Telemarketing Act, 15 USC 

6106(4), some 30 consumer comments complained 

about prerecorded political calls received during 

the 2006 election. E.g., Baldwin, No. 434; Hetsko, 

No. 326; Pless, No. 139. 

reason to believe that the economic 

incentives for using prerecorded sales 

calls will lead to an increase from the 

current level of sales calls’’ because 

‘‘[n]ew entrants in the marketplace will 

be motivated to use this technology to 

reach as many consumers as possible 

and established companies will use it to 

try to retain their market share.’’22 They 

point out that the savings in labor costs 

that can be realized by substituting 

prerecorded calls for sales agent calls 

are not simply theoretical. They argue 

that the potential for these real savings 

suggests prerecorded calls likely will 

increase if they are permitted. As NCL 

put it, ‘‘if [prerecorded message 

telemarketing] wasn’t so attractive, the 

telemarketing industry would not be 

pressing so vigorously for its use to be 

sanctioned.’’23 Another advocate 

concludes that ‘‘[c]onsumer comments, 

when combined with the Commission’s 

record of enforcement actions, confirm 

that the telemarketing industry is not 

one that can effectively police itself.’’24

Two consumer groups therefore urge the 

Commission to go further than the 

proposed amendment does and 

completely ban all prerecorded calls.25

2. Prerecorded Calls Are Coercive and 

Abusive Privacy Invasions 

Consumers are adamant that 

prerecorded calls are abusive of their 

privacy. A typical expression of this 

view is that, ‘‘I consider myself to be a 

‘reasonable’ consumer and I do consider 

prerecorded telemarketing sales calls 

abusive to my privacy rights.’’26 A 

number of comments object that 

prerecorded calls are uninvited and 

unwanted abusive invasions into the 

private sanctuary of consumers’

homes.27

Other consumers find prerecorded 

calls not only abusive, but coercive,28

and therefore support the proposed 

amendment.29 Several consider 

prerecorded calls as manipulative 

attempts to trick them into making a 

purchase.30 Others express concern that 

prerecorded calls confuse and mislead 

vulnerable populations such as the 

elderly and young children.31 Consumer 

groups warn that there is a ‘‘potential 

for large numbers of consumers to be 

victimized’’ by coercive marketing 

pitches ‘‘given the trend toward 

negative-option marketing and the use 

of preacquired account numbers,’’

because prerecorded calls ‘‘are by their 

very nature one-sided conversations,’’

and ‘‘if there is no opportunity for 

consumers to ask questions,’’ offers 

‘‘may not be sufficiently clear for 

consumers to make informed choices’’

before pressing a button or saying ‘‘yes’’

to make a purchase.32

Consumer groups assert that 

consumers find EBR-based prerecorded 

messages ‘‘coercive or abusive’’ of their 

privacy because ‘‘[f]or years and at every 

opportunity, consumers have weighed 

in against all manner of unwanted 

telemarketing calls, whether from ‘live’

callers, prerecorded messages or 

[abandoned call] hang-ups.’’33 They 

emphasize that the record contains 

overwhelming evidence of consumer 

aversion to prerecorded message calls, 

citing the more than 13,000 consumer 

comments previously received,34 and 

the number of telephones listed in the 

National Do Not Call Registry (now 

more than 150 million) as evidence of 

continuing public outrage over 

unwanted calls and consumers’ desire 

to preserve their privacy.35

Two of the consumer group comments 

also stress that the value to consumers 

of prerecorded sales calls is ‘‘minimal’’

or ‘‘negligible’’ compared to the harm 

such calls inflict on their privacy.36

While acknowledging that some 

consumers ‘‘might find it easier to hang 

up on recorded sales calls than live 

ones,’’ NCL points out that ‘‘they would 

still have to answer when their phones 

ring, and it is likely that they would be 

running to answer their phones much 

more frequently.’’37

3. Prerecorded Messages Impose Costs 

and Burdens on Consumers 

Comments that support the proposed 

amendment cite both direct and indirect 

costs consumers incur from the receipt 

of prerecorded messages—wholly apart 

from their loss of privacy and 

consumers’ subsidization of such calls 

through payments for their telephone 

service. NCL notes that with ‘‘the 

ubiquitous use of cell phones’’ the cost 

to consumers of listening to unwanted 

prerecorded sales messages on their cell 

phones ‘‘would put consumers at an 

economic disadvantage’’ when they 

access their voicemail or answering 

machines remotely or forward landline 


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38 NCL at 4. Although FCC regulations 

promulgated under the TCPA prohibit both live and 

prerecorded calls made to cell phones, pagers, and 

fax machines, where the called party will be 

charged for the call, 47 CFR 64.1200(a)(1)(iii), (a)(3), 

NCL limits its argument to situations where 

consumers incur costs from forwarding landline 

calls to a cell phone or from calling long distance 

while traveling to listen to messages on their home 

voicemail or answering machine. 

39 Farrow, No. 365; NCL at 4; cf. Hooper, No. 331; 

Khitsun, No. 546; Munoz, No. 612. 

40 Scott, No. 362. This commenter does not 

indicate whether he incurs long-distance charges to 

retrieve the prerecorded messages from his 

answering machine. 

41 Pohl, No. 389; see House, No. 424 (‘‘I have a 

phone so I can keep in touch with friends and 

family. . . . I do not want to pay for phone service 

so companies can use it for their convenience in 

their marketing efforts’’); Casabona, No. 559; 

Mathes, No. 449; Scott, No. 362. 

42 Walker, No. 52 (‘‘I think folks that agree to 

receive telemarketing calls should be compensated 

for their time. That would be similar to Pay-PerClick advertising.’’); Barnes, No. 560; see Khitsun, 

No. 546 (‘‘Who would like to buy a product from 

someone who calls them at their own expense?’’). 

43 Snell, No. 210 (noting that merchants will be 

unable to contact him by telephone with important 

information, such as safety recalls, because 

prerecorded calls have ‘‘forced me to either not give 

out my phone number or to provide a false number’’

when making purchases); Lepeska, No. 412 (relating 

that her 86-year-old mother frequently does not 

answer her prepaid calling card calls, which 

identify her as an ‘‘unknown caller,’’ because her 

mother ‘‘thinks it might be a sales call’’); cf. 

Robertson, No. 264 (‘‘I have family who use prepaid 

calling cards and so must answer calls from 

numbers I do not recognize, as they may be 

family’’). 

44 Palicki, No. 260 (‘‘Your husband goes down 

with a heart attack and you can’t get the recording 

to disconnect. These are actual issues’’); see 

Casabona, No. 559 (Prerecorded calls ‘‘frequently 

result in one being unable to clear the line until the 

recording is over (you can hang up and pick up and 

the recording is still there)’’). Two of the comments 

from consumer advocates also express concern that 

prerecorded messages may prevent access to a 

telephone line in an emergency. CTAG at 2; NCL 

at 5. The Commission has acknowledged that this 

‘‘creates legitimate cause for concern.’’ 71 FR at 

58723. 

45 Haddox, No. 549. 

46 AARP at 4. AARP is correct in implying that, 

as proposed, the amendment did not provide 

expressly that an agreement to receive prerecorded 

messages, once given, would remain subject to the 

company-specific opt-out requirements of the TSR, 

and also did not require an effective keypress optout mechanism for consumers who agree to receive 

such messages but subsequently change their mind. 

47 AARP at 5. 

48 NCL at 4; cf. Thomas, No. 386 (reporting that 

after receiving over 20 prerecorded solicitations in 

30 days, she had to pay her telephone company 

‘‘over $1.50 per trace’’ in order to identify the 

offending telemarketer). NCL also notes that 

keypress technology ‘‘would obviously not work for 

people who still have rotary dials, and that ‘‘if the 

opt-out request requires talking to a live company 

representative,’’ there is ‘‘no assurance that one will 

be readily available.’’ NCL at 4. 

49 Pursuant to a non-enforcement policy 

announced by the Commission when it proposed 

the safe harbor requested by VMBC in its petition, 

sellers and telemarketers placing calls in 

compliance with the proposed safe harbor to deliver 

prerecorded messages to consumers with whom the 

seller has an EBR have not risked enforcement 

action. 69 FR at 67290; 71 FR at 77635 (extending 

the policy in response to several industry requests). 

Under that policy, prerecorded calls have been 

permitted if, among other things, a keypress opt-out 

mechanism or other means is provided at the outset 

of the call for consumers to add their telephone 

number to the seller’s company-specific Do Not Call 

list. 

50 Lardner, No. 168 (‘‘It is not enough to have an 

opt-out feature (which many robo callers do not 

offer)’’ because ‘‘[w]hen I try to speak to a human 

to get me off the calling list, the person just hangs 

up on me’’); Corgard, No. 596 (a prerecorded call 

‘‘will give you the option of being deleted from 

their list by pressing a certain number,’’ but ‘‘[t]his 

never works’’ because ‘‘the recording said it is an 

incorrect prompt,’’ and ‘‘[i]f you press the key to 

talk to a representative, before you can finish 

explaining that you are on the federal list, they 

simply hang up on you’’); Anonymous, No. 222 (‘‘I 

also keep getting pre-recorded calls where the 

phone number given in the messages is not the 

same as the Caller ID phone number. When I call 

the Caller ID phone # to complain, I never reach a 

person. When I call the phone # from the prerecorded message, I get a sales person who ‘can’t’

put me on the company’s internal Do not Call/Mail, 

etc lists’’); Abramson, No. 122, at 2. 

51 Cook, No. 320 (‘‘I consistently receive . . . 

prerecorded messages that are for another person . . . 

every day’’ and they ‘‘do not allow me to opt out 

of the calling list because they are calling the wrong 

person’’); see Johnson, No. 532; Thomas, No. 386 

(‘‘Even if you do choose to opt out, it takes weeks 

for it to go into effect, when it should be 

immediate’’); Bankston, No. 382 (‘‘[W]ith ID theft 

out there I should not have to identify who I am 

to be removed from their call list’’); but see Rosato, 

No. 156 (arguing that ‘‘authentication’’ of the optout requestor is necessary to prevent others in his 

household from ‘‘inadvertently’’ opting him out). 

52 Byrne, No. 158 (‘‘deluge’’ of prerecorded calls 

makes consumers so ‘‘impatient’’ that they hang up 

before hearing opt-out options, even if they are 

provided at the outset of a message). 

calls to their cell phones.38 One 

consumer says that she often forwards 

calls when away from home to her 

cellular telephone, and ends up ‘‘paying 

airtime for unwanted calls’’ when she 

receives a prerecorded message.39

Another notes that while traveling on 

business, he depends on his home 

message machine to record important 

calls, but that ‘‘[o]n any given trip, 10% 

of the space is taken up by those useless 

[prerecorded] calls.’’40

A number of consumers object to 

prerecorded and other telemarketing 

calls taking a ‘‘free ride’’ on the 

telephone service they pay for, and 

interfering with its intended use. They 

contend that they pay for a telephone to 

provide a ‘‘communication device for 

my family, friends and work,’’41 and 

object to the hijacking of their telephone 

service to transmit unsolicited 

advertisements, particularly when they 

receive no compensation in return.42

Several comments also suggest that 

prerecorded calls may be frustrating the 

original purpose of telephone service, 

and diminishing its value to 

consumers.43

Finally, several comments cite 

potential indirect safety costs. A police 

detective asserts that the fact that 

prerecorded calls do not disconnect 

‘‘creates a serious problem should you 

need immediate access to your phone 

for a 9–1–1 call.’’44 Similarly, a 

consumer reports that after he hangs up 

on a prerecorded message from a 

company that calls at least once a 

month, ‘‘the recording sometimes 

continues, and occasionally calls me 

right back to finish the message.’’45

4. Opt-out Approaches May Not 

Adequately Protect Consumers 

In anticipation of industry arguments 

that prerecorded calls with automated 

keypress opt-out mechanisms should be 

allowed, AARP, NCL, and individual 

consumers highlight the problems of 

opting out from prerecorded sales calls. 

AARP emphasizes that under the 

proposed amendment, seniors and 

others will be harmed if they ‘‘initially 

determine [prerecorded sales] calls 

would be of interest’’ and agree to 

receive them, because ‘‘if a consumer 

subsequently decides to change their 

‘opt-in’ with the seller it will be 

confusing, and possibly difficult . . . [to 

retract it] without a live person to speak 

with.’’46 AARP also notes that it will be 

more difficult for consumers to ‘‘just 

hang up’’ when they receive 

prerecorded sales calls, because they 

first will need to determine whether the 

call is one they have agreed to receive.47

NCL argues that interactive opt-out 

technologies provide no guarantee that 

consumers will be able to halt repeated 

prerecorded calls that are abusive. NCL 

emphasizes that ‘‘if the opt-out is 

automatic,’’ consumers will be unable to 

‘‘ask questions about why they have 

received the call’’ or to obtain 

information ‘‘that would help them 

determine whether the call may have 

violated their rights’’ so that they can 

report the violation for law enforcement 

action.48

Several comments from individual 

consumers assert that the opt-out 

options in the prerecorded messages 

they have experienced are burdensome 

and ineffective.49 Consumers report 

problems with both live and automated 

opt-out mechanisms.50 Some cite 

individual company policies that have 

prevented them from adding their 

number to a Do Not Call list, or that they 

find objectionable.51 One comment 

observes that the ‘‘deluge’’ of 

prerecorded calls renders interactive 

opt-out options ineffective because it 

makes ‘‘consumers impatient, and they 

hang up before they can hear how to get 

on the ‘do not call’ list, even if 

instructions on how to do so are left at 

the beginning of the message.’’52


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53 Combined with the 77 consumer comments 

arguably supporting a safe harbor for prerecorded 

calls received in the prior proceeding, 71 FR at 

58721 & n.57, these comments represent less than 

2 percent of the 14,000 consumer comments in the 

record. 

54 Consumer Bankers Association (‘‘CBA’’), No. 

587, at 2. Another contends that ‘‘[n]one of the 

comments objects per se to all calls from businesses 

with which the consumer has an existing business 

relationship,’’ and concludes that the record does 

not support the elimination of EBR-based 

prerecorded calls, but would support a narrowing 

of the EBR definition for such calls. Voxeo Corp. 

(‘‘Voxeo’’), No. 621, at 8,10 (emphasis in original). 

In a similar vein, some industry comments urge that 

consumer comments that ‘‘focus on calls already 

prohibited’’ by the TSR should be disregarded. 

DMA, No. 589, at 5; IAC/Interactive Corp. and HSN 

LLC (‘‘IAC’’), No. 600, at 4; Call Command, Inc. 

(‘‘Call Command’’), Nos. 608, 610 at 4. Other 

industry comments assert that the 13,000 consumer 

comments opposing a safe harbor for telemarketing 

calls delivering prerecorded messages to established 

customers should be discounted because they ‘‘do 

not fully or accurately describe the marketplace.’’

DMA at 5; VMBC, No. 583, at 1–2 (record not a ‘‘fair 

representation’’ of all consumers). 

55 Soundbite Communications, Inc. 

(‘‘Soundbite’’), No. 575, at 16–17; DMA at 5; IAC 

at 4; Valley Technology Consultants (Monion) 

(‘‘Valley’’), No. 39, at 1; Interactive Agent 

Association (‘‘IAA’’), No. 568, at 11; MP Marketing 

Services, Inc. (‘‘MP’’), No. 562 at 2; SmartReply, Inc. 

(‘‘SmartReply’’), No. 105, at 5–6; MinutePoll, LLC 

(‘‘MinutePoll’’), No. 540, at 7; Xpedite Systems, LLC 

(‘‘Xpedite’’), No. 595, at 4. 56 Soundbite at 4–5; IAA at 2, 4; IAC at 4; cf. CBA 

at 2 (urging disregard of prior consumer comments 

‘‘not directed at the proposal to create an EBR-based 

safe harbor for prerecorded telemarketing calls’’). 

See also, Chrysalis Software, Inc. (Ramsay), No. 79 

(‘‘[T]he focus of [FTC] attention should be calls 

generated from companies unknown to the callee, 

such as those that have purchased a phone 

directory’’); Zucker at 1 (Proposed amendment 

intended to stop ‘‘voice blasting’’ by ‘‘phone 

spammers’’ goes too far in covering EBR-based 

prerecorded calls). 57 IAA at 4 n.4. See, e.g., Castellon, No. 471; 

Castro-Arellano, No. 472; Manley, No. 112. 

58 Soundbite at 5, 10–11. See also VMBC at 1; 

DMA at 5; IAC at 3 (noting that it still may be true 

that ‘‘consumers generally have had only limited 

experience with prerecorded messages that provide 

a simple opt-out mechanism’’). 

59 Soundbite at 6. 

60 IAA at 6; cf. Xpedite at 5 (asserting that 

because of differences between the FCC rule 

permitting prerecorded calls to EBR customers and 

the proposed amendment, consumers will have ‘‘no 

clear picture of when and for whom an EBR permits 

a prerecorded telemarketing call, and when and for 

whom it does not’’); DMA at 6. 

61 VMBC at 2; Capelouto Termite & Pest Control, 

Inc. (‘‘Capelouto’’), No. 131, at 1; National 

Newspaper Association (‘‘NNA’’), No. 578, at 4 

(providing consent more burdensome than receipt 

of a prerecorded reminder message about an 

expired subscription); SmartReply at 17; IAC at 9 

& n.15; IAA at 5 n.5; see DMA at 5. Consumers who 

oppose the proposed amendment also criticize the 

requirement of an express written agreement as 

burdensome, e.g., Kelly, No. 457; Maruca, No. 602; 

Schmitz, No. 520; a ‘‘pain,’’ e.g., Carnes, No. 451; 

Rososer, No. 426, or ‘‘a waste of time.’’ E.g., Lemkin, 

No. 31; see Martin, No. 437 (‘‘big burden on my 

time’’). 

62 CenterPost Communications (‘‘CenterPost’’), 

No. 591, at 1. 

63 Soundbite at 9; SmartReply at 18. This problem 

may be minimized by FCC regulations requiring 

Local Number Portability and Wireless Number 

Portability. 

64 MP at 2; Career Education Corp. (‘‘Career’’), No. 

580, at 3. Other comments, apparently not 

considering the flexibility ensured by E–SIGN, 

incorrectly argued that this requirement would be 

‘‘impractical’’ or would not work when consumers 

call for information. DMA at 5; MinutePoll at 1, 9; 

Soundbite at 9; IAC at 9; MP at 2; Bernhardt at 1. 

65 These comments also assume that the required 

written agreement must be obtained on paper. IAC 

at 9–10 (a direct mail piece to obtain a written 

agreement from HSN’s ‘‘millions’’ of EBR customers 

on a postage paid postcard would cost $.75 to $1.75 

per customer and ‘‘will be a lengthy, resourceintensive endeavor’’). See also SmartReply at 17–19 

(estimating a cost of $9,350,000 for a ‘‘Top 100 

Retailer’’ in the ‘‘Fortune 500‘‘ with a database of 

15 million customers to obtain such agreements via 

direct mail, a cost of $360,000 to $600,000 to revise 

and reprint 3–5 million credit card and loyalty 

applications, with ‘‘at best’’ a reduction in EBR 

customer databases of ‘‘90% or more’’); DMA at 5. 

Individual commenters opposed to the proposed 

amendment cite the burden on business of 

complying. E.g., Cook, No. 631; Hunley, No. 644; 

Simmons, No. 507. 

B. Comments Opposing the Proposed 

Amendment 

Comments from 73 telemarketers, 

businesses that use prerecorded calls, 

their trade associations and technology 

providers overwhelmingly opposed the 

proposed amendment, as did 187 of the 

consumer comments.53 These comments 

primarily follow three lines of 

argument: (1) They question the 

reliability of the thousands of comments 

received earlier in this proceeding as 

indicative of consumer aversion to 

telemarketing calls that deliver a 

prerecorded message; (2) They point to 

surveys that purportedly show that 

some portion of the consuming public 

welcomes telemarketing calls that 

deliver prerecorded messages; and (3) 

They rely on data concerning consumer 

responses when opt-outs are provided 

in prerecorded message telemarketing 

calls. 

1. Previous Comments Inaccurately 

Reflect Consumer Attitudes 

One industry comment argues that ‘‘a 

substantial number’’ of the 13,000 

consumer comments opposing a 

prerecorded call safe harbor should be 

disregarded because they express 

dissatisfaction over ‘‘the fact that some 

telemarketing calls continue to be 

permitted at all’’ or over the breadth of 

the EBR definition.54 Other industry 

comments argue that complaints about 

calls from companies with which the 

consumer has no EBR, company-specific 

Do Not Call mechanisms that do not 

work, and non-compliance with the 

Commission enforcement forbearance 

policy should be addressed by 

aggressive enforcement, not tighter rules 

that might limit legitimate EBR-based 

prerecorded telemarketing messages.55

Yet other industry comments contend 

that the Commission should disregard 

consumer comments that 

indiscriminately lump EBR-based 

telemarketing calls delivering a 

prerecorded message together in the 

same hated category as ‘‘cold call’’

message blasting.56 Some of these 

comments see an indication of some 

level of consumer support for an EBR 

exemption because a handful of earlier 

consumer comments do distinguish 

between voice blasting and EBR-based 

prerecorded message calls, and do not 

object to the latter.57

A few industry comments assert that 

consumers who previously opposed 

prerecorded telemarketing were 

responding largely to their experience 

with ‘‘indiscriminate ‘blast’

telemarketing’’ calls that lacked the type 

of interactive opt-out mechanisms 

available now.58 According to one of 

these comments, ‘‘to the extent [it] may 

have been the case in 2004’’ that 

consumers felt ‘‘powerless to make 

themselves heard’’ by a prerecorded 

message, ‘‘it is not the case today.’’59

2. The Proposed Amendment Would 

Burden Sellers and Consumers 

Several comments protest that 

requiring an agreement in writing to 

receive calls delivering prerecorded 

messages would be confusing to 

consumers who are used to receiving 

these messages.60 According to these 

commenters, the requirement would be 

a major inconvenience for consumers.61

Others argue that the express written 

agreement requirement would not be in 

the best interests of consumers who may 

not realize the importance of making the 

extra effort to opt in to receive 

important messages in the distant 

future,62 consumers who change phone 

numbers,63 and consumers who must 

make a ‘‘double opt-in’’ when they call 

for information to authorize a follow-up 

return call with the information 

requested.64

Other industry comments cite the 

burden and cost of contacting each 

person in existing EBR customer 

databases to obtain their agreement to 

receive prerecorded calls.65 Several 

comments also emphasize the 

continuing costs of obtaining consent 

from new customers after the proposed 


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51170 Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 

66 IAC at 9 n.17 (contending that ‘‘even if 

companies design systems to seek and obtain 

consent in a compliant manner when consumers 

place orders by telephone, such systems also 

involve significant costs,’’ and that ‘‘[i]n addition to 

design, recordation and retention costs, each 

customer contact would take more time,’’

necessitating the ‘‘need to employ additional 

personnel or risk dropped calls’’); Career at 3 (costs 

would increase by $3.58 million a year); 

SmartReply at 41 (on-going costs would not be de 

minimis because National Retail Federation 

research shows that ‘‘retail companies face a 

customer attrition rate of between 33% and 50% 

per year’’). See also IAA at 5–6); NNA at 4; Call 

Command at 5; MinutePoll at 9; cf. Nolte, No. 429 

(objecting that the cost of obtaining consent would 

be ‘‘a waste of time and money that could go to 

passing on additional savings to me’’). Two 

individual comments also doubt that it would be 

practical for businesses to keep the required written 

agreements on file. Bender, No. 62; Haas, No. 76. 

67 SmartReply at 20–21(loss of revenue from need 

to use less efficient marketing alternatives than 

current $10.00 gross return for every dollar of 

prerecorded message marketing, loss of brand value 

and customer ‘‘goodwill’’ that would devalue stock 

prices of publicly traded retailers); MinutePoll at 9 

(cost of retrieving paper records now ordinarily 

destroyed after entry of information in EBR 

database would be especially burdensome and 

expensive); National Newspaper Association 

(‘‘NAA’’), No. 578, at 10–11 (noting that 20 percent 

of the newspaper industry has its own prerecorded 

call equipment that would be of limited use given 

difficulty of obtaining consumer consent). 

68 SmartReply at 17 (Interactive message calls 

‘‘run about 20% of the cost of the next best 

medium—direct mail’’); Call Command at 3–4 

(Direct mail costs are ‘‘ten times higher’’); Career at 

1 (Prerecorded call response rates are ‘‘more than 

twice as high as for communications by mail’’) 

(emphasis in original); IAC at 5; Compton (‘‘Vontoo 

CEO’’), No. 47, at 1; MinutePoll at 10. See also 

SmartReply, Inc., ‘‘Measuring and Deducing 

Consumer Acceptance of Live Pre-recorded Calls 

with Prompt Opt-Out Mechanisms Across Ten 

Companies over Eight Months’’ (‘‘SmartReply 

Study’’), No. 106, at 11 (stating that a comparison 

of 82 client campaigns shows similar response rates 

for direct mail and prerecorded calls, but customers 

responding to the calls out-spent those responding 

to direct mail ‘‘by 175%’’). 

69 IAA at 1 n.2 (a prerecorded call ‘‘costs about 

$0.25,’’ whereas industry surveys show that the cost 

of a live call to a consumer ‘‘is from $3.75 to 

$5.30’’); MinutePoll at 8, 10 (would have to charge 

clients ‘‘ten times our current rates per lead’’ for 

live calls); IAC at 5. 

70 Career at 1 (prerecorded call response rates are 

‘‘ten times higher than for communications by 

email’’) (emphasis in original); MinutePoll at 8; IAC 

at 5 (email messages are ‘‘less effective than 

telephone messages’’ because many consumers 

‘‘check their voicemail but not their home email 

daily’’); IAA at 5–6 (email messages may not ‘‘get 

past spam filters’’); Vontoo CEO at 1 (retirees ‘‘often 

do not have email’’). 

71 IAC at 2 and 5: SmartReply at 39; 

Messagebroadcast.com (‘‘Message’’), No. 599, at 6. 72 NNA at 4 (small community newspapers); cf. 

Career at 3 (‘‘no choice’’ but to use live operators 

at a much higher cost); MinutePoll at 7 (proposed 

amendment ‘‘will result in a substantial increase in 

live operator calls’’); see, e.g., Metcalf, No. 482 

(‘‘more live calls will make a lot of consumers a lot 

more miserable’’). 

73 IAA at 2; MinutePoll at 8; SmartReply at 17; 

Vontoo, LLC (‘‘Vontoo’’) at 3. Several consumers 

opposed to the amendment also worry that 

businesses will not be able to obtain enough written 

agreements from consumers to continue providing 

messages they value. Shaw, No. 650; see Long, No. 

629; Christianson, No. 27. 

74 IAA at 1; cf. IAC at 5 n.9 (cost likely to be so 

great that not all sellers may be able to afford it, 

thus depriving consumers of messages they want); 

IAA at 10 (‘‘[e]conomics dictates that prerecorded 

messages are less likely to be available to 

consumers’’); Message at 6; cf. NNA at 3 

(community newspapers ‘‘struggle to create 

sufficient work for call centers to cover basic 

overhead costs’’ which is why ‘‘voice messaging 

options have become more popular’’ because ‘‘the 

revenue driven by them also can pay for heightened 

customer service’’). Consumers opposing the 

amendment also express concern about the 

continued availability of information and offers 

they value. E.g., Ashroff, No. 627; Noack, No. 642; 

Szczepanik, No. 646. 

75 MinutePoll at 8 (amendment ‘‘would have a 

severe, disproportionate effect’’ on small 

telemarketers that lack ‘‘resources from other lines 

of business to offset the loss of revenue’’ and 

‘‘sufficient scale to operate a large cost-effective live 

call center,’’ with ‘‘likely effect’’ of ‘‘industry 

consolidation’’); Vontoo at 2 (‘‘disproportionately 

severe’’ impact on small businesses’’); SmartReply 

at 24 (businesses that provide prerecorded message 

services ‘‘are generally small businesses [with] less 

than $10 million in revenue’’). 

76 MinutePoll at 1 (‘‘proposed rule would drive 

up marketing costs for small businesses’’); 

SmartReply at 24; but cf. MP at 2 (amendment 

‘‘would force our clients to go to other vendors who 

already offer direct mail and live telemarketing’’). 

77 MinutePoll at 8; TCIM Services, Inc. (‘‘TCIM’’), 

No. 15, at 1–2; Valley at 1. Many of the consumers 

who oppose the proposed amendment express 

concern that ‘‘thousands’’ of American jobs will be 

lost to foreign call centers. E.g., Catalan, No. 480; 

Vivanco, No. 501. 

78 E.g., Maxwell, No. 20; Auburn, No. 129; 

Runyan, No. 61; Wetzel, No. 95. 

79 E.g., Direct Mail Express, Inc., No. 138; Zucker, 

No. 164, at 1; Duke, No. 54; Lane, No. 53. 

80 The Commission notes, however, that none of 

these surveys allowed respondents to state a 

preference for receiving prerecorded calls only from 

sellers to whom they had given their prior written 

agreement to accept such calls pursuant to the 

proposed amendment. Thus, these survey results 

cannot purport to reflect consumer attitudes toward 

the proposed amendment, and are not probative of 

the extent to which consumers might prefer 

consent-based prerecorded calls over prerecorded 

calls with a prompt opt-out mechanism. 

81 MinutePoll, Exh. A, at 1. The MinutePoll 

survey reports a margin of error of 5 percent. 

82 MinutePoll, Exh. A, at 2. While taking care to 

articulate that the TSR does not require sales agents 

to disclose affirmatively that consumers can ask to 

be placed on the seller’s do not call list, this survey 

omits any reference to the TSR requirement that 

sales agents honor a consumer’s assertion of a do 

amendment takes effect,66 and other 

costs they believe will be significant.67

The industry comments stress that 

prerecorded message telemarketing 

costs significantly less, and is more 

effective than the only alternatives that 

are available—direct mail,68 live calls,69

and email.70 Three comments insist that 

there simply ‘‘is no other cost-effective 

communication method’’ available for 

businesses for which the timeliness of 

delivery of high-volume messages to 

customers is critical.71 Other comments 

assert that prerecorded messages are the 

only affordable option for businesses to 

communicate with their customers.72

Several comments point out that the 

higher cost of using such alternative 

marketing methods will be passed on to 

consumers if, as they fear, businesses 

are unable to obtain the consent of a 

significant number of their customers to 

receive prerecorded messages.73 One 

comment doubts that obtaining enough 

consents is likely, and accordingly 

asserts that the ‘‘practical effect’’ of the 

proposed amendment would be that 

‘‘telemarketers could not communicate 

with [their] customers through 

prerecorded messages.’’74 Moreover, a 

number of industry comments argue 

that the proposed amendment will 

disproportionately harm small business 

telemarketers,75 and the small 

businesses that are their clients.76 Some 

small telemarketers assert that the 

proposed amendment ‘‘would reduce 

our revenue by 85%,’’ and that 

continuation in business ‘‘would require 

the termination of most of our existing 

employees’’ and an effort to ‘‘outsource 

the vast majority of our labor force to 

call centers in foreign countries.’’77

Finally, some comments that oppose 

the proposed amendment argue that by 

lumping sophisticated interactive 

message systems that may include 

advanced voice recognition together 

with non-interactive systems, the 

proposed amendment would ‘‘stifle the 

advancement of potentially beneficial 

media.’’78 Accordingly, many favor 

application of the written agreement 

requirement only to non-interactive 

prerecorded calls.79

3. Survey Evidence of Consumers’

Attitudes Toward Telemarketing Calls 

that Deliver Prerecorded Messages 

Industry commenters submitted three 

online consumer preference surveys as 

indicative of consumer support for 

telemarketing calls that deliver a 

prerecorded message with a prompt optout.80

Minutepoll submitted a survey of 388 

consumers and advanced it as evidence 

that there is a ‘‘significant minority’’ of 

consumers who prefer prerecorded calls 

to live calls. Most of these survey 

respondents—82 percent—said they had 

placed their phone numbers on the 

National Do Not Call Registry. When 

asked in the abstract, 70.1 percent stated 

that they would prefer ‘‘live operator’’

calls, whereas 29.9 percent said they 

would prefer a prerecorded message.81

When given the choice of a prerecorded 

call with a ‘‘quick option to get on the 

calling company’s ‘Do not Call list,’’’ or 

a live operator call that ‘‘would not be 

required to do this,’’ 68.3 percent said 

they would prefer the prerecorded 

message and only 31.7 percent said they 

would prefer the live call.82 In 


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not call request. It is a violation of the TSR to deny 

or interfere ‘‘in any way, directly or indirectly, with 

a person’s right to be placed on any registry of 

names and/or telephone numbers of persons who 

do not wish to receive outbound telephone calls 

established to comply with §310.4(b)(1)(iii),’’ 16 

CFR 310.4(b)(1)(ii), or to initiate ‘‘any outbound 

telephone call to a person when that person 

previously has stated that he or she does not wish 

to receive an outbound telephone call made by or 

on behalf of the seller whose goods or services are 

being offered.’’ 16 CFR 310.4(b)(1)(iii)(A). 

83 MinutePoll, Exh. A, at 1–2. Similarly, of the 

68.3 percent who preferred prerecorded messages 

with a quick ‘‘DNC opt-out,’’ 33 percent indicated 

they made that choice to ‘‘[g]et them to stop calling/ 

get off the list’’ and 16 percent did so to be able 

to ‘‘hang up easier/without guilt.’’ Id. 

84 VMBC at 1, citing Forrester Research’s 

Consumer Technographics, NACTAS Q3 2006 

Omnibus Online Survey (‘‘VMBC Survey’’), No. 

584. The survey reports a margin of error of ± 1.3 

percent. VMBC Survey at 1. 

85 VMBC Survey at 1. 

86 Survey respondents were told that an 

‘‘automated’’ call means ‘‘a call made to your home 

in which you interact with a recorded voice rather 

than a live caller.’’ Silverlink Communications, Inc. 

(Rubin) (‘‘Silverlink Survey’’), No. 217, Attach. A, 

at 2 (emphasis added). The Silverlink Survey 

reports a margin of error of ‘‘just above 4%.’’

Silverlink (Rubin), Attach. B, at 1. 

87 The survey indicates that 45 percent of those 

surveyed ‘‘would like’’ or ‘‘would not mind’’ having 

their health plan or pharmacy deliver automated 

message reminders of routine screenings or tests 

recommended by their doctor, immunization 

reminders for themselves or their children, or 

prescription refill reminders. Silverlink Survey at 4. 88 Silverlink Survey at 7. Thirty-six percent of 

survey respondents indicated they would find a 

prescription refill reminder helpful, compared to 45 

percent who would not; 42 percent indicated they 

would find an automated reminder of doctorrecommended routine screenings or tests helpful, 

compared to 36 percent who would not; and 30 

percent would find an automated immunization 

reminder helpful, compared to 51 percent who 

would not. Silverlink Survey, Attach. A, at 2. 

89 DMA at 4; NNA at 3 (newspapers’ companyspecific do not call lists are ‘‘typically small and in 

some cases nonexistent’’); IAA at 10 (‘‘low opt-out 

rates experienced by members’ clients’’ are 

‘‘consistent with’’ low opt-out rates reported in 

original VMBC petition); Soundbite at 6 n. 13 

(‘‘usually in the low single digits’’); Protocol 

Integrated Direct Marketing, No. 535, at 1(citing 

unspecified ‘‘low opt-out rates’’). Some comments 

also contend that anecdotal evidence of few 

complaints shows consumer acceptance of 

prerecorded messages. NNA at 3 (no complaints to 

community newspapers); Snoozester, Inc., No. 49, 

at 1 (only 4 complaints out of ‘‘hundreds of 

thousands of calls my company has made’’); 

Capeluto Termite & Pest Control, Inc. (‘‘Capeluto’’), 

No. 131, at 1 (2 complaints out of 50,000 calls). 

90 Most of these comments fail to provide any 

underlying data necessary to evaluate the claims. 

Two indicate that the stated opt-out rates combined 

data from calls where the opt-out mechanism was 

a keypress option and calls where they provided a 

toll-free number requiring a return call that 

consumers may be less inclined to take the time to 

make. MP at 1–2 (9–11 percent opt-out rate with 

interactive messages ‘‘for most of our programs’’) 

(emphasis added); CenterPost at 2 (0.7 percent optout rate for prescription refill and insurance policy 

renewal calls where ‘‘75 percent of all calls’’ had 

‘‘in-call opt-out included’’). Others do not state 

whether the percentage was calculated based only 

on the number of opt-outs when the prerecorded 

message was actually answered by a consumer (as 

opposed to the number of opt-outs for all calls 

placed, which may include messages left on 

answering machines, calls that go unanswered by 

a person or machine, and busy signals). MinutePoll 

at 4 (8–10 percent opt-out rate with up-front 

keypress opt-out, but no indication if based only on 

live answers); VMBC at 2 (3.1 percent opt-out rate 

with ‘‘easy’’ up-front opt-out); cf. Xpedite at 4 n.11 

(1 percent opt-out rate for calls providing opt-out 

telephone number); Countrywide Home Loans, Inc. 

(‘‘Countrywide’’), No. 592, at 2 (‘‘less than 1%’’ optout rate for messages left only on voicemail and 

answering machines). Two comments provide none 

of this information, Call Command at 2 (1.14 

percent opt-out rate with no indication of type of 

opt-out or how computed); Vontoo at 2 (50 of 

12,000 ‘‘persons called’’ (0.4 percent) in a single 

campaign opted out), and two others indicate they 

did not provide the opt-out option until the end of 

the call, when it may have been less likely to be 

used (e.g., if the consumer had already hung-up); 

Message at 1 (0.38 percent opt-out rate where calls 

provided a keypress option at the end of the 

message); Draper’s and Damon’s (‘‘Draper’s’’), No. 

108, at 1 (less than 1.36 percent opt-out rate where 

a keypress option was provided at the end of the 

message). 

91 Global Connect Strategic Broadcasting 

(‘‘Global’’), No. 620, at 5, 19–20 (less than 2 percent 

opt-out rates with keypress opt-out for messages 

offering casino/hotel discount promotions answered 

by a live person). 

92 SmartReply Study at 3 (0.4 percent opt-out rate 

for messages offering discount promotions from 10 

of top 15 ‘‘Fortune 500’’ retailer clients). 

SmartReply asserts that the low opt-out rate 

reported shows ‘‘that some [prerecorded] calls are 

more relevant [to consumers] than others,’’ and that 

the existing EBR requirements ‘‘sufficiently 

guarantee that most of these calls will be relevant 

enough that a significant majority of consumers will 

listen to the call month after month, even when 

given an easy, free and immediate mechanism to 

opt out of future calls.’’ Id. Although the data shows 

that 148,516 of the 4,894,950 customers who 

answered the first call (3 percent) also answered 

and listened to some or all of each of the seven 

subsequent monthly messages, consumers who 

failed to pick up and answer any one of the calls 

were excluded from further study, even if they 

subsequently answered a call. SmartReply also 

contends that consumers must find the monthly 

calls ‘‘relevant and non-intrusive,’’ because the data 

indicates that 90 percent of the customers who 

answered all eight calls listened to the prompt optout option, and on average, 67 percent continued 

to listen to three quarters or more of the message. 

Id at 6–7. SmartReply further compares opt-out 

rates for prerecorded calls that were answered with 

those for messages left on answering machines with 

a toll-free opt-out number, and concludes that 

customers are ‘‘300% more likely’’ to make use of 

the interactive opt-out mechanism than the toll-free 

number. Id. at 10–11. 

responses to open-ended questions, 

however, 54 percent of those who said 

they preferred prerecorded messages 

generally or on some occasions 

indicated that a reason for this 

preference was simply because they 

would be ‘‘[a]ble to hang up.’’83

A second online survey of 5,328 

consumers conducted by Forrester 

Research for VMBC purports to show 

that consumers prefer prerecorded over 

live calls ‘‘on average at a rate of two to 

one, across different age, income, 

geographic, and technological 

groups.’’84 The survey reports that when 

given a choice between a recorded 

message that ‘‘electronically provides 

me with the opportunity to either be 

removed from future calls, be 

transferred to a live representative, or 

end the call’’ or ‘‘[a] call from a live 

telephone representative who begins 

talking without providing [those 

options],’’ from 57 percent to 71 percent 

of the Internet users surveyed, 

depending on ‘‘age, income, geographic 

and technographic groups,’’ stated that 

they would prefer the recorded message, 

with an average of 63 percent across all 

groups.85

The findings of a third online survey 

of some 470 Internet users, 78 percent 

of whom had received an ‘‘automated’’

call within the past 12 months,86 raise 

unanswered questions about the 

consumer preferences elicited in the 

MinutePoll and VMBC surveys. This 

survey, conducted for Silverlink by the 

Zoomerang Online Survey Service, was 

submitted to show that consumers are 

willing to receive prerecorded 

healthcare-related calls.87 The survey 

shows, however, that consumers may be 

far less willing to receive commercial 

prerecorded telemarketing calls than the 

other two surveys might appear to 

suggest. The Silverlink Survey reports 

that 91 percent of the participants said 

they would be unwilling to listen to a 

prerecorded telemarketing call from 

their financial services company 

offering a new credit card at a 

discounted rate, that 87 percent would 

be unwilling to listen to a prerecorded 

telemarketing call from their travel 

agent offering a discounted vacation 

package, and that 41 percent would 

even be unwilling to listen to a healthrelated prerecorded telemarketing call.88

4. Indirect Evidence Regarding 

Consumers’ Attitudes Toward 

Telemarketing Calls that Deliver 

Prerecorded Messages 

A number of industry comments cite 

indirect evidence of consumer 

acceptance of prerecorded message calls 

that incorporate an interactive opt-out 

mechanism. Summing up this line of 

argument, DMA asserts that ‘‘over the 

past two years, companies that use the 

prompt opt-out as mandated by the safe 

harbor have found that the opt-out rate 

is fairly low,’’ and that this shows ‘‘that 

consumers often welcome prerecorded 

messages from entities with which they 

have [an EBR].’’89 While several 

comments from telemarketers claim optout rate percentages that may appear to 

support this contention,90 only two—

Global91 and SmartReply92—provide the 

information necessary to evaluate the 

claims. However, their results—less 

than 2 percent for Global and 0.4 

percent for SmartReply—are based on 


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93 Global at 19 (showing hang-up rates before the 

opt-out message of from 23–68 percent, with a mean 

of 46 percent and a median of 48 percent, in 13 

separate sets of calls). 

94 E.g., Message at 2–3 (citing increased customer 

response rates in client campaigns). None of these 

comments provided underlying data that would 

permit an independent assessment of the claims. 

95 CenterPost at 1. This comment is unclear as to 

whether the percentages provided refer only to 

prerecorded message calls that are answered. 

CenterPost also reports that in two voluntary 

health-related surveys it conducted that invited 

consumers to answer a single question assessing 

their satisfaction with an interactive prerecorded 

message offering prescription refill reminders and 

information, 89.4 percent indicated they found the 

‘‘notification’’ to be ‘‘useful’’ in one survey and 94 

percent were ‘‘extremely’’ or ‘‘highly’’ satisfied in 

the other. Id. at 1–2. Because these two surveys 

apparently were conducted after the refill offer was 

made, the satisfaction percentages necessarily 

excluded consumers who may have chosen to hang 

up on the call or opt out from future calls. 

96 VMBC at 2. 

97 SmartReply Study at 11–12. 

98 See Smith, No. 544 (does not find prerecorded 

messages coercive or abusive). Other consumers 

who oppose the proposed amendment say 

prerecorded messages are ‘‘not a problem,’’ e.g., 

Arce, No. 469; Marquez, No. 507; Yanes, No. 485; 

are ‘‘less intrusive and coercive,’’’’ or simply ‘‘less 

invasive’’ than live calls, e.g., Azcurra, No. 467; 

Hernandez, No. 475; Torres, No. 496; because they 

find it easier to hang up on a recording, e.g., 

Boricean, No. 470; Kheriaty, No. 44; Shimko, No. 

127; they prefer not having to deal with ‘‘pushy 

telemarketers,’’ e.g., Castellon, No. 471; Morales, 

No. 505; Villasenor, No. 500; and find prerecorded 

messages easier to understand than a script read by 

a disinterested telemarketer, e.g., Christianson, No. 

27; Lemkin, No. 31; Wiggen, No. 28, or an offshore 

telemarketer with a foreign accent. Auburn, No. 

129; Zucker, No. 164, at 1. 

99 MinutePoll at 6; SmartReply at 25–26; cf. 

Message at 6 (asserting the prerecorded messages 

that comply with the law are not coercive or 

abusive); Superior Communications and Consulting 

(‘‘Superior’’), No. 632, at 2 (arguing that an EBRbased prerecorded message that ‘‘results in a sale of 

goods or services’’ is not ‘‘unwanted or abusive’’). 

Two comments also protest that ‘‘there has been no 

study proving that prerecorded calls are inherently 

abusive.’’ Vontoo at 2; Message at 6. 

100 DMA at 1, 3 (the same public policies apply 

equally to live and prerecorded calls); Xpedite at 4. 

101 DMA at 4; IAA at 3–4, citing House Report 

No. 103–20, 1994 U.S. Code Cong. & Admin. News, 

at 1626. Two cite a December 2005 Harris poll 

conducted for the FTC in which 92 percent of 

adults with numbers on the Registry reported 

receiving fewer telemarketing calls as evidence that 

the EBR exemption ‘‘strikes the appropriate 

balance’’ between protecting consumers from 

unwanted calls and allowing businesses to use a 

variety of methods including prerecorded messages 

to transmit marketing offers to their customers. 

Verizon, No. 588, at 1; Superior at 2. 

102 DMA at 6; Verizon at 6–7; Bank of America 

(‘‘BoA’’), No. 572, at 3; National Association of 

Realtors (‘‘NAR’’), No. 101, at 1; TCIM at 1; 

Commerce Energy Group, Inc., No. 598, at 1. Two 

comments object that ‘‘there normally is no 

question of ‘call abandonment’ regarding 

prerecorded message calls,’’ and therefore that ‘‘[a]ll 

prerecorded message calls should be exempted from 

the call abandonment requirement, or found 

compliant if the message starts within two 

seconds.’’ Verizon, Attach. A, at 4–5 (basing the 

objection on the lack of ‘‘hang-ups’’ and ‘‘dead air’’

with prerecorded messages, but conceding that 

there may be a ‘‘separate policy reason’’ for 

restricting such messages); Beautyrock, Inc. (Body) 

(‘‘Beautyrock’’), No. 12, at 1. 

103 CBA at 1; Message at 5; cf. NAR at 1–2 

(suggesting that the FTC require, as in the safe 

harbor proposal, a ‘‘toll-free number or other means 

to opt out’’). 

104 CBA at 8–9. The Commission disagrees that 

it is obliged to conform its Do Not Call requirements 

to the parallel requirements of the FCC. See 71 FR 

at 58719–20, 58724–25. 

105 MinutePoll at 7. The comment also argues that 

‘‘the record does not indicate that prerecorded calls 

last any longer or occur any more frequently than 

live operator calls,’’ and thus pose no greater threat 

to health or safety. Id. 

campaigns for unique clients. Moreover, 

to the extent that Global provides data 

on the number of consumers who 

‘‘opted out’’ simply by hanging up the 

telephone, the results indicate that a 

significant percentage of consumers may 

not welcome such calls.93 Thus, the low 

opt-out rates reported do not tell the 

whole story and do not necessarily 

reflect typical consumer acceptance of 

prerecorded calls with a prompt opt-out 

mechanism, or provide a reliable 

measure of consumer acceptance of 

such calls. 

A few comments also assert that 

affirmative actions taken by consumers 

in response to interactive opt-out 

prerecorded messages manifest 

consumer satisfaction with such calls.94

One comment claims that ‘‘66–82% of 

customers renew a policy or 

prescription . . . ; 33–48% of customers 

select additional products or services 

along with the renewal; and 5–13% of 

customers renew policies prior to 

lapse.’’95 Another notes that a major 

entertainment retailer that ‘‘realized a 

6% response to their direct mail offer’’

obtained an ‘‘11.5% response when it 

supplemented the direct mail offer with 

a prerecorded message campaign.96

Similarly, a third asserts that a study of 

82 client campaigns showed that 

consumer spending in response to 

prerecorded messages was 175 percent 

greater than spending in response to a 

direct mail campaign.97

A number of comments contend that 

this evidence of the existence of a 

‘‘subset’’ of consumers who may want 

and ‘‘expect to receive’’ at least some 

prerecorded telemarketing messages 

rebuts any possible contention that 

prerecorded telemarketing messages are 

‘‘coercive or abusive,’’98 and undercuts 

support for the proposed amendment.99

5. Alternatives to the Proposed 

Amendment 

Some of the industry comments 

continue to urge the Commission to 

conform the TSR to FCC regulations that 

permit calls delivering prerecorded 

messages if a seller has an EBR with the 

called consumer. A few recommend 

reconsideration and adoption of the safe 

harbor for prerecorded message calls 

that the Commission had originally 

proposed in response to the VMBC 

request. Most, however, advocate one or 

more refinements of the original VMBC 

safe harbor proposal in an effort to 

reduce the likelihood that prerecorded 

calls would be ‘‘coercive or abusive.’’

a. Comments Arguing that the EBR 

Exemption Should be the Only Limit on 

Placing Calls that Deliver Prerecorded 

Messages, and that the Original Safe 

Harbor Proposal Should be Adopted 

Some industry comments continue to 

insist that the TSR’s existing EBR 

exemption from the prohibition against 

calls to numbers listed on the National 

Do Not Call Registry should apply 

equally to live calls and prerecorded 

calls.100 They argue that the EBR 

exemption properly effectuates the 

purpose of the TSR and the 

Telemarketing Act by protecting 

consumers from unwanted cold calls 

and is critical to businesses.101 They 

also reiterate previous assertions that 

the exemption should apply to 

prerecorded calls to minimize 

inconsistency between the TSR and 

parallel FCC regulations.102 These 

contentions, however, were considered 

and rejected by the Commission when it 

considered adopting a prerecorded call 

safe harbor, and there is nothing new in 

the more recent comments that would 

warrant reconsideration of the 

Commission’s previous conclusions. 

A few industry comments ask the 

Commission to revisit creation of the 

EBR-based safe harbor for prerecorded 

messages it previously proposed in 

response to the VMBC request.103 One 

reiterates the view previously advanced 

by many in the industry that the safe 

harbor proposal would protect 

consumers and ‘‘was supported by the 

record and constituted a useful step in 

the direction of harmonizing the 

Commission’s regulations with those of 

the FCC.’’104

Several comments question some of 

the concerns the Commission expressed 

in rejecting its original safe harbor 

proposal. One contends that the 

evidence in the record that prerecorded 

messages could pose a health and safety 

threat is ‘‘anecdotal,’’ and that ‘‘any 

concerns about isolated instances of 

prerecorded calls tying up a phone line 

so that emergency calls cannot get 

through would be completely avoided’’

by provision of an automated interactive 

opt-out mechanism.105 A few industry 

comments also opined that the 

Commission is unduly concerned about 


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106 CBA at 3; DMA at 5–6 (acknowledging that 

‘‘it is theoretically possible that there will be a large 

number of prerecorded messages’’ because of their 

lower cost than live calls, but contending, based on 

discussions with its members, that live calls will 

continue to exceed prerecorded messages, which 

are most ‘‘useful in specific, targeted applications’’). 

107 CBA at 3 (citing the low opt-out rate reported 

in VMBC’s petition as evidence of this self-restraint, 

and arguing that start-ups and other companies in 

highly competitive lines of business share the same 

incentives); see IAA at 6 (prerecorded messages are 

most likely to be sent by established firms, with the 

strongest incentives for self-restraint, rather than 

start-ups or fly-by-nights). Two comments assert 

that ‘‘more than 80% of consumers are on the 

national do not call list,’’ and this fact deters abuse. 

MinutePoll at 6; IAC at 3. Another says market 

research shows that retailers face customer attrition 

rates of between 33 percent and 50 percent each 

year, and contends they devote their resources to 

‘‘targeted marketing that quickly abandons nonproductive customers,’’ rather than to efforts to 

minimize this attrition by means of low-cost 

prerecorded calls. SmartReply at 41–42. 

108 MinutePoll at 7 (arguing that equipment and 

facilities charges, ‘‘not transmission expenses’’ are 

a significant cost factor, but providing no evidence 

to support that contention); cf. Zucker at 1 (arguing 

that the cost of VoIP ‘‘is not any different’’ from the 

current cost of long distance service for highvolume users since the largest VoIP providers are 

all telephone companies ‘‘for whom VoIP is 

replacing their regular [long distance] offering’’). 

109 Voxeo at 5; cf. Global at 6 (also implicitly 

criticizing the lack of an automated opt-out 

requirement). 

110 Interactions Corp. (‘‘Interactions’’), No. 571, at 

1 (adding that mainstream ‘‘interactive voice 

response (IVR) systems [that] rely on either touchtone input (which severely limits the consumer’s 

ability to communicate or direct the interaction) or 

frustratingly ill-equipped voice recognition 

technologies (which require the consumer to talk 

using sound bites and keywords that can be 

recognized by the IVR and in the order and in the 

fashion dictated by the IVR)’’ are ‘‘generally 

considered more intrusive and more of an invasion 

of privacy’’ primarily ‘‘[b]ecause these forms of 

‘prerecorded messages’ have no ability to listen to, 

understand or truly interact with consumers in a 

natural and conversational fashion’’). 

111 The industry recognizes that informational 

messages that include a sales offer are 

‘‘telemarketing’’ messages, but argues that such 

messages provide consumers with ‘‘information 

they desire, in a format they prefer,’’ DMA at 4; IAA 

at 2; Message at 6; cf. Soundbite at 5 (consumers 

would be ‘‘frustrated’’ by an ‘‘incomplete’’ message 

that omitted the sales component to ensure that the 

message was strictly informational); SmartReply at 

39 (purely informational messages would be ‘‘less 

relevant’’ and consumers would be less happy to get 

them). At least one argues that a safe harbor is also 

necessary to prevent a ‘‘chilling effect’’ on 

informational calls in view of industry ‘‘uncertainty 

as to the regulatory dividing line between 

informational and telemarketing calls.’’ Xpedite at 

5; see also Global at 9 (an up-front keypress optout option would ‘‘alleviate any ambiguity between 

an informational message and a promotional 

message’’); NAR at 1; Zucker at 1. 

112 71 FR at 58719, 58725. 

113 The comments cite such examples as 

expiration and renewal reminders (e.g., DMA at 4 

(magazine subscription); NNA at 2 (newspaper 

subscriptions); Soundbite at 4; Capelouto at 1; 

Tiesenga, No. 651 (snow removal service); Wussler, 

No. 97 (termite inspection); Kelly, No. 457 (bank CD 

renewal)); airline flight upgrade and rebooking 

offers (e.g., DMA at 4; IAA at 8–9; Beatty, No. 22; 

Romoser, No. 426); overdue payment notices with 

incentives to pay promptly (e.g., DMA at 4; Xpedite 

at 1; Romoser (overdue mortgage payment offer)); 

bounced check and overdraft alerts with overdraft 

protection offers (e.g., Soundbite at 4; Christianson, 

No. 27); insurance lapse warnings with renewal 

offers (e.g., CenterPost at 1; Craig, No. 110; Rosato, 

No. 156); invitations to special retail sales and 

events (e.g., Draper’s at 1; SmartReply at 8; Long, 

No. 629; Tiesenga, No. 651); cell phone and 

wireless plan savings offers (e.g., Soundbite at 4; 

Carnes, No. 451; Rankin, No. 136); reminders of 

prior-year purchases (e.g., SmartReply at 14 

(flowers for birthdays or anniversaries)); ticket 

offers for musical events (e.g., Shaw, No. 650; 

Tiesenga, No. 651); car service reminders and lease 

and warranty expiration offers (e.g., Minkoff, No. 

183, at 1; AutoLoop, LLC (Anderson, Steve), Nos. 

63, 184, at 1; Cronin, No. 655; VanHaaren, No. 623); 

lower interest rate offers (e.g., Countrywide at 2 

(refinancing); Geyerhahn, No. 153 (refinancing); 

Knoll, No. 162 (credit card)); time-sensitive sales 

notifications (e.g., Agranovsky, No. 19 (eBay end-ofbidding alerts); Gutierrez, No. 82 (stock market 

alerts)); and local promotions (e.g., Simmons, No. 

648 (pre-order offer for school photos); Szczepanik, 

No. 646 (sports league paraphernalia offers)). 

114 E.g., Bender, No. 62; Haas, No. 76; Kheriaty, 

No. 44. 

115 71 FR at 58725. E.g., Xpedite at 2–3; Voxeo 

at 6; DMA at 3. 

116 E.g., IAC at 3; DMA at 3; Xpedite at 3; Global 

at 8; MinutePoll at 9. 

117 DMA at 3; Xpedite at 3. At least one industry 

comment argues that interactive prerecorded calls 

allow consumers to assert company-specific optouts even more ‘‘quickly, effectively and 

efficiently’’ than live calls. Schwartz, No. 640, at 3 

(citing the test proposed by the Commission for 

approval of a safe harbor for prerecorded calls in 

71 FR at 58718, 58725). 

the likelihood that a safe harbor for lowcost prerecorded messages could 

‘‘substantially increase the volume of 

telemarketing calls,’’ and that any such 

concern is ‘‘speculative.’’106 Others 

criticize the NPRM for giving 

‘‘inadequate consideration’’ to sellers’

‘‘strong incentives to avoid alienating 

existing customers with excessive 

reliance on prerecorded messages.’’107

At least one comment argues that the 

low cost of Voice over Internet Protocol 

(‘‘VoIP’’) calling ‘‘will not engender a 

significant increase in call volume over 

today’s levels’’ because ‘‘long distance 

rates for high-volume users are already 

extremely low.’’108

Nevertheless, two industry comments 

oppose any reconsideration of the 

original safe harbor proposal. One 

contends that the FTC was right to reject 

the proposal as ‘‘too unreliable or too 

burdensome for the consumer,’’

criticizing its contemplated reliance on 

live operators to implement companyspecific opt-outs in particular.109 One 

industry comment goes even further, 

contending that mainstream interactive 

message technologies are ‘‘coercive and 

abusive,’’ ‘‘[a]s supported by the factual 

record compiled by the Commission,’’

explaining: 

‘[P]rerecorded message’ telemarketing, as 

it currently exists, consists largely of oneway audio broadcasts designed to convey 

information to consumers. Such messages 

are nothing other than outbound streaming 

audio files which convert the telephone 

(traditionally an instrument of two-way 

communication) into a radio (an 

instrument for listening). These campaigns 

are widely regarded as a nuisance and a 

burden to consumers because consumers 

are powerless to interact with them.110

Considering this viewpoint and 

industry’s previous opposition to the 

original safe harbor proposal, the 

Commission concludes that the prior 

safe harbor proposal should not be 

resuscitated. This conclusion is 

bolstered by the many divergent 

industry suggestions for modifying the 

proposal, discussed immediately below, 

and, of course, the strong consumer 

opposition to the original proposal and 

support for the current proposal. 

b. A Modified Safe Harbor Should be 

Considered 

The great majority of the industry 

comments ask the Commission to revisit 

and refine its prior safe harbor proposal, 

rather than adopt the proposed 

amendment. They argue that a safe 

harbor for prerecorded telemarketing 

messages with an interactive opt-out is 

necessary for businesses to provide 

many important and convenient 

messages to consumers who wish to 

receive them.111 Although, as the 

Commission has emphasized, the TSR 

does not cover purely ‘‘informational’’

messages,112 the current round of 

industry comments provides numerous 

examples of messages that fall within 

the purview of the TSR because they 

combine information with a direct or 

indirect solicitation.113

In urging the Commission to allow 

telemarketing calls that deliver 

prerecorded messages and require that 

they include an interactive opt-out 

mechanism,114 many industry 

comments propose one or more 

modifications of the original EBR-based 

safe harbor proposal to reduce the 

likelihood that prerecorded calls would 

be ‘‘coercive or abusive.’’ Several of the 

comments acknowledge that industry 

opposition in 2004—on the basis that 

the required technology to implement 

the keypress opt-out mechanism would 

be ‘‘costly, burdensome, and not widely 

available’’—was a factor in the 

Commission’s withdrawal of the 

original safe harbor proposal.115 Many 

accordingly take pains to point out that 

interactive keypress and voice-activated 

technologies have become ‘‘readily 

available’’ and ‘‘cost effective,’’116 and 

therefore contend that a mandatory 

interactive keypress opt-out requirement 

would now be ‘‘feasible.’’117


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118 Although many of the industry proposals refer 

to IVR technology, e.g., IAC at 3, this term may be 

a misnomer, to the extent it suggests that such 

systems are uniformly capable of responding to a 

consumer’s voice commands. While some IVR 

systems may also have ‘‘Automated Speech 

Recognition’’ (‘‘ASR’’) capability that responds to a 

consumer’s spoken words—the direction in which 

the technology appears to be evolving, e.g., Voxeo 

at 6; Interactions at 1—many comments appear to 

use the term to describe a system limited to 

accepting a consumer’s telephone keypad input to 

select a desired option. 

119 E.g., DMA at 1; cccInteractive (Johnson, CJ), 

No. 159, at 1; Call Command at 4; NNA at 1–2, 6; 

IAA at 11; VMBC at 2; MP at 2; Xpedite at 2; Voxeo 

at 6; Zucker, No. 164, at 1. One comment suggests 

specifying that the opt-out disclosure be delivered 

within the first 20 seconds of the message. IAC at 

7. 

120 Soundbite at 13; see IAC at 7. 

121 DMA at 3; IAA at 2; Superior at 2. Three 

comments note that voice recognition systems exist 

that can provide equally convenient opt-out 

functionality for users of rotary dial telephones. 

Voxeo at 6 & n.6.; Soundbite at 6 & n.15; Schwartz, 

No. 640, at 4. It is not clear, however, that these 

advanced systems are widely in use. See IAC at 7 

(suggesting that a toll-free number be provided for 

users of rotary phones); cf. Global at 3 (suggesting 

a toll-free number for messages left on answering 

machines). 

122 Career at 2; MinutePoll at 1. 

123 Soundbite at 8. One telemarketer mentions 

that its prompt opt-out disclosure includes both a 

keypress option and a toll-free number (for 

consumers who receive the prerecorded message on 

their answering machines) that connects to the 

same automated system used for the keypress optout. SmartReply at 5. 

124 Soundbite at 13–14. 

125 For example, one comment recommends that 

a uniform opt-out keypress be required, such as two 

presses on the ‘‘6‘‘ key (which would spell ‘‘NO’’

on the keypad, so that the FTC could advise 

consumers to ‘‘Just Press ‘NO’’’). Soundbite at 14. 

Other comments indicate, however, that different 

systems may be limited to the use of a single 

specific key for opt-out requests. E.g., Global at 

11(‘‘7’’ key); MinutePoll at 4 (‘‘9’’ key); IAC at 3 n.2 

(‘‘1’’ key). 

126 DMA at 2; Soundbite at 13 (so consumers can 

be assured that opt-out is ‘‘easy and effective’’); 

Voxeo at 7; Global at 3; Xpedite at 3. 

127 IAC at 7 (noting that permissible hold times 

while waiting for an operator could be limited by 

the safe harbor). 

128 MinutePoll at 8. 

129 Soundbite at 13. 

130 IAC at 7. 

131 IAC at 3 nn.2–3. However, interactive 

technology apparently exists that allows 

telemarketers to automatically scrub call lists 

against recent additions to a seller’s companyspecific do not call list. See Global at 12. 132 DMA at 1, 3; MinutePoll at 2; MP at 1; 

SmartReply at 5. 

133 DMA at 3; MinutePoll at 2 (‘‘briefly identify 

the nature of the EBR’’) 

134 MP at 1. 

135 SmartReply at 5. 

136 SmartReply at 7; see IAC at 3; Career at 1; 

MinutePoll at 1. 

137 MinutePoll at 1; Career at 1. See IAC at 6 

(suggesting that the Commission could consider this 

or other limitations on the frequency of prerecorded 

calls). 

Most of the industry commenters now 

are willing to support a safe harbor for 

prerecorded calls to EBR customers that 

includes an interactive opt-out 

mechanism utilizing Interactive Voice 

Response (‘‘IVR’’) technology.118 As 

summarized below, the industry 

proposals include recommendations for: 

(1) refinements in the prompt keypress 

opt-out requirement; (2) disclosure of 

the nature of the EBR that permits the 

call; (3) limitations on the permissible 

frequency and duration of prerecorded 

calls; and (4) restrictions narrowing the 

scope of permissible EBRs for 

prerecorded calls. 

i. Prompt Keypress Opt-Out Option 

The industry proposals for modifying 

the original safe harbor begin by 

suggesting that prerecorded messages be 

required to provide an interactive 

keypress or voice-activated mechanism 

that would allow consumers to make a 

company-specific opt-out request after 

the message informed consumers of this 

option at the outset of the call.119 They 

appear to take for granted what only one 

comment explicitly advocates, that the 

keypress option should be active 

throughout the prerecorded message.120

Some comments assert that the 

simplicity of such a mechanism will 

make prerecorded messages convenient 

and efficient for consumers and 

businesses.121 Two comments further 

submit that the prompt availability of 

such a convenient company-specific 

opt-out mechanism would prevent 

prerecorded calls from being 

‘‘coercive.’’122 One comment notes that 

such an option would at least alleviate 

concerns about consumers’ inability to 

interrupt a prerecorded message to ask 

to be placed on the company’s do not 

call list.123 Another emphasizes that the 

requirement will create a powerful and 

‘‘immediate incentive to companies not 

to abuse prerecorded telemarketing by 

flooding consumers with a large number 

of calls of questionable value’’ because 

once a consumer opts out, the company 

will be barred from placing any future 

calls, live or prerecorded, to the 

consumer.124

The comments differ, however, on the 

precise details of how a prompt 

keypress opt-out option should 

function.125 Most recommend that a 

single keypress should trigger an 

automated opt-out, without the 

intervention of a live operator, so that a 

‘‘consumer knows with certainty that 

they have made the request.’’126

However, one comment argues that 

businesses should have the option of 

using customer service representatives 

to take opt-out requests, rather than an 

automated system,127 while another 

seeks the flexibility to require a second 

keypress to confirm an opt-out 

request.128 Likewise, one comment 

suggests that an automated opt-out 

keypress should lead directly to 

immediate termination of the call after 

a recorded brief acknowledgment of the 

request,129 without requiring navigation 

of any intervening submenus, while 

another recommends a limit of two 

layers of submenus.130 Finally, many of 

the comments appear to suggest that an 

automated opt-out request should take 

effect immediately to prevent any future 

calls (although most are silent on this 

point), but one comment recommends 

that companies be given 30-days to 

process the request, to allow sellers time 

to scrub their lists after receiving new 

opt-outs from third-party 

telemarketers.131

ii. Express Identification of the EBR 

A number of the industry comments 

recommend adding a provision to a safe 

harbor for prerecorded message calls 

that would require an indication that 

the call is based on an EBR.132 Two 

comments appear to contemplate only a 

brief indication that the consumer is a 

‘‘customer’’ or ‘‘made an inquiry,’’133

one would go further and disclose ‘‘how 

the [consumer’s] phone number was 

obtained.’’134 Another comment 

suggests that, in lieu of a mandatory 

disclosure, this information could be 

conveyed via a required keypress option 

that would trigger an explanation of 

why the consumer is receiving the 

message.135

iii. Call Frequency and Duration 

Limitations 

Several comments indicate that 

limiting telemarketing to no more than 

one call a month is regarded, at least by 

some in the industry, as a ‘‘best 

practice.’’136 Two comments 

accordingly recommend adding this 

limitation to a prerecorded call safe 

harbor, arguing that such a restriction 

would ensure that prerecorded calls 

would not be ‘‘abusive.’’137 They 

contend that, in combination with a 

prompt keypress opt-out option 

designed to prevent prerecorded 

messages from being ‘‘coercive,’’ this 

additional restriction would prevent 

prerecorded calls from being either 

‘‘coercive or abusive,’’ thereby obviating 

any need or justification for requiring a 

consumer’s express written agreement 

to receive prerecorded telemarketing 

calls. 

Two comments also suggest that 

limits on the length of prerecorded 

messages may be regarded as a ‘‘best 

practice.’’ One indicates that as a ‘‘best 

practice, not only does it limit contact 

with its client’s customers to once a 

month, but also limits the average 


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138 SmartReply at 7; but cf. SmartReply Study at 

7 (survey results noting that SmartReply 

recommends a 17 second message); but see 

CenterPost at 2 (reporting an ‘‘average call length 

of over one minute’’). 

139 IAC at 7; but see Global at 19–20 (showing 

message lengths of from 33 to 93 seconds). 

140 Voxeo at 7–8. 

141 VMBC at 2 (allowing prerecorded messages 

only to consumers who provide the seller with their 

contact information); Soundbite at 15–16 (allowing 

messages only where the seller obtains the 

consumer’s number directly from the consumer, 

and prohibiting calls where the consumer’s number 

is obtained from a directory, another company, or 

some other source); Chrysalis Software, Inc. 

(Ramsey, Greg), No. 79 (prohibiting use of 

purchased lists); Global at 9 (prohibiting calls to 

numbers collected in promotional or prize 

drawings, or obtained from affiliated companies); 

Valley at 1 (disallowing sale of customer lists to 

affiliate parties). 

142 IAC at 6 (suggesting that the EBR be limited 

to allow calls only to consumers who have 

purchased, rented or leased goods or services on 

two or more occasions within an 18 month period); 

Voxeo at 4 (proposing that EBR calls only be 

permitted if the consumer has engaged in ‘‘a series 

of regular transactions’’ with the seller or if the calls 

‘‘directly pertain’’ to a prior transaction). 

143 SmartReply at 43 (noting that ‘‘[i]n general, 

our clients only call customers that have transacted 

in the prior 12 months’’ because messages ‘‘lose 

relevance’’ after that time, and that ‘‘some states 

require a 6 month EBR.’’ Id. at 11); IAC at 6; but 

see DMA at 3–4 (the same EBR parameters should 

exist for both live and prerecorded calls). 

144 VMBC at 1 (‘‘a previous purchase or service 

agreement’’); IAA at 11 (‘‘contract renewals’’ and 

‘‘proposed changes to existing contracts to address 

post-contract events and/or changed 

circumstances’’). 

145 Call Command at 2 (suggesting that consumers 

who exercise this option could then consent to 

receive any EBR calls they wanted). Unfortunately, 

the significant cost of any such alteration to the 

Registry precludes that possibility. 

146 The Heritage Co. (‘‘Heritage’’), No. 581, at 3. 

147 None of the comments in the current round 

questions the Commission’s analytical approach in 

evaluating the prior safe harbor proposal for 

prerecorded calls. 

148 71 FR at 58723. 

149 Id. Some of the industry comments contend 

that the proposed amendment improperly treats 

prerecorded calls as ‘‘abandoned,’’ arguing that they 

are not ‘‘abandoned’’ because a message is delivered 

within two seconds of a live answer. Beautyrock at 

1; Superior at 1; Verizon, Attach. A, at 5. However, 

these objections ignore the text of the prohibition, 

which defines a call as ‘‘abandoned’’ whenever ‘‘a 

person answers it and the telemarketer does not 

connect the call to a sales representative within two 

(2) seconds of the person’s completed greeting.’’ 16 

CFR 310.4(b)(iv) (emphasis added). 

150 71 FR at 58720 & n.53. 

151 See 71 FR at 58719 & n.29. 

152 71 FR at 58725. 

153 One consumer expresses concern that the 

industry may turn to the use of ‘‘informational’’

messages that include an option of ‘‘finding out 

more’’ about a sales offer. Hubbard, No. 115. Such 

calls would be covered by the TSR as 

‘‘telemarketing’’ calls. 

message length to ‘‘about 37 

seconds.’’138 Another proposes that the 

FTC consider such a limitation, and 

suggests that it be 45 seconds.139

iv. EBR Limitations 

Other industry comments propose one 

or more additional requirements that 

would restrict the scope of an EBR for 

prerecorded calls in answer to consumer 

objections about ‘‘calls from sellers that 

use a one-time, insignificant purchase, 

or even a mere inquiry, as a license to 

bombard the consumer with 

solicitations relating to all aspects of the 

seller’s business.’’140 Several suggest 

imposing restrictions on the source of 

the telephone numbers to which 

prerecorded calls may be placed.141

Others advocate that the Commission 

consider limitations on the number of 

transactions between the seller and 

customer to confine the EBR to 

businesses with which consumers have 

regular dealings, or from which they 

would reasonably expect a follow-up to 

an inquiry or purchase.142 Two 

comments also recommend that 

consideration be given to shortening the 

18-month time period in the current 

EBR definition to 12 months for 

prerecorded calls.143 Two other 

comments suggest that EBR-based 

prerecorded message calls might be 

limited to those that are made in 

response to prior purchases or existing 

contracts.144 Finally, one additional 

comment asks the FTC to consider 

modifying the National Do Not Call 

Registry to permit consumers to opt out 

of all calls from businesses with which 

they have an EBR,145 while another 

advocates a segregation of companyspecific opt-out lists that would require 

consumers to opt out separately from 

prerecorded calls and live calls, so that 

businesses could continue to make live 

calls to EBR customers who only opt out 

of prerecorded calls.146

C. Discussion and Analysis of the Safe 

Harbor Modification Proposals 

The question the Commission must 

consider in determining whether to 

adopt a revised safe harbor with any of 

the modifications proposed by the 

industry comments is whether such a 

safe harbor would serve the public 

policy interests articulated in the 

Telemarketing Act. In making that 

assessment, the Commission continues 

to employ the same analytical 

framework used in considering the prior 

prerecorded call safe harbor proposal:147

[T]he Commission’s analysis begins from 

the premise that a new safe harbor that 

treats prerecorded telemarketing calls to 

established customers differently from 

other prerecorded calls might be 

appropriate if: (1) The consumer aversion 

to prerecorded calls (which led to 

enactment of the TCPA ban on such calls) 

does not apply when such calls are made 

to established customers; (2) any harm to 

consumer privacy is outweighed by the 

value of prerecorded calls to established 

customers; or (3) there is something unique 

about the relationship between sellers and 

their established customers that gives 

sellers a sufficient incentive to self-regulate 

so that they would avoid prerecorded 

telemarketing campaigns that their 

customers would consider abusive.148

1. Are Consumers Averse to EBR-Based 

Prerecorded Messages? 

We begin, therefore, with the first 

question for analysis: whether consumer 

aversion to prerecorded calls does not 

apply when the calls are made to EBR 

customers. As the Commission 

previously stated, if consumers have 

little or no aversion to prerecorded calls 

to EBR customers, the fact that such 

calls avoid the twin harms of ‘‘hangups’’

and ‘‘dead air’’ would weigh heavily in 

favor of the adoption of a new safe 

harbor.149

Almost all of the few consumer 

comments in the record that favored the 

prior safe harbor proposal for 

prerecorded calls confined their support 

for such calls to informational 

messages,150 while the industry in effect 

took the position that the need for such 

informational messages required blanket 

approval of prerecorded telemarketing 

messages to EBR customers without an 

interactive opt-out mechanism.151 The 

Commission therefore took pains to 

point out that purely informational 

messages are not ‘‘telemarketing’’

messages covered by the TSR.152

However, as previously noted, the 

comments opposing the proposed 

amendment now emphasize for the first 

time that the exclusion of purely 

informational reminder messages from 

TSR coverage still leaves many 

convenient prerecorded messages 

covered by the definition of 

‘‘telemarketing,’’ because they are both 

informational and involve a direct or 

indirect solicitation.153 Several industry 

comments argue that a safe harbor for 

prerecorded telemarketing messages 

with an interactive opt-out is necessary 

for businesses to provide these 

convenient messages to consumers who 

wish to receive them. 

Industry commenters argue, 

moreover, that many of the consumer 

comments that oppose prerecorded calls 

should be discounted because they do 

not specifically state their opposition to 

prerecorded calls with the various 

interactive opt-out options that industry 

members now advocate. The industry 

would have the Commission parse out 

the more than 13,000 consumer 

comments, and ignore those which 

object to non-interactive prerecorded 


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154 See note 246, infra, and accompanying text. 

Although one industry member states that 

consumers who receive prerecorded messages on 

their answering machines and call the toll-free 

number provided are connected to the same 

automated opt-out mechanism as those who answer 

a call, none of the other industry comments 

indicates that the opt-out mechanism for recipients 

of answering machine messages would be equally 

convenient. See note 123, supra, and accompanying 

text. 

155 71 FR at 58723. 156 See note 81, supra, and accompanying text. 

The Commission notes that, by asking whether 

consumers would rather receive prerecorded 

message calls or calls from a sales agent, both the 

MinutePoll and Forester surveys may have led 

survey respondents to presume that they were being 

asked to choose between an equal number of 

prerecorded calls and sales agent calls. The choices 

of those who said they would prefer prerecorded 

calls might have changed if they understood they 

could receive a greater number of pre-recorded calls 

than sales agent calls. 157 See note 82, supra, and accompanying text; 

cf. note 85, supra, and accompanying text (Forrester 

data). 

158 MinutePoll, Exh. A, at 2. Similarly, of the 30 

percent of consumers who initially said they 

preferred prerecorded calls when asked ‘‘in the 

abstract,’’ more than half (54 percent) said the 

reason for this preference was that they could easily 

hang up on the prerecorded calls. This might 

indicate that at most 15 percent of the survey 

respondents may actually have wished to receive 

prerecorded calls. Id. 

159 It is noteworthy that 78 percent of the 

Silverlink Survey participants reported that they 

actually received an automated call within the 

preceding 12 months. Silverlink Survey, Attach. A 

at 2. 

160 Silverlink Survey at 5 & n.14. The fact that 

as many as 41 percent of the survey participants 

said they would be unwilling to listen to 

healthcare-related messages indicates that the high 

satisfaction rates (89–94 percent) reported in the 

CenterPost surveys can best be attributed to the fact 

that only customers who responded to the 

prerecorded call were surveyed. 

message blasting, those which object to 

receiving any telemarketing calls at all 

(including prerecorded calls), those 

which object to the breadth of the EBR 

definition, and those which object to 

violations of the TSR. 

The industry comments appear to 

recognize, however, that the majority of 

consumer comments that oppose 

prerecorded calls cannot be placed into 

any of these categories because they do 

not provide sufficient information to 

permit such a classification. The 

industry presumes, instead, that because 

prerecorded messages with interactive 

opt-outs were not widely used at the 

time of the prior comment period, the 

comments from consumers at that time 

could not have been addressing them. 

For that reason, the industry contends 

that the majority of consumer comments 

that cannot be categorized could not 

have been objecting to prerecorded 

messages with an interactive opt-out, 

and should be disregarded. 

The industry’s critique of the 

consumer comments ignores the fact 

that a few prerecorded call 

telemarketers had been using interactive 

opt-out technology that consumers may 

have experienced before the 

Commission requested public comment 

on a prerecorded message safe harbor. 

Industry’s advocacy also overlooks the 

clear majority of the most recent 

consumer comments that specifically 

object to receiving prerecorded calls 

with an interactive opt-out mechanism. 

Further, industry neglects to account for 

a fact not previously placed on the 

record—that the purportedly quick and 

easy opt-out provided by an interactive 

mechanism at most may be accessible 

by no more than 15 to 20 percent of the 

consumers who receive prerecorded 

messages, because at least 80 to 85 

percent of these messages end up on 

consumers’ answering machines, where 

consumers are powerless to avoid the 

greater burden of calling the seller in an 

effort to be placed on an entity-specific 

opt-out list.154

The Commission noted, when it 

denied the request for a safe harbor for 

prerecorded messages delivered to EBR 

customers, that the consumer comments 

in the record provided ‘‘compelling 

evidence that consumer aversion to 

prerecorded message telemarketing—

regardless of whether an established 

business relationship exists—has not 

diminished since enactment of the 

TCPA, which, in no small measure, was 

prompted by consumer outrage about 

the use of prerecorded messages.’’155

The Commission would therefore be 

hard pressed to ignore the scope and 

force of that consumer opposition to 

prerecorded telemarketing messages 

now—as the industry analysis does—

absent compelling evidence that 

consumers affirmatively support and 

accept such messages when they 

provide an interactive opt-out 

mechanism. The consumer surveys and 

opt-out rate data submitted by the 

industry fall short in providing such 

evidence. 

The Minutepoll survey shows that 

when asked in the abstract, 70 percent 

of the respondents said that they prefer 

live telemarketing calls, and only 30 

percent said they prefer prerecorded 

calls.156 Both the Minutepoll and 

Forrester surveys purport to show, 

however, that consumers really prefer 

prerecorded calls to live calls. For 

example, Minutepoll reports that when 

given a choice between a prerecorded 

call with a ‘‘quick option to get on the 

calling company’s Do Not Call list’’ and 

a ‘‘live operator call that would not be 

required to do this,’’ 68 percent of the 

respondents said they preferred 

prerecorded calls and only 32 percent 

said they preferred live calls.157 There is 

reason to doubt, however, that the 

surveys actually show that consumers 

affirmatively want to receive 

prerecorded sales calls. Of the 68 

percent of consumers in the more indepth MinutePoll survey who said they 

would prefer a prerecorded message 

with a ‘‘quick DNC opt-out,’’ 33 percent 

directly attributed that choice to their 

ability to stop future calls and 16 

percent to their ability to hang up easier 

or without guilt. Thus, when forced to 

choose between an opt-out option with 

prerecorded calls and no such option 

with live calls, 33 percent of those who 

said they prefer prerecorded calls may 

have been misled by the survey to 

believe that accepting a prerecorded call 

was the only way to stop such calls and 

another 16 percent did not want to 

listen to the call at all.158 Thus, neither 

the Minutepoll nor Forrester results 

convincingly demonstrate that 

consumers want prerecorded calls. 

The Silverlink Survey appears to 

confirm what the other two surveys 

suggest—that at best a comparatively 

small minority of consumers 

affirmatively appreciate receiving 

prerecorded telemarketing calls.159

More importantly, the Silverlink 

Survey, which was submitted to show 

greater consumer acceptance of 

prerecorded healthcare messages than of 

other telemarketing messages, 

demonstrates that consumer acceptance 

of prerecorded messages varies 

dramatically depending on the subject 

matter of the message. By overwhelming 

margins, survey participants said they 

would be unwilling to listen to a 

prerecorded credit card offer at 

discounted rates (91 percent) or an offer 

of discounted vacation travel packages 

(87 percent), whereas only 41 percent 

said they would be unwilling to listen 

to a healthcare-related prerecorded 

telemarketing call.160

Thus, far from providing compelling 

evidence of consumer acceptance of 

prerecorded telemarketing messages 

with an interactive opt-out option, the 

industry surveys manifest widespread 

consumer disaffection with such calls. 

With these surveys as background, the 

other evidence proffered by the industry 

to show consumer approval of 

prerecorded messages—opt-out rates 

and consumer actions in response to 

prerecorded messages—is not only 

indirect, but singularly unpersuasive. 

As previously noted, most of the 

industry claims about low opt-out rates 

fail to provide sufficient information for 

an assessment of the claims, either 

because they combined rates for calls 

that had an interactive opt-out with 

those that did not, based the rate on 


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161 See note 90, supra, and accompanying text. 

162 See note 91, supra. The brevity of the 

messages in the SmartReply study also may have 

contributed to the unusually low opt-out rates 

reported. 

163 See note 52, supra, and accompanying text. 

164 Only three percent of the customers in the 

SmartReply study answered the phone and listened 

to some or all of each of eight monthly calls. See 

note 92, supra. 

165 See note 92, supra. 

166 See note 95, supra, and accompanying text. 

167 None of the industry comments provides data 

showing both the number of prerecorded calls made 

and the number of sales resulting from those calls. 

168 At least three consumers opposed to the 

proposed amendment say that prerecorded 

messages benefit them because the same offers 

might get lost or go unread in the volume of junk 

mail they receive. Knoll, No. 162; Kelly, No. 457; 

DeSimone, No. 161; see Harvey, No. 186; cf. Beebe, 

No. 62. Other consumers equate prerecorded 

messages with the junk mail and spam they receive 

and believe that the volume of prerecorded calls 

will grow overwhelming unless restrictions are 

placed on such calls. See Wallace, No. 375 (gets 

‘‘way too much junk mail also’’); Brady, No. 569 

(already gets ‘‘more than enough. . . junk mail and 

internet spam’’); Leach, No. 311 (gets ‘‘so much 

junk mail everyday, isn’t that enough?’’). 

169 See notes 156–158 , supra, and accompanying 

text. Although the 2005 AARP survey similarly 

indicated that 84 percent of sampled consumers 

with numbers on the Registry considered 

telemarketing calls ‘‘irritating’’ or invasive of ‘‘my 

privacy,’’ see note 35, supra, the Commission does 

not rely on that survey because it inquired about all 

‘‘telemarketing’’ calls, not just prerecorded calls. 

170 See note 53, supra (2 percent of consumer 

comments oppose a written agreement 

requirement). If the previous consumer comments 

did not think to object specifically to calls from 

businesses with which the consumer has an EBR, 

see note 56, supra, and accompanying text, that 

oversight is hardly a reliable indication that the 

commenters would welcome EBR calls in some 

circumstances, as an industry comment asserts. See 

note 57, supra, and accompanying text. 

calls that deferred the opt-out 

information until the end of the call, or 

failed to indicate whether the rate 

calculation was based only on calls that 

were actually answered.161 The two that 

did provide sufficient information are 

exceptional cases, with one providing 

prerecorded calls offering casino 

discount promotions and the other 

notifying customers of special sales at 

‘‘Fortune 500’’ retailers.162 In contrast to 

the low rates cited in the industry 

comments, the Commission’s law 

enforcement investigations suggest that 

interactive opt-out rates for prerecorded 

telemarketing calls correctly calculated 

as a percentage of the calls actually 

answered may range from 10 to 20 

percent. The likely reason for the 

apparently low opt-out rates reported by 

the industry is that the great majority of 

consumers probably hang up on 

prerecorded calls without waiting for 

information on how to opt out.163

The fundamental problem with optout rates and other indirect measures of 

consumer acceptance of prerecorded 

calls is that consumers who do not wish 

to be bothered by prerecorded 

telemarketing messages, if they do not 

simply answer and hang up, may let the 

message roll over to an answering 

machine where they can delete it 

later.164 The SmartReply study reporting 

that consumers are 300 percent less 

likely to call a toll-free number to opt 

out in response to an answering 

machine message than to use an 

interactive opt-out mechanism suggests 

that consumers are quite averse to noninteractive opt-out mechanisms.165 It 

appears more than likely that the 

percentage who bother to assert an 

entity-specific opt-out is a small 

percentage of those who dislike 

prerecorded telemarketing messages. 

Similarly, while there is some evidence 

in the record that consumers who 

answer prerecorded message calls and 

listen to them actually make purchases, 

particularly of healthcare products,166

this may occur only in a relatively small 

percentage of the prerecorded calls that 

are made.167

After a careful review of the record in 

its entirety, it is the Commission’s 

considered opinion that the evidence 

shows that a substantial majority of 

consumers dislike telemarketing calls 

that deliver prerecorded messages, with 

or without an EBR or even an interactive 

opt-out mechanism, but that a 

comparatively small minority of 

consumers may, in fact, appreciate the 

convenience of EBR-based prerecorded 

calls when they provide an interactive 

opt-out mechanism, at least in some 

circumstances.168 While a precise 

percentage cannot be determined from 

the information in the record, the record 

evidence suggests that at least 65 to 85 

percent of consumers do not wish to 

receive prerecorded telemarketing 

calls.169 In fact, these percentages would 

likely have been higher, perhaps 

significantly higher, if the MinutePoll 

survey had given participants the choice 

of receiving no prerecorded calls 

without their consent. Consequently, 

the first potential rationale for creating 

a new safe harbor for interactive 

prerecorded telemarketing calls is not 

supported by the record. 

2. Is Harm to Privacy Outweighed by the 

Value of Prerecorded Calls? 

The entire record in this proceeding is 

clear that an overwhelming number of 

consumers hate prerecorded calls, and 

consider them a gross invasion of their 

privacy at home. Although the record 

also now contains some limited 

evidence of consumer willingness to 

accept some telemarketing calls that 

deliver a prerecorded message and 

include an interactive opt-out 

mechanism, only a small minority of 

consumers say they want to receive 

such calls.170 There is clear consumer 

support in the record for prerecorded 

informational messages that are not 

prohibited by the TSR—i.e., messages 

that do not include a sales pitch or 

information about how to make a 

purchase. In contrast, there is scant 

consumer support for interactive 

prerecorded telemarketing messages that 

combine an informational component 

and a sales component, or provide only 

a sales pitch. 

The relatively few consumers who 

want to receive interactive prerecorded 

telemarketing messages primarily say 

they value such messages because they 

find them a ‘‘useful’’ convenience in 

their busy lives, or because they regard 

them as less invasive than live 

conversations with a telemarketer. The 

greater majority who object to 

prerecorded telemarketing messages in 

general, or to interactive messages in 

particular, consider them an intrusive 

and disruptive invasion of their privacy 

at home that amounts to harassment. 

Any argument that the harm of an 

invasion of privacy is outweighed by the 

value of prerecorded telemarketing 

messages as a ‘‘useful’’ convenience, or 

their value as a means of avoiding the 

possible discomfort of conversing with 

a telemarketer, would be untenable 

unless the privacy invasion were 

relatively minor. For the great majority 

of consumers, however, the ringing of 

the telephone is anything but a minor 

invasion of the privacy of their homes, 

particularly when the call they answer 

converts a two-way instrument of 

communication into a one-way 

broadcast of a prerecorded 

advertisement, even if that broadcast 

has some interactive features. 

The Commission is satisfied that there 

is nothing new in the record that would 

warrant a different conclusion on this 

issue than it reached before in denying 

the VMBC request for a safe harbor for 

prerecorded messages with an 

interactive opt-out mechanism. The fact 

that the record now includes evidence 

that some consumers would find 

interactive prerecorded messages useful 

does not outweigh the significant harm 

to the privacy interests of consumers, as 

attested by the great majority of 

consumer comments in the record and 

by the survey data submitted. This 

argues for choice in this matter—to 

allow those consumers who want such 

calls to consent to receive them, while 

protecting the large majority who 

deplore them from having to receive and 

opt out, one by one, from each seller’s 


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51178 Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 

171 71 FR at 58723. 

172 15 USC 6102(a)(3)(A). This directive appears 

consistent with the previously expressed intent of 

Congress, as stated in the preamble to the TCPA, 

that ‘‘banning . . . automated or prerecorded 

telephone calls to the home, except when the 

receiving party consents to receiving the call . . . is 

the only effective means of protecting telephone 

consumers from this nuisance and privacy 

invasion.’’ TCPA, Pub. L. No. 102—243, 105 Stat. 

2394 (1991) at § 2(12). 

173 71 FR at 58723–24. 

174 See note 107, supra, and accompanying text. 

175 71 FR at 58723. 

176 See note 107, supra. 

177 71 FR at 58723–24. 

178 Consumers filed more than 1200 complaints 

about prerecorded calls with the Commission from 

January 1 through December 31, 2007. 

179 E.g., FTC v. Voice-Mail Broad. Corp., No. 2:08- 

cv-00521 (C.D. Cal. Feb. 8, 2008) ($3 million civil 

penalty for failing to comply with the FTC’s 

enforcement forbearance policy in delivering 

prerecorded messages; i.e., abandoning over 46 

million calls, that provided no opt-out option to 

consumers who answered); United States v. 

Guardian Commc’n., Inc., No. 4:07–04070 (C.D. Ill. 

Nov. 15, 2007) ($7.8 million civil penalty for 

automated prerecorded message blasting to up to 20 

million numbers a day, many of which were placed 

to numbers on the Registry, and for abandoning 

calls answered by a person); United States v. 

Craftmatic Indus., Inc., No. 07–4652 (E.D. Pa. Nov. 

8, 2007) ($4.4 million civil penalty for hundreds of 

thousands of calls to numbers on the Registry and 

for abandoning millions of calls); Global Mort. 

Funding, Inc., No. 07–1275 (C.D. Cal. filed Oct. 30, 

2007) (complaint alleging hundreds of thousands of 

calls to numbers on the Registry, and abandoning 

many calls answered by a consumer). See also note 

15, supra. 

180 See note 92, supra. 

181 See note 246, infra, and accompanying text. 

call list. Thus, the second potential 

rationale for adoption of a safe harbor 

for interactive prerecorded 

telemarketing calls is not supported by 

the record. That fact, as the Commission 

previously noted, ‘‘assumes particular 

importance in view of Supreme Court 

precedent that has long recognized the 

significant governmental interest in 

protecting residential privacy.’’171

The Commission emphasizes that this 

conclusion is by no means solely the 

result of the relative percentages of 

consumers who say they oppose or 

support prerecorded telemarketing 

messages, or who do or do not perceive 

that their privacy at home is harmed by 

receiving them. The conclusion is 

influenced in no small part by the 

considerable value Congress clearly 

attached to preserving the privacy of 

citizens in their homes when it enacted 

the Telemarketing Act, and specifically 

directed the Commission to ‘‘include in 

[the TSR] a requirement that 

telemarketers may not undertake a 

pattern of unsolicited telephone calls 

which the reasonable consumer would 

consider coercive or abusive of such 

consumer’s right to privacy.’’172

3. Do Sellers Have a Strong Incentive to 

Avoid Abuses? 

The third potential rationale for 

creation of a new safe harbor as 

indicated in the NPRM is that sellers 

might self-regulate the number of 

prerecorded messages they send in 

order to preserve the goodwill of 

established customers. The Commission 

determined that this consideration 

could not support such a safe harbor. 

Some industry comments submitted in 

response to the NPRM challenge this 

determination, but not persuasively. 

The Commission previously concluded 

that: (1) While well-established 

businesses with brand or name 

recognition may have incentives to 

exercise restraint, the same is not 

necessarily true for new entrants or 

small businesses in highly competitive 

markets; (2) A safe harbor for 

prerecorded calls would expose 

consumers to prerecorded calls from 

every seller from whom they had made 

a single purchase within the past 18 

months; (3) Sellers would have less 

incentive to exercise self-restraint with 

respect to customers who make 

inquiries, because they would have no 

existing customers to lose, but only 

customers to gain; (4) The likelihood 

that industry-wide self-restraint would 

be effective requires consideration of the 

industry’s record of compliance; (5) 

Although overall compliance is quite 

good, not all covered entities are 

complying, and that fact presents a 

particular problem with respect to 

consumer concerns about the breadth of 

the industry’s interpretation of what 

constitutes an EBR; and (6) The 

significantly lower cost of prerecorded 

telemarketing calls, compared to live 

calls, will create economic incentives to 

increase the number of prerecorded 

telemarketing calls consumers receive in 

their homes.173

Some in the industry assert that the 

Commission gave ‘‘inadequate 

consideration’’ to the argument that 

sellers have strong incentives to avoid 

alienating existing customers, 80 

percent of whose telephone numbers 

may be listed on the Registry. These 

comments argue that because the 

availability of an interactive opt-out 

mechanism could easily lead to the loss 

of the right to contact many EBR 

customers by telephone, sellers would 

exercise caution in using prerecorded 

messages.174 The Commission believes 

it did give appropriate weight to these 

considerations, however, when it 

explicitly acknowledged that sellers 

with brand or name recognition may 

have sufficient incentives to exercise 

restraint in placing prerecorded 

telemarketing calls to their 

customers.175

Some industry comments further 

criticize the Commission’s concern 

about whether new entrants and small 

businesses in highly competitive 

markets would have sufficient 

incentives to exercise the same selfrestraint, contending that they share the 

same incentives and are less likely than 

established businesses to use 

prerecorded telemarketing calls.176 This 

criticism ignores the powerful economic 

incentives for new entrants and small 

businesses to seek to grow their 

businesses. The Commission considers 

it noteworthy that none of the industry 

comments challenged its conclusion 

that sellers would have less incentive to 

exercise self-restraint with respect to 

consumers who make an inquiry that 

creates an EBR, and thus are potential 

customers, rather than existing 

customers.177

Based on the entire record and its 

enforcement experience, three 

considerations lead the Commission to 

conclude that, if anything, it may have 

overestimated the incentives for 

industry self-restraint in the use of 

prerecorded telemarketing messages. 

First, any such self-restraint is called 

into question by the more than 100 

consumer complaints a month that the 

Commission has been receiving about 

prerecorded telemarketing calls—the 

fifth highest number of all TSR violation 

complaints.178 Second, the 

Commission’s recent law enforcement 

investigations and cases provide 

evidence that millions of prerecorded 

calls are being made to numbers on the 

Registry, and that many of these calls 

are abandoned if a consumer answers 

the telephone.179 Third, two facts about 

which the Commission was not 

previously aware—an industry analysis 

showing that consumers are 300 percent 

less likely to opt out from an answering 

machine message that provides a tollfree number than from a prerecorded 

call that has an interactive opt-out 

mechanism,180 and industry reports that 

between 80 and 85 percent of 

prerecorded messages end up on 

answering machines181—suggest that 

sellers may have little reason to be 

overly concerned about losing EBR 

customers from too frequent use of 

prerecorded telemarketing messages 

since most consumers do not bother to 

call back to opt out after retrieving such 

messages. This data also suggests that 

the relatively low opt-out rates reported 

in the industry comments may be more 

a function of the relatively small 

percentage of such calls answered by a 


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Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 51179 

182 The annual 33 to 50 percent customer attrition 

experienced by retailers, SmartReply at 41, would 

appear to provide a strong incentive to use 

prerecorded calls to make sales before the attrition 

occurs, whereas opt-out rates are so low as to 

provide little incentive for self restraint. 

183 See Charles Duhigg, Bilking the Elderly with 

a Corporate Assist, N.Y. Times, May 20, 2007, at A–

1 (reporting that, since the start of 2006, ‘‘federal 

agencies have filed lawsuits or injunctions against 

at least 68 telemarketing companies and individuals 

accused of stealing more than $622 million’’). 

184 Message at 2–3 (message scripts with opt-out 

at end of call); Draper’s and Damon’s (message 

script with opt-out at end of call). 

185 FTC v. Voice-Mail Broad. Corp., No. 2:08-cv00521 (C.D. Cal. Feb. 8, 2008) ($3 million civil 

penalty, with all but $180,000 suspended due to 

inability to pay, for law violations including failure 

to provide consumers who answered prerecorded 

calls with an opportunity, at the outset of the 

message, to opt out). This violation was somewhat 

surprising since it was VMBC that first advocated 

a safe harbor for prerecorded messages with an 

interactive opt-out opportunity at the outset of the 

message. 

186 69 FR at 67290 (requiring, inter alia, a 

disclosure of the opt-out mechanism provided at 

the outset of a prerecorded call) (emphasis added). 

The argument would also be more compelling if the 

record did not include consumer complaints about 

prerecorded calls from well-established businesses 

with brand or name recognition. See notes 19–21, 

supra, and accompanying text. 

187 71 FR at 58724 & n.91, citing United States 

v. Columbia House Co., No. 05C—4064 (N.D. Ill. 

filed July 14, 2005) ($300,000 civil penalty 

settlement for alleged calls to tens of thousands of 

numbers on the Registry to consumers who last 

made a purchase from the defendant far outside the 

prior 18-month period during which the EBR 

exemption would have applied). The Commission 

has no reason to believe that narrowing the EBR 

definition would succeed in protecting consumer 

privacy, and would eliminate the problems 

addressed by the proposed amendment. Such an 

approach would have the undesirable effect of 

reducing the ability of businesses to communicate 

with their EBR customers with live calls. 

188 See note 106, supra, and accompanying text. 

The Commission is not persuaded that it should 

ignore the basic economic principles which led to 

its concern, and rely instead on vague industry 

assurances, based on anecdotal evidence, that 

prerecorded calls ‘‘are most useful in specific, 

targeted applications’’ to conclude that an increase 

in prerecorded calls would not occur if a safe 

harbor were created. 

189 See note 108, supra, and accompanying text. 

190 71 FR at 58726–27. 

191 16 CFR 310.4(b)(1)(iv) (prohibiting call 

abandonment, and defining call abandonment as a 

failure to connect a call to a sales representative 

within two seconds of the completed greeting of the 

person who answers). 

192 71 FR at 58726. 

193 Id. 

194 71 FR at 58733. 

195 71 FR at 58723. 

consumer rather than an answering 

machine. Thus, the supposed incentive 

for industry self-restraint created by the 

availability of an interactive opt-out 

mechanism is liable to be less effective 

than it previously appeared.182

A number of comments also object to 

the Commission’s consideration of the 

industry’s record of compliance with 

the TSR in assessing the likelihood that 

industry-wide self-restraint would be 

effective. They argue, in essence, that it 

is unfair to judge industry members who 

try to comply with the law by the 

actions of bad actors who are unlikely 

to comply with any TSR requirement 

unless brought to account by law 

enforcement action.183 This argument 

would have greater force were it not for 

the fact that, as some in the industry 

have privately acknowledged, a few 

industry submissions show,184 and the 

Commission’s law enforcement 

experience demonstrates,185 it was not 

until late in 2006 that many finally 

began to comply with a key requirement 

of the enforcement forbearance policy 

for prerecorded calls announced by the 

Commission in November 2004, by 

telling consumers how to opt out at the 

outset of the call, rather than at the end 

of the message.186 The Commission’s 

consideration of this issue has focused 

more narrowly, however, on the fact 

that the industry compliance record 

presents a particular problem with 

respect to consumer concerns about the 

breadth of the industry’s interpretation 

of what constitutes an EBR, as the 

consumer comments and the 

Commission’s enforcement experience 

have indicated.187

Finally, the industry challenges 

consumer and Commission concerns 

that industry-wide self-restraint would 

be unlikely to prevent an increase in 

prerecorded telemarketing calls as 

‘‘speculative’’ and ‘‘not supported by 

the record,’’ notwithstanding an 

industry comment acknowledging that 

such an increase is ‘‘theoretically 

possible.’’188 Even if it is true, as 

industry comments argue,189 that VoIP 

is unlikely to reduce call transmission 

costs much below current long-distance 

rates for high volume users, industry 

cannot (and does not) dispute that 

prerecorded message telemarketing is 

significantly less expensive for sellers 

than live telemarketing conducted by 

sales agents. While any forecast of likely 

future events may be unavoidably 

‘‘speculative’’ to some degree, it is only 

reasonable to expect that the prospect of 

labor cost savings would increasingly 

lead sellers to convert as much live 

telemarketing as possible to prerecorded 

calls. 

Because the record does not provide 

persuasive support for any of the three 

potential justifications for according 

special treatment to interactive 

prerecorded telemarketing calls to EBR 

customers, there is no justification for 

creation of a safe harbor for such calls. 

Accordingly, the Commission has 

decided not to reconsider its previous 

denial of the VMBC request for a safe 

harbor. 

D. The Proposed Amendment 

As discussed earlier in this notice, the 

October 2006 NPRM proposed and 

sought public comment on an 

amendment to the TSR that would 

permit prerecorded telemarketing calls 

only to consumers who provided their 

express written agreement to receive 

them.190 This proposal was based in 

large measure on the extensive record of 

strenuous consumer opposition to the 

VMBC request for a safe harbor for 

prerecorded calls. In proposing the 

amendment to make explicit the 

prohibition of calls delivering 

prerecorded telemarketing messages 

when answered by a consumer that is 

implicit in the TSR’s call abandonment 

prohibition,191 the Commission 

emphasized that the Telemarketing Act 

directs the FTC ‘‘to include in [the TSR] 

a requirement that telemarketers may 

not undertake a pattern of unsolicited 

telephone calls which the reasonable 

consumer would consider coercive or 

abusive of such consumer’s right to 

privacy.’’192 The Commission further 

concluded that ‘‘the present record 

supports a finding that a reasonable 

consumer would consider prerecorded 

telemarketing calls coercive or abusive 

of such consumer’s right to privacy,’’193

but specifically requested public 

comment on that issue.194

1. Discussion and Analysis of the 

Proposed Amendment 

Consumers find non-interactive 

prerecorded calls abusive because they 

are powerless to interact with a 

recording.195 For this reason, most of 

the industry comments apparently 

accept that a reasonable consumer 

would consider non-interactive 

telemarketing message calls ‘‘coercive or 

abusive of such consumer’s right to 

privacy.’’

The industry comments strongly 

contest, however, the Commission’s 

authority to prohibit the delivery of 

prerecorded telemarketing messages that 

provide an interactive opt-out 

mechanism without a consumer’s prior 

written agreement to receive them. They 

primarily argue that interactive 

messages are significantly different from 

non-interactive messages because 

consumers are not ‘‘powerless’’ to 

prevent privacy abuses from 

prerecorded message calls that provide 

an interactive opt-out mechanism. The 

industry comments therefore contend 

that it would be unreasonable for 

consumers to consider such messages 

abusive of their privacy. 


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51180 Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 

196 68 FR at 4629–30. 

197 See Section II.A.4, supra. 

198 68 FR at 4629. 

199 See the discussion in Section II.B.1, supra. 

200 The Commission notes that the fact that a 

clear majority of consumers do not want to receive 

interactive prerecorded telemarketing messages 

does not necessarily compel a finding that a 

reasonable consumer would consider such 

messages ‘‘coercive or abusive,’’ any more than the 

fact that a minority may want to receive such 

messages would compel the opposite conclusion. 

The standard is an objective one, which requires the 

Commission to determine, from the perspective of 

a ‘‘reasonable consumer,’’ whether such a consumer 

‘‘would consider’’ prerecorded telemarketing 

messages to be ‘‘coercive or abusive.’’

201 Two additional industry arguments are based 

on a misunderstanding of the applicable evidentiary 

standard. According to these arguments, no 

conclusion can be drawn that reasonable consumers 

could consider such calls coercive or abusive of 

their right to privacy absent a study proving that 

interactive prerecorded message calls are abusive, 

or because there is a ‘‘subset’’ of consumers who say 

they want to receive such messages. See notes 98–

99, supra, and accompanying text. 

202 AARP at 4; PRC at 5. 

203 DMA at 8; cf. Voxeo at 9 (‘‘[W]ith the 

widespread use of the Internet and other platforms 

for electronic or long-distance shopping,’’ many 

transactions never leave ‘‘the confines of 

cyberspace’’). 

204 DMA at 8; IAA at 11; IAC at 8; SmartReply 

at 23, 28 (seeking ‘‘liberalizing’’ of ‘‘the definition 

of express consent’’ so that it can be obtained ‘‘with 

minimal effort and minimal commitment’’); Call 

Command at 5 (requesting ‘‘a less restrictive 

approach to obtaining a consumer’s express 

consent’’). 

205 E.g., DMA at 9; IAA at 11; NNA at 5 (permit 

‘‘oral consent’’); SmartReply at 28 (no ‘‘burdensome 

document or contract’’); SMG Group, LLC 

(Grossman, Steven), No. 613 at 1 (‘‘a more 

reasonable measure would be to require verbal or 

even electronic consent’’). 

The Commission does not find this 

argument persuasive. As the 

Commission noted when it amended the 

TSR to establish the Registry, ‘‘the 

company-specific approach is seriously 

inadequate to protect consumers’

privacy,’’ not only from calls from a 

single telemarketer, but especially when 

the volume of telemarketing calls from 

multiple sources is so great that 

‘‘consumers find even an initial call 

from a telemarketer or seller to be 

abusive and invasive of privacy.’’196

Consequently, reasonable consumers 

may very well experience even 

telemarketing calls that deliver a 

prerecorded message but include an 

interactive entity-specific opt-out as 

coercive and abusive of their rights to be 

left alone in their own homes. Such a 

conclusion might be particularly 

justified if an overall increase in the 

number of such calls were anticipated 

because of their low cost; but it would 

not be unreasonable even if no such 

increase were anticipated, given the 

evidence in the record that interactive 

opt-out mechanisms do not always 

work,197 and can be just as ineffective 

and burdensome for consumers as the 

entity-specific opt-out procedures 

criticized in the Commission’s decision 

to create the Registry.198

Second, the industry argues that the 

record cannot support a finding that 

interactive prerecorded messages are 

‘‘coercive or abusive’’ because the 

consumer comments submitted during 

the initial comment period in 2004 do 

not explicitly object to interactive 

messages. For the reasons previously 

discussed, the Commission finds this 

argument unpersuasive.199 In this 

regard, the most telling evidence in the 

record is the industry survey results 

showing that a significant majority of 

consumers do not want to receive 

interactive prerecorded messages.200

Thus, the Commission concludes that 

the preponderance of the evidence on 

the record as a whole supports adoption 

of the proposed amendment.201

Having reviewed the entire record, the 

Commission concludes that the 

reasonable consumer would consider 

interactive prerecorded telemarketing 

messages to be coercive or abusive of 

such consumer’s right to privacy. The 

mere ringing of the telephone to initiate 

such a call may be disruptive; the 

intrusion of such a call on a consumer’s 

right to privacy may be exacerbated 

immeasurably when there is no human 

being on the other end of the line. The 

Commission is inclined to agree that 

prerecorded telemarketing messages, 

whether interactive or non-interactive, 

convert the telephone from an 

instrument for two-way conversations 

into a one-way device for transmitting 

advertisements, as one industry 

comment notes. The Commission 

believes that the other narrowly focused 

industry arguments to the contrary 

disregard the intrusiveness and 

disruptiveness of calls delivering 

prerecorded messages, and seriously 

underestimate the very high value 

consumers place on their privacy at 

home. 

In reaching this conclusion, the 

Commission remains mindful of 

industry concerns about the impact of 

this determination, and appreciates the 

potential consequences for law-abiding 

industry participants. For this reason—

and out of consideration for the 

minority of consumers who may wish to 

receive prerecorded messages—the 

Commission declines to adopt the 

suggestion of two consumer groups that 

prerecorded telemarketing calls be 

banned completely.202 Also for this 

reason, the Commission is adopting a 

number of provisions industry 

commenters have advocated to mitigate 

the burden of implementing the 

amendments the Commission is 

adopting, as discussed below. 

The Commission is also mindful of 

the legitimate interests of both sellers 

and consumers in communicating 

immediately following a sale. The 

Commission therefore wishes to 

emphasize that prerecorded messages 

communicating delivery or service dates 

or times, and similar information, are 

informational calls that fall outside the 

ambit of the TSR’s regulation of 

‘‘telemarketing.’’ Thus, sellers may 

continue to use prerecorded messages 

for those purposes without restriction. 

Finally, the Commission notes that it 

is aware that the technology used in 

making prerecorded messages 

interactive is rapidly evolving, and that 

affordable technological advances may 

eventually permit the widespread use of 

interactive messages that are essentially 

indistinguishable from conversing with 

a human being. Accordingly, nothing in 

this notice should be interpreted to 

foreclose the possibility of petitions 

seeking further amendment of the TSR 

or exemption from the provisions 

adopted here. 

2. Commenters’ Suggestions for 

Revisions to the Proposal 

The public comments on the 

proposed amendment urge several 

revisions that the Commission has taken 

into consideration in refining it. The 

comments variously advocate: (1) 

modification of the requirement for a 

signed, written agreement to give sellers 

greater flexibility in obtaining consumer 

consent to receive prerecorded message 

calls; (2) clarification of what 

disclosures sellers must make when 

obtaining a written agreement from a 

consumer; (3) reconsideration of 

whether the amendment should apply 

to messages left on answering machines; 

and (4) other technical revisions. 

a. Suggested Modifications of the 

‘‘Written Agreement’’ Requirement 

Several industry comments request 

modification of the ‘‘written agreement’’

requirement of the proposed 

amendment to mitigate compliance 

burdens. Because ‘‘much commerce 

occurs over the Internet, by phone, and 

in other simple formats without writing 

and without a clear signature,’’203

several comments urge the Commission 

to modify the proposed amendment to 

give businesses greater flexibility in 

obtaining the required agreement from 

consumers to receive prerecorded 

message calls.204 Specifically, several 

ask that the amendment be modified so 

that the agreement need not be in 

writing,205 and so that an old-fashioned, 


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206 E.g., DMA at 9; Schwartz at 5 (contending that 

the signature requirement is ‘‘too burdensome for 

businesses to implement and will prevent [use of] 

interactive telemarketing calls’’); see IAA at 4–5, 8. 207 Call Command at 5. 208 E.g., SmartReply at 33; Countrywide at 

2;Vontoo at 2; Voxeo at 9. 209 Call Command at 6 (‘‘With respect to consents 

obtained through e-mail and the Internet, it is 

assumed that the answer is straightforward—i.e., 

such methods of consent are clearly considered 

written consents under the Federal E–SIGN Act’’). 

210 Id.; Voxeo at 9; Call Command at 5–6; DMA 

at 9; Vontoo at 2; Third Party Verification, Inc. 

(‘‘Verification’’), No. 134, at 1; Draper’s at 1; 

Booking Angel (McEvoy, Dean), No. 121, at 1; 

Healthcare Technology Systems (Mundt), No. 103 at 

1; Zucker at 2. A few consumers who oppose the 

amendment agree. E.g., Eapen, No. 57; Kaushik, No. 

48; Shimko, No. 502. 

211 Countrywide at 2; Global at 11; Call Command 

at 5; SmartReply at 15; see also, e.g., Brockbank, No. 

96; Maruca, No. 602 ; Rosato, No. 156. 

212 DMA at 9 ; Career at 2; Call Command at 5, 

6; NAA at 7 (noting that Sections 310.3(a)(3) and 

310.4(a)(6) of the TSR already permit oral consent 

in different contexts); NNA at 5; NAA at 6; 

MinutePoll at 9. 

213 Verification at 1. 

214 DMA at 9. 

215 Call Command at 5; SmartReply at 15. 

216 SmartReply at 15 (with store signage 

disclosing the purpose of the telephone number 

request or an oral disclosure read from a point of 

sale system screen by a sales associate). 

217 16 CFR 310.3(a)(3)(i) n.5 and 

310.4(b)(1)(iii)(B)(i) n.6. 

218 The E–SIGN Act defines an ‘‘electronic 

signature’’ as ‘‘an electronic sound, symbol, or 

process attached to or logically associated with a 

contract or other record and executed or adopted by 

a person with the intent to sign the record.’’ 15 USC 

7006(5). The Act further defines an ‘‘electronic 

record’’ as ‘‘a contract or other record created, 

generated, sent, communicated, received, or stored 

by electronic means.’’ 15 USC 7006(4). 

219 Thus, if a seller wishes to capture a 

consumer’s telephone number via automated 

number identification (‘‘ANI’’), the consumer must 

have an opportunity to authorize calls to a number 

that is different from the number used to consent 

to receipt of prerecorded calls. 

220 Thus, disclosures hidden in lengthy end user 

license agreements or on the back of printed forms 

will not pass muster. 

221 Obtaining the required agreement need not 

prolong a conversation with a telephone sales agent, 

and either could precede or follow the conversation 

using an automated request and an interactive voice 

or keypress mechanism to document the response. 

See IAC at 9 n.17. In an incoming call, the request 

could be made during the ‘‘hold’’ time before the 

call is transferred to an agent. If no sales agent is 

immediately available, the amendment would not 

prevent a consumer from leaving a message or 

otherwise agreeing to receive a one-time automated 

return call when an agent ultimately becomes 

available. See Eckert, No. 90. 

222 See Dunlop, No. 118, at 1 (suggesting that the 

Commission prescribe ‘‘explicit sample waiver 

language’’ that would not only help sellers ‘‘avoid 

attorney drafting costs and litigation costs’’ but also 

‘‘save consumers reading time’’). 

223 DMA at 9; Career at 4. One consumer similarly 

suggests that sellers only be required to retain 

‘‘proof’’ that a consumer ‘‘was informed that 

prerecorded messages would be used. See also 

Strang, No. 189, at 4 (recommending that in lieu of 

Continued 

pen-to-paper signature not be 

required.206 Another contends that the 

amendment should require no more 

than that the seller or telemarketer 

‘‘document a consumer’s intent to be 

called.’’207

Similarly, a number of comments 

request clarification that the E–SIGN 

Act applies not only to the signature 

requirement of the proposed 

amendment,208 but also to the ‘‘written 

agreement’’ requirement.209 Several 

comments assert that E–SIGN permits 

an on-line means via website or email 

of obtaining a consumer’s agreement;210

a telephone keypress authorization;211 a 

recording of oral agreement given 

during a call;212 or an oral agreement 

given during a call with third-party 

verification.213 Other comments without 

reference to E–SIGN urge the 

Commission to permit a check-box on a 

return postcard without a signature,214

an unsigned application on which a 

consumer provides his or her telephone 

number,215 or an in-store disclosure by 

a consumer of his or her telephone 

number in response to a sales agent’s 

request.216

It is clear from the comments that 

much of the industry’s opposition to the 

proposed amendment centers on the 

requirement of a signed, written 

agreement to receive prerecorded calls, 

and the presumed cost and paperwork 

burden such a requirement would 

entail. The industry comments appear to 

overlook the fact that the TSR already 

expressly permits obtaining consumer 

signatures electronically as permitted by 

the E–SIGN Act in other provisions 

requiring signed written agreements 

from consumers: 

For purposes of this Rule, the term 

‘‘signature’’ shall include an electronic or 

digital form of signature, to the extent that 

such form of signature is recognized as a 

valid signature under applicable federal 

law or state contract law.217

Because it always has been the 

Commission’s intention to minimize 

any paperwork cost or burden on 

businesses by permitting electronic 

signatures as evidence of compliance 

with the amendment, the Commission 

has added an identical footnote to the 

proposed amendment so that sellers can 

be assured that written agreements 

obtained in compliance with E–SIGN 

will satisfy the requirements of the 

amendment, such as, for example, 

agreements obtained via an email or 

website form, telephone keypress, or 

voice recording.218 Any agreement 

obtained pursuant to E–SIGN must be 

sufficient to show that the consumer: (1) 

received clear and conspicuous 

disclosure of the consequences of 

providing the requested consent — i.e., 

that the consumer will receive future 

calls that deliver prerecorded 

messages—and (2) having received this 

information, agrees unambiguously to 

receive such calls at a telephone number 

the consumer designates.219 The seller 

will have the burden of proof to 

demonstrate that a clear and 

conspicuous disclosure has been 

provided, and an unambiguous consent 

obtained.220 The Commission will 

monitor E–SIGN compliance closely to 

ensure that consumers’ privacy 

preferences are protected. 

The amendment’s written agreement 

and signature elements are essential, 

however, to ensure that consumers are 

adequately apprised of the nature of the 

request and the fact that they will 

receive prerecorded calls as a 

consequence of their agreement.221

Return postcards or applications that are 

unsigned therefore will not suffice to 

demonstrate a consumer’s agreement to 

receive prerecorded message calls. For 

the same reason, a consumer’s oral 

response to an in-store request from a 

sales clerk for a home telephone contact 

number would not evidence the 

consumer’s agreement to receive 

prerecorded calls, nor would an oral 

response to a sales clerk’s express 

request for the consumer’s agreement to 

receive prerecorded message calls. 

Point-of-sale agreements can be 

obtained electronically on POS devices 

or on paper, at the seller’s option, so 

long as consumers have a clear choice 

to receive, or not to receive, prerecorded 

message calls. Both ‘‘Yes’’ and ‘‘No’’

check boxes would serve that purpose 

when placed below a straightforward 

statement such as: ‘‘I would like to 

receive telephone calls with 

prerecorded messages from ABC Co. 

that provide special sales offers such as 

_______ at this telephone number: 

_______.’’ Other formulations may serve 

as well, and although there might be 

some efficiencies from mandating this 

language,222 the Commission believes it 

preferable to allow industry some 

flexibility on this point, rather than to 

prescribe mandatory language. 

b. Suggested Disclosure Requirements 

A variety of suggestions were 

advanced as to the potential need for 

additional disclosures with regard to 

obtaining a consumer’s written 

agreement. Two industry commenters, 

correctly noting that sellers will have 

the burden of proving that they have 

obtained a consumer’s written 

agreement, urged that the Commission 

adopt limited disclosure requirements 

for obtaining the written agreements 

required by the amendment.223 One of 


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an express written agreement requirement, sellers 

be required to maintain documentation that 

provides ‘‘clear and convincing evidence’’ of a 

consumer’s consent to receive prerecorded calls, 

including ‘‘the name of the party giving permission, 

the telephone number that the advertiser may call, 

proof that the recipient was informed that 

prerecorded messages would be used, and the date 

that permission was given’’). 

224 DMA at 9. See also, Vontoo at 3 (also 

advocating a ‘‘clear and conspicuous’’ disclosure 

and adding that a ‘‘non-deceptive’’ disclosure 

should also be required). 

225 Career at 5. 

226 AARP at 6. 

227 Bashinsky, No. 123, at 1; Crider, No. 234 

(agreement should ‘‘not [be] hidden in other forms 

or paperwork’’). 

228 Hui, No. 119. 

229 E.g., United States v. Craftmatic Indus., Inc., 

supra n.15 (hundreds of thousands of calls to 

consumers whose telephone numbers were 

obtained from allegedly deceptive prize promotion 

entry forms). 

230 DMA at 9; Vontoo at 3 (adding that a ‘‘nondeceptive’’ disclosure should also be required). 

231 Two consumers suggest the Commission 

specify location and font size requirements. 

Bashinsky, No. 123, at 1; Crider, No. 234. The 

Commission believes that the ‘‘clear and 

conspicuous’’ standard provides sufficient 

guidance, and mandating more specific 

requirements is not necessary. 

232 Maddock, No. 137, at 3. 

233 Byrne, No. 158; Wibbens, No. 157, at 1. 

234 Hui, No. 119, at 1. 

235 Wibbens, No. 157, at 1. 

236 Id. 

237 See the discussion in Section II.E.2, infra. 

238 Wibbens, No. 157, at 1. 

239 See the discussion in Section II.D.2.c, infra. 

240 Byrne, No. 158. 

241 16 CFR 310.4(c) (restricting permissible 

telemarketing calls to a residence to the hours of 

8:00 a.m. until 9:00 p.m., local time). 

242 Byrne, No. 158. 

243 71 FR at 58733 (limiting the proposed 

amendment to calls ‘‘answered by a person’’). 

244 71 FR at 58726–27, 58733. 

these comments suggest that a ‘‘clear 

and conspicuous’’ disclosure be 

required.224 Another requests that any 

disclosure requirement be a ‘‘clear, 

simple, plain language disclosure’’ that 

‘‘neither sugarcoats nor implicitly 

disparages what the customer is 

agreeing to.’’225

Consumers who address the issue 

agree that the proposed amendment 

should specify what must be disclosed 

to consumers before they give their 

express written agreement to receive 

prerecorded calls, but take a more 

expansive view of the disclosures that 

are needed. One consumer advocate 

asks that the Commission ‘‘propose 

specific rules to ensure the clarity and 

simplicity of a seller’s invitation to 

consumers’’ to provide their express 

written agreement, and publish the 

proposed rules for additional public 

comment.226 The Commission disagrees 

that an additional notice and comment 

period is necessary for this purpose, 

given the thoughtful comments already 

provided on this issue. 

Some consumers express concern that 

sellers’ requests for their agreement to 

receive prerecorded calls might be 

hidden in contest entry or other 

forms,227 or on the back of credit card 

receipts.228 The Commission recognizes 

that these concerns are legitimate, based 

on its enforcement experience,229 and 

accordingly has incorporated in the 

amendment a requirement that a seller’s 

request for a consumer’s agreement to 

receive prerecorded calls be ‘‘clearly 

and conspicuously’’ disclosed, as two 

industry comments also recommend.230

Legal precedent established by the 

Commission’s long use of this term of 

art will ensure that consumers are not 

deceived or confused by hidden 

‘‘agreements’’ buried in fine print.231

One consumer comment recommends 

a disclosure that a consumer’s 

agreement to receive prerecorded calls 

is not required as a condition of the 

purchase of any good or service.232 The 

Commission agrees that the entire 

purpose of the amendment would be 

defeated if sellers could require 

consumers to agree to receive future 

calls delivering prerecorded messages as 

a condition of making a purchase. The 

Commission believes this point is well 

taken, and has incorporated in the 

amendment a prohibition that will 

prevent any such practice. The 

Commission does not agree, however, 

that an additional affirmative disclosure 

is necessary. 

Two consumers also advocate a 

requirement to disclose whether the 

seller will sell consumers’ contact 

information to third parties or share it 

with affiliates or other companies.233 In 

this regard, the Commission emphasizes 

that a consumer’s agreement with a 

seller to receive calls delivering 

prerecorded messages is nontransferable. Any party other than that 

particular seller must negotiate its own 

agreement with the consumer to accept 

calls delivering prerecorded messages. 

Prerecorded calls placed to a consumer 

on the National Do Not Call Registry by 

some third party that does not have its 

own agreement with the consumer 

would violate the TSR. Thus, because 

information sharing cannot be a shortcut 

for the required written agreement to 

receive prerecorded calls, the 

Commission sees no need to impose a 

disclosure about information sharing. 

Suggestions that the Commission 

require disclosures about the risk that 

prerecorded calls could tie up a 

consumer’s telephone line and pose a 

health or safety risk,234 about how 

frequently the seller would make such 

calls,235 and about whether a consumer 

can later opt out after agreeing to receive 

prerecorded calls236 are unnecessary. 

The need for any such disclosure is 

obviated because the Commission has 

decided to incorporate in the 

amendment a requirement that all 

prerecorded calls promptly disclose and 

provide an automated interactive optout mechanism that immediately 

terminates the call after adding the 

called party’s number to the seller’s Do 

Not Call list.237 Consequently, 

consumers who believe they are 

receiving an excessive number of calls 

from a seller or who otherwise wish to 

withdraw their agreement to receive 

such calls will be able to do so by 

utilizing the interactive mechanism. In 

addition, if a telephone line must be 

cleared quickly to handle an emergency, 

this requirement will ensure that 

consumers can terminate a message at 

any time. Similarly, a consumer request 

for a disclosure about whether 

prerecorded messages will be left on 

answering machines is unnecessary,238

because, as discussed below, the 

Commission has decided to expand the 

coverage of the amendment to include 

prerecorded messages delivered to 

answering machines.239

The Commission is not persuaded of 

the need to require any of the other 

disclosures the consumer comments 

suggest. Disclosure of the times when 

prerecorded telemarketing calls may be 

made is unnecessary240 because the TSR 

limits the times when telemarketing 

calls may be made.241 Likewise, a 

disclosure that a consumer may not be 

able to speak to a sales representative, 

as advocated by one consumer,242

would be unnecessary and redundant to 

a request to agree to receive 

‘‘prerecorded’’ message calls. 

c. Coverage of Calls That Deliver 

Prerecorded Messages to Answering 

Machines 

The proposed amendment did not 

apply to prerecorded messages left on 

answering machines or voicemail 

systems, based on the assumption that 

consumer privacy interests would not 

be affected to the same degree when the 

consumer is not at home to answer the 

telephone and an answering machine or 

voicemail service picks up the 

message.243 Nevertheless, the 

Commission specifically sought 

comment on whether this assumption is 

borne out in reality, and whether or not 

the amendment should apply to 

messages left on answering machines or 

voicemail systems.244


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245 NAA at 7; SmartReply at 29; Message at 7. 

246 Message at 5 (stating that the ‘‘[t]ypical 

message left rate for voice marketing is 85%’’); 

Draper’s at 1 (reporting that the live answer rate for 

prerecorded messages is only 20 percent). 

247 SmartReply at 34 (contending that 99.7 

percent of the consumers who receive such calls do 

not opt out). 

248 NAA at 11. 

249 SmartReply at 30; Message at 7. 

250 CTAG at 1, 3; PRC at 3; AARP at 4; NCL at 

1, 6. 

251 E.g., Harlach, No. 000 (‘‘[T]he majority of 

people have an answering service —so that we can 

screen our calls and talk to the people we want’’); 

Wagner, No. 353 (‘‘The large number of prerecorded 

and abandoned calls we receive has forced us to 

change our habits such that we now screen all calls 

through our answering machine. But now we have 

to rush to answer when it is a ‘valid’ call’’); 

Abramson, No. 122 at 1; Brick, No. 309; Linan, No. 

298; McCloskey, No. 248; Strang, No. 529 at 2. 

252 Abramson, No. 122 at 1–2; see Brick, No. 309 

(‘‘The only difference between an answered call and 

a message left on my answering machine is that I 

do not usually get up and cross the room to retrieve 

messages from the machine’’); Hui, No. 119 (‘‘The 

fact that I may do it [delete messages] in one fell 

swoop, as opposed to interrupting what I’m doing 

and answering the phone each individual time is 

irrelevant’’). 

253 Abramson, No. 122 at 2. Three of the 

consumer comments assert that the amendment as 

proposed is ‘‘not consistent with the TCPA, which 

targets even the initiation, not just delivery of such 

calls, to address harms such as the ringing of the 

phone,’’ Worsham, No. 283; Abramson, No. 122 at 

2; Strang, No. 189, at 3; and that application of the 

amendment to prerecorded messages left on 

answering machines is necessary ‘‘to maintain 

consistency with the FCC’’ which ‘‘has determined 

that prerecorded calls left on answering machines 

violate the TCPA.’’ Strang, No. 189, at 3, citing 

Report and Order 03–153, Rules and Regulations 

Implementing the Telephone Consumer Protection 

Act of 1991, 18 FCC Rcd 14014, 14107 ¶ 154, n. 544 

(rel. July 3, 2003); available at (http:// 

hraunfoss.fcc.gov/edocs_public/attachmatch/FCC–

03–153A1.pdf) at p. 93; Worsham, No. 283. 

254 Strang, No. 189, at 2 (emphasis in original); 

see Bashinsky, No. 123, at 1 (Companies ‘‘will 

presumably target more voicemail systems’’ and 

this ‘‘would have an effect of penalizing consumers 

who do not answer the phone when telemarketers 

call’’). 

255 Strang, No. 189, at 2 & n.1. Such a strategy 

would violate § 310.4(b)(1)(iv) of the TSR for failure 

to connect the call to a sales representative if the 

resulting abandonment rate exceeds the three 

percent permitted by the call abandonment safe 

harbor. 16 CFR 310.4(b)(1)(iv) and 310.4(b)(4)(i). 

256 Id. at 1; see also, Haddox, No. 549 (receives 

‘‘many’’ abandoned calls); Raqib, No. 439; 

Anderson, No. 354. 

257 E.g., Popat, No. 120; Gray, No. 130; Racco, No. 

124; see NCL at 4. Some comments similarly argue 

that deleting unwanted messages ‘‘wastes a person’s 

time.’’ Popat, No. 120; Gold, No. 406; see Murphy, 

No. 332; Mathes, No. 252. One comment takes a 

more extreme position and cites having to listen to 

and delete unwanted prerecorded messages as a 

privacy infringement on the theory that ‘‘[a]nything 

that requires me to exert effort that I wouldn’t 

otherwise have had to exert that I did not ask for 

and from which I receive no benefit is very 

intrusive on my privacy.’’ Hui, No. 119. 

258 Racco, No. 124; see Popat, No. 120; Gray, No. 

130 (‘‘A prerecorded message is intrusive no matter 

if it is received in person or on an answering 

device. Regardless of how the message is relayed to 

a person, the person will still have to listen’’); 

Bashinsky, No. 123 (‘‘A person can hang up on a 

recording’’ but ‘‘[t]he answering machine keeps 

recording and ties up the line even longer’’); 

Maddock, No. 137; see Wang, No. 126 at 3 

(suggesting that consumers may have a reasonable 

privacy expectation that messages left on their 

answering machines will be personal messages or 

messages they have requested). 

259 NCL at 4; cf. Swafford, No. 521 (‘‘My biggest 

complaint is that solicitors are now calling my cell 

phone . . . & the same number keeps calling me & 

leaving me a voicemail which I have to delete’’). 

260 CTAG at 2. 

261 AARP at 5; CTAG at 2; NCL at 3. NCL also 

expresses concern that message system limitations 

may result in ‘‘information that is incomplete or too 

quickly spoken to be fully comprehended—the 

equivalent of the indecipherable fine print used in 

many advertisements.’’ NCL at 3. 

262 AARP at 5; cf. NCL at 3 (contending that 

clogged message systems may prevent consumers 

from receiving important informational messages 

‘‘that are allowed by the TSR’’ such as ‘‘product 

recall alerts’’ and implies that this harm is little 

different from a phone line that is tied up by a 

prerecorded message and unavailable for use in an 

emergency). 

Industry comments uniformly oppose 

expanding the scope of the proposed 

amendment to apply to answering 

machine messages.245 Two industry 

comments indicate that 80–85 percent 

of the messages in prerecorded 

telemarketing campaigns are not 

answered by a person and are left on an 

answering machine or voicemail.246 One 

comment argues that the low opt-out 

rate by consumers who find messages 

on their answering machines indicates 

that they appreciate receiving the 

messages.247 Another contends that 

messages left on a machine ‘‘are less 

disruptive and intrusive because called 

parties can simply delete or skip 

messages’’ that do not interest them.248

Two industry comments assert that 

consumers will benefit from the 

proposed exemption for prerecorded 

messages on answering machines in the 

form of lower prices resulting from 

lower marketing costs.249

No fewer than 60 individual 

consumers and 4 consumer advocacy 

organizations, in contrast, unanimously 

urge extension of the coverage of the 

amendment to prerecorded messages 

left on answering machines and 

voicemail systems.250 Several comments 

point out that because of the sheer 

number of telemarketing calls, there has 

been a significant shift in consumer 

behavior and many consumers now use 

their answering machines or Caller ID 

devices while they are at home to screen 

out telemarketing calls.251 As one says, 

‘‘I listen to the messages as they are 

being left on my answering machine, 

and thereby decide if I should pick up 

the phone . . . . Thus, prerecorded 

telemarketing messages that are left on 

my answering machine are often just as 

disruptive to me as the prerecorded 

telemarketing messages that I pick up 

before my answering machine.’’252 For 

these consumers, as one asserts, a 

prerecorded answering machine 

‘‘message is no less coercive or abusive’’

than a prerecorded message that is 

delivered when they answer a call in 

person.253

One consumer comment emphasizes 

that if the amendment were not 

modified to apply to prerecorded 

messages left on answering machines, 

‘‘nothing would prevent telemarketers 

from shifting to using only calls to 

answering machines in their campaigns, 

a strategy that would further increase 

the number of abandoned calls.’’254 The 

comment explains that ‘‘[m]achines that 

use Answering Machine Detection 

(‘AMD’) are programmed to disconnect 

if an answering machine is not detected 

when the call is answered,’’ and that ‘‘if 

the telemarketer is trying to leave a 

message on an answering machine, it 

will abandon the call if a live person 

answers.’’255 The comment asserts that 

the use of AMD devices ‘‘has shown a 

dramatic rise over the past few years 

that has resulted in an explosion of calls 

that are ‘abandoned’ and 

untraceable.’’256

Several consumer commenters 

consider prerecorded messages left on 

answering machines as no less intrusive 

on their privacy than prerecorded calls 

they answer.257 One regards the 

proposed amendment’s inapplicability 

to answering machines as ‘‘[a] 

monstrous loophole through which 

industry can continue to penetrate the 

serenity of the home’’ because ‘‘[a]t least 

when one is there to pick up the phone 

and receive such calls in person he or 

she can hang-up and end the intrusion 

almost immediately.’’258

One consumer advocate points out 

that because consumers can forward 

landline calls to their cell phones, the 

cost of listening to prerecorded 

messages could put them at ‘‘an 

economic disadvantage.’’259 Another 

similarly notes that consumers may 

incur costs to retrieve prerecorded 

messages when doing so by cell phone 

or over a long distance connection.260

Three consumer advocates argue that 

prerecorded messages may fill up the 

message capacity of consumers’

answering machines and voicemail 

systems, thereby preventing consumers 

from receiving other more urgent 

messages.261 AARP stresses that ‘‘[f]or 

older Americans, this is of particular 

concern, given the importance of 

communications with health providers 

and loved ones.’’262 Several consumers 

agree that their homes are so bombarded 

by prerecorded messages that ‘‘eat up 


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263 Stumpel, No. 392, Scott, No. 362; Antonelli, 

No. 281; Gray, No. 130. 

264 Wong, No. 146; see Byrne, No. 158; Khitsun, 

No. 546; Perrone, No. 555; Racco, No. 124; 

Bashinsky, No. 123 (‘‘Recordings can fill up a 

voicemail system pretty fast . . . and by 

monopolizing the phone’s functionality with 

unsolicited information, telemarketers are 

effectively depriving consumers of the use of their 

phone’’); Riley, No. 402 (allowing ‘‘prerecorded 

calls to be sent to my telephone answering 

machine’’ is ‘‘an unauthorized use of my property 

and akin to a trespass’’). 

265 Woods, No. 328; Henderson, No. 182; Gray, 

No. 122. One comment even confesses that ‘‘[w]e 

no longer have an answering machine on our home 

phone, as it was being filled with more canned 

messages than messages we wanted.’’ Burr, No. 211 

(reporting that ‘‘[w]e use our cell phone voicemail 

as an answering machine thanks to the extra 

protection against telemarketers on cell phones,’’

and arguing that ‘‘prerecorded messages should be 

outlawed as they are a form of harassment that can 

not easily be dealt with’’). 

266 The Commission accordingly need not 

determine whether the consumers who contend that 

this result is required for conformity with FCC 

restrictions on messages left on answering machines 

are correct in their interpretation of the FCC’s 

position. 

267 16 CFR 310.4(b)(1)(iv). 

268 DMA at 1, 7–8. A number of industry 

comments request clarification of whether 

particular calls will be regarded as ‘‘informational’’

calls not covered by the TSR and the proposed 

amendment. Countrywide at 2; Remindmecall 

(Barnett, Brian), No. 46, at 1; Call Command at 4–

5; Draper’s at 1; NAA at 2; CenterPost at 1; 

MinutePoll at 2. The proper forum for such 

inquiries, as the Commission has previously stated, 

71 FR at 58725–26, is an advisory opinion request 

pursuant to the Commission’s Rules of Practice. 16 

CFR 1.1 - 1.4. 

269 Call Command at 2, 5. 

270 See Section 310.4(b)(1)(v)(C) of the final 

amendment. 

7 For purposes of this Rule, the term ‘‘signature’’

shall include an electronic or digital form of 

signature, to the extent that such form of signature 

is recognized as a valid signature under applicable 

federal law or state contract law. 

space’’263 on their answering machines 

that they cannot receive the important 

messages they need for ‘‘lack of a 

functional answering machine.’’264

Some point out that an answering 

machine filled with prerecorded 

messages ‘‘prevents important calls or 

emergency calls from sick family 

members from getting through.’’265

In view of the comments, the 

Commission is now persuaded that 

privacy interests are implicated to a 

significant degree when prerecorded 

messages are delivered to answering 

machines, rather than to consumers who 

answer and listen to the messages. 

Taken as a whole, the comments make 

it clear that consumers now very often 

use answering machines not only to 

pick up messages when they are away, 

but also to screen out unwanted 

telemarketing calls when they are at 

home. The comments suggest that 

consumers may have adopted this 

strategy when they faced a deluge of 

telemarketing calls before the National 

Do Not Call Registry was established. At 

any rate, the comments indicate that 

consumers persist in using this strategy 

to deal not only with EBR-based calls, 

but also continuing charitable and 

political calls that are not subject to the 

Registry’s restrictions. For consumers 

who are at home but choose not to 

answer a prerecorded call, the intrusion 

of the message as the answering 

machine records it is hardly less than 

when a message is delivered when they 

answer such a call. It is for this reason 

that the Commission now concludes 

that a reasonable consumer would 

consider prerecorded telemarketing 

messages left on an answering machine 

or voicemail service to be abusive of 

such consumer’s right to privacy.266

The consumer comments also 

highlight a perceived increase in the 

number of calls that are abandoned 

when a consumer answers the 

telephone. The fact that the TSR’s call 

abandonment prohibition does not 

apply to calls picked up by an 

answering machine may have created an 

inadvertent incentive for an increase in 

prerecorded calls targeting such devices. 

While calls targeting answering 

machines do not violate the TSR when 

sales agents are available to speak with 

consumers who answer in person, this 

detail of the call abandonment 

prohibition may have escaped the notice 

of some prerecorded call telemarketers. 

The Commission’s decision to expand 

the scope of the amendment to include 

prerecorded messages left on answering 

machines consequently will have the 

added benefits of ending any such 

misunderstanding, and avoiding any 

similar incentive for targeting answering 

machines as a result of a difference in 

regulatory treatment. The Commission 

accordingly expects that the number of 

abandoned calls will diminish when the 

amendment takes effect. 

d. Suggested Technical Modifications to 

the Amendment 

Two industry comments request 

technical modifications to the 

amendment as first proposed. One asks 

that the reference to ‘‘outbound 

telemarketing call’’ in the amendment 

be replaced with ‘‘outbound telephone 

call,’’ the phrase used in the TSR’s call 

abandonment provision,267 in order to 

give businesses some assurance that the 

scope of the amendment is limited to 

prerecorded messages that include an 

offer to sell goods or services, or solicit 

a charitable contribution, and that a 

purely informational call ‘‘made as part 

of a larger campaign’’ will not be 

deemed to be part of a ‘‘telemarketing’’

campaign.268 The Commission agrees 

that this change is appropriate, both for 

the sake of consistency with the call 

abandonment prohibition and to 

provide sellers and telemarketers with 

the assurance requested. Accordingly, 

the Commission has incorporated this 

revision into the final amendment. 

The second request for a technical 

change seeks a revision of the call 

abandonment prohibition to clarify that 

it does not apply to calls to consumers 

who have provided the seller with a 

signed written agreement to receive 

prerecorded telemarketing calls, because 

no live operator will pick up such calls, 

as the call abandonment prohibition 

requires.269 The Commission agrees that 

the TSR should expressly exclude 

prerecorded calls that comply with all 

applicable requirements of the 

amendment from the scope of the call 

abandonment prohibition, and has 

added a provision to the amendment to 

make that clear.270

E. The Final Amendment 

Pursuant to its authority under the 

Telemarketing Act to include in the TSR 

a requirement that telemarketers may 

not undertake a pattern of unsolicited 

telephone calls which the reasonable 

consumer would consider coercive or 

abusive of such consumer’s right to 

privacy, the Commission has 

determined, after careful consideration 

of the record and for the reasons stated 

above, that it should adopt a new 

paragraph (v) to the ‘‘Pattern of Calls’’

prohibitions in Section 310.4(b)(1) of 

the TSR as follows: 

(v) Initiating any outbound telephone 

call that delivers a prerecorded message, 

other than a prerecorded message 

permitted for compliance with the call 

abandonment safe harbor in 

§ 310.4(b)(4)(iii), unless: 

(A) in any such call to induce the 

purchase of any good or service, the 

seller has obtained from the recipient of 

the call an express agreement, in 

writing, that: 

(i) the seller obtained only after a clear 

and conspicuous disclosure that the 

purpose of the agreement is to authorize 

the seller to place prerecorded calls to 

such person; 

(ii) the seller obtained without 

requiring, directly or indirectly, that the 

agreement be executed as a condition of 

purchasing any good or service; 

(iii) evidences the willingness of the 

recipient of the call to receive calls that 

deliver prerecorded messages by or on 

behalf of a specific seller; and 

(iv) includes such person’s telephone 

number and signature;7 and 


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271 See Section II.B.5.b.i, supra. 

272 71 FR at 58725. 

(B) in any such call to induce the 

purchase of any good or service, or to 

induce a charitable contribution from a 

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

behalf the call is made, the seller or 

telemarketer: 

(i) allows the telephone to ring for at 

least fifteen (15) seconds or four (4) 

rings before disconnecting an 

unanswered call; and 

(ii) within two (2) seconds after the 

completed greeting of the person called, 

plays a prerecorded message that 

promptly provides the disclosures 

required by § 310.4(d) or (e), followed 

immediately by a disclosure of one or 

both of the following: 

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

answered in person by a consumer, that 

the person called can use an automated 

interactive voice and/or keypressactivated opt-out mechanism to assert a 

Do Not Call request pursuant to 

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

the message. The mechanism must: 

(1) automatically add the number 

called to the seller’s entity-specific Do 

Not Call list; 

(2) once invoked, immediately 

disconnect the call; and 

(3) be available for use at any time 

during the message; and 

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

answered by an answering machine or 

voicemail service, that the person called 

can use a toll-free telephone number to 

assert a Do Not Call request pursuant to 

§ 310.4(b)(1)(iii)(A). The number 

provided must connect directly to an 

automated interactive voice or keypressactivated opt-out mechanism that: 

(1) automatically adds the number 

called to the seller’s entity-specific Do 

Not Call list; 

(2) immediately thereafter disconnects 

the call; and 

(3) is accessible at any time 

throughout the duration of the 

telemarketing campaign; and 

(iii) Complies with all other 

requirements of this Part and other 

applicable federal and state laws. 

(C) Any call that complies with all 

applicable requirements of this 

paragraph (v) shall not be deemed to 

violate § 310.4(b)(1)(iv) of this Part. 

(D) This paragraph (v) shall not apply 

to any outbound telephone call that 

delivers a prerecorded healthcare 

message made by, or on behalf of, a 

covered entity or its business associate, 

as those terms are defined in the HIPAA 

Privacy Rule, 45 CFR 160.103. 

1. Overview of the Final Amendment 

Subparagraph (A) of the final 

amendment incorporates the substance 

of the amendment as originally 

proposed, with the revisions discussed 

above. Subparagraph (B) makes two 

principal modifications to the original 

proposal. First, it requires sellers and 

telemarketers to provide an automated 

voice and/or keypress-activated 

interactive opt-out mechanism in their 

prerecorded messages so that consumers 

who have agreed to receive such 

messages will have the option of 

revoking their agreement and opting out 

of future messages as quickly, 

effectively, and efficiently as consumers 

who receive a live telemarketing call. 

Second, subparagraph (B) is partly 

based on, and incorporates elements of, 

the Commission’s enforcement 

forbearance policy with which the 

industry has been required to comply 

since that policy took effect in 2004. 

The requirement that sellers and 

telemarketers provide an automated 

voice and/or keypress-activated 

interactive opt-out mechanism is 

consistent with industry comments 

representing that interactive technology 

is now affordable and in widespread 

use. Based on these representations, the 

Commission has determined that noninteractive prerecorded messages no 

longer need be permitted, and the 

proposed amendment will have the 

effect of prohibiting them. The record is 

clear that consumers regard such 

messages as extremely invasive of their 

privacy because they are completely 

powerless to interact with them. 

By requiring an automated interactive 

opt-out mechanism, the amendment 

will enable consumers who have agreed 

to receive prerecorded telemarketing 

calls from a seller to revoke that 

agreement if they no longer wish to 

receive such calls, or find the frequency 

of calls from the seller abusive of their 

privacy. The Commission intends the 

requirement for an automated 

interactive mechanism to make revoking 

an agreement to receive such messages 

as easy as opting out from a live 

telemarketing call. 

The Commission has also added to 

subparagraph (B) the requirements it 

originally proposed for creation of a safe 

harbor for prerecorded calls, and 

incorporated in the enforcement 

forbearance policy announced in 

anticipation of the creation of such a 

safe harbor in 2004. When these 

requirements for the proposed safe 

harbor were published for public 

comment, the responses from the 

industry overwhelmingly opposed the 

safe harbor proposal, without focusing 

on the proposed compliance 

requirements. When the Commission 

proposed to terminate the forbearance 

policy after abandoning the safe harbor 

proposal, however, the industry 

petitioned for an extension of the policy 

to preserve the status quo, asserting that 

sellers and telemarketers had been 

relying on and complying with the 

policy in delivering their prerecorded 

messages. Based on that understanding, 

the Commission granted the extension. 

By incorporating these requirements 

into the amendment, the Commission is 

adopting provisions on which the 

industry has had an opportunity to 

comment, and with which the industry 

asserts many industry members have 

been complying for some time.271 Now 

that the Commission has determined to 

permit the use of prerecorded messages 

where the consumer has expressly 

agreed to receive calls delivering such 

messages, these requirements are 

essential to the effective implementation 

of an interactive opt-out regime. 

The most significant difference 

between the requirements of the 

Commission’s forbearance policy and 

the requirements of subparagraph (B) is 

the elimination of the option under the 

forbearance policy for sellers and 

telemarketers to provide a telephone 

number consumers could call to opt out 

as the sole and exclusive opt-out 

mechanism. That option was necessary 

to permit the continued use of 

prerecorded messages when the 

forbearance policy was announced in 

2004 because, as many in the industry 

argued at that time, interactive 

technology was ‘‘costly, burdensome, 

and not widely available.’’272 Now that 

the industry comments uniformly 

represent that interactive technology is 

affordable and widely available, it 

would be inconsistent with the 

interactive opt-out requirement of the 

final amendment to permit sellers and 

telemarketers to require consumers who 

answer a prerecorded call in person to 

place a separate call to a specified 

telephone number in order to opt out. 

The final amendment further modifies 

this element of the forbearance policy, 

as discussed below, to clarify that a tollfree telephone number that connects to 

an automated interactive opt-out 

mechanism must be provided whenever 

a prerecorded message may be delivered 

to an answering machine or voicemail 

service, so that consumers who receive 

such messages will have an easy and 

effective opt-out option. 

2. Analysis of Revisions to the Final 

Amendment 

The introductory language in Section 

310.4(b)(1)(v) revises the proposed 

amendment in five respects. The most 

significant is the deletion of the phrase, 


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273 This provision tracks Section 310.4(b)(5)(i) of 

the proposed amendment to create a safe harbor for 

prerecorded calls and the first requirement of the 

forbearance policy. Compare 69 FR at 67294 with 

71 FR at 77635. This part of the proposed 

amendment in turn mirrored Section 310.4(b)(4)(ii) 

of the TSR’s call abandonment safe harbor. 16 CFR 

310.4(b)(4)(ii). 

274 This requirement duplicates Section 

310.4(b)(5)(ii) of the proposed amendment to create 

a prerecorded call safe harbor and the second 

requirement of the forbearance policy. Compare 69 

FR at 67294 with 71 FR at 77635. This part of the 

proposed amendment in turn was based on Section 

310.4(b)(4)(iii) of the TSR’s call abandonment safe 

harbor. 

275 This provision mirrors Section 

310.4(b)(5)(ii)(A) of the proposed safe harbor 

amendment and the third requirement of the 

forbearance policy. Compare 69 FR at 67294 with 

71 FR at 77635. 

276 This requirement replicates Section 

310.4(b)(5)(ii)(B) of the proposed amendment to 

create a prerecorded call safe harbor and the fourth 

requirement of the forbearance policy. Compare 69 

FR at 67294 with 71 FR at 77635. 

277 Id. The NPRM for the proposed safe harbor 

contemplated either the provision of a toll-free 

number for opt-out requests or an interactive 

mechanism that would connect to an operator or 

automatically record an opt-out request. 71 FR at 

77635 (the forbearance policy provision); see also 

67 FR at 67289 at nn.13–14, and accompanying text 

(proposed safe harbor). 278 See note 126, supra, and accompanying text. 

The Commission intends the requirement that the 

mechanism ‘‘promptly disconnect’’ the call to 

permit a very brief automated acknowledgment that 

the telephone number of the person called has been 

added to the seller’s entity-specific Do Not Call list. 279 71 FR at 58723. For analogous policy reasons, 

the FCC prohibits prerecorded calls ‘‘[t]o any 

emergency telephone line, including any 911 line 

and any emergency line of a hospital, medical 

physician or service office, health care facility, 

poison control center, or fire protection or law 

enforcement agency.’’ 47 CFR 64.1200(a)(1)(i). 

‘‘when answered by a person,’’ to 

expand the coverage of the amendment 

to include prerecorded messages left on 

answering machines and voicemail 

services for the reasons previously 

discussed in Section II.D.2.c above. The 

revised language also replaces the 

phrase ‘‘outbound telemarketing call’’

with ‘‘outbound telephone call’’ for the 

reasons discussed in Section II.D.2.d 

above. In addition, the revised 

introduction incorporates the proviso 

that appeared at the end of the original 

proposal, with no change in substance, 

to make it clear that the requirements of 

the amendment do not apply to 

prerecorded messages used to comply 

with the call abandonment safe harbor 

pursuant to Section §310.4(b)(4)(iii). 

Section 310.4(b)(1)(v)(A)(i) adds to the 

substance of the amendment as 

proposed a requirement that sellers 

obtain the written agreement necessary 

to place prerecorded calls only after 

‘‘clearly and conspicuously’’ disclosing 

that the purpose of the agreement is to 

authorize the seller to place such calls 

to the consumer, as discussed in Section 

II.D.2.b above. Section 

310.4(b)(1)(v)(A)(ii) further specifies that 

a seller may not condition the purchase 

of any good or service on a consumer’s 

agreement to authorize prerecorded 

calls, as previously discussed in Section 

II.D.2.b. 

Section 310.4(b)(1)(v)(A)(iii) contains 

the written agreement requirement of 

the amendment as proposed. The only 

change from the original language is the 

substitution of the words ‘‘specific 

seller’’ in place of the words ‘‘specific 

party’’ in the proposed amendment to 

make it clear that prerecorded calls may 

be placed only by or on behalf of the 

specific seller identified in the 

agreement. It is the Commission’s 

intention that agreements authorizing 

prerecorded calls be limited to the 

specific seller identified in the 

agreement, and not be transferable to 

any other party. The only new element 

in Section 301.4(b)(1)(v)(A)(iv), which 

retains the requirement of a signature 

and telephone number that a seller or 

telemarketer is authorized to call, is the 

addition of a footnote that is intended 

to eliminate any ambiguity regarding the 

Commission’s intention that any 

electronic signature permitted by the E–

SIGN Act may be used to formalize the 

required written agreement, which may 

itself be an electronic agreement made 

pursuant to that Act, as discussed in 

Section II.D.2.a above. 

Unlike Section 310.4(b)(1)(v)(A), 

which applies only to outbound 

telephone calls ‘‘to induce the purchase 

of any good or service,’’ Section 

310.4(b)(1)(v)(B) additionally covers 

outbound telephone calls by for-profit 

telefunders ‘‘to induce a charitable 

contribution from a member of, or 

previous donor to, a non-profit 

charitable organization on whose behalf 

the call is made,’’ pursuant to a partial 

exemption the Commission is granting 

for the reasons discussed in Section 

II.G.3 below. Neither Section 

310.4(b)(1)(v)(A) nor Section 

310.4(b)(1)(v)(B) applies to a non-profit 

charity that places its own prerecorded 

calls, because the Commission lacks 

jurisdiction over not-for-profit entities. 

Section 310.4(b)(1)(v)(B) adopts the 

four interactive opt-out requirements 

the Commission proposed for a 

prerecorded call safe harbor, and 

accordingly incorporated in its 

enforcement forbearance policy. Section 

310.4(b)(1)(v)(B)(i) incorporates the first 

provision of the proposed safe harbor 

and forbearance policy, which requires 

sellers and telemarketers to allow the 

telephone to ring for at least fifteen 

seconds or four rings so that consumers 

have a reasonable opportunity to 

answer.273 Section 310.4(b)(1)(v)(B)(ii) 

copies the second provision of the 

proposed safe harbor and forbearance 

policy, requiring that the message begin 

playing within two seconds of the called 

party’s completed greeting.274 The 

requirement in Section 

310.4(b)(1)(v)(B)(ii)(A) that prerecorded 

calls provide an up-front disclosure of 

how to opt out of future calls adopts the 

third requirement of the proposed safe 

harbor and enforcement forbearance 

policy.275 Finally, Section 

310.4(b)(1)(B)(iii) tracks the fourth 

requirement of the proposed safe harbor 

and forbearance policy, which mandates 

that sellers and telemarketers comply 

with all other requirements of the TSR 

and federal and state law.276

Sections 310.4(b)(1)(v)(B)(ii)(A) and 

(B) expand on the third requirement of 

the proposed safe harbor and 

forbearance policy by clarifying that 

prerecorded calls must present an 

opportunity to assert an entity-specific 

Do Not Call request if the call ‘‘could be 

answered in person by a consumer’’

[subparagraph (A)], or if the call could 

be answered ‘‘by an answering machine 

or voicemail service’’ [subparagraph 

(B)].277 Two separate provisions are 

necessitated in the interest of 

minimizing the disclosures required. If 

a seller or telemarketer provides both 

voice and keypress-activated opt-out 

mechanisms, and is able to determine 

whether a call is answered by a person 

or by an answering machine or 

voicemail service, it may tailor the 

message to include the appropriate optout message and mechanism. 

Section 310.4(b)(1)(v)(B)(ii)(A) 

specifies that, if there is any possibility 

that a call could be answered in person 

by a consumer, an automated interactive 

opt-out mechanism must be available 

throughout the call. The provision 

permits either a voice or keypressactivated opt-out mechanism to be used, 

or both in combination. The provision 

further requires that, once invoked, the 

interactive mechanism must 

automatically add the number called to 

the seller’s entity-specific Do Not Call 

list, and must then promptly terminate 

the call, as recommended by some 

industry comments.278 As the 

Commission has previously stated, the 

inability of some consumers to use their 

telephone in an emergency because a 

prerecorded message cannot be 

disconnected simply by hanging up 

‘‘creates legitimate cause for 

concern.’’279 To ensure that all 

consumers can quickly disconnect a 

prerecorded call in an emergency, it is 

necessary to require, as this provision 

does, that sellers and telemarketers use 

an opt-out mechanism that 

automatically records the number called 


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280 MinutePoll at 8; Global at 11; see DMA at 2 

(noting that a keypress ‘‘is unambiguous, and the 

consumer knows with certainty that they have 

made the request’’). 

281 Consumer advocates make the point that 

rotary dial telephone users will be unable to assert 

opt-out requests in recorded messages with only 

keypress opt-out mechanisms. See note 48, supra. 

The record contains nothing, however, indicating 

that any appreciable number of households still use 

such antiquated equipment, and it is reasonable to 

conclude that few remain. The record does suggest, 

in contrast, that the industry’s use of voice 

recognition systems is growing and is likely to 

increase. The Commission therefore believes that it 

is not necessary for the amendment to mandate 

inclusion of potentially costly voice recognition 

capability in the required interactive opt-out 

mechanism. 

282 NAA at 3 (Newspapers ‘‘have more than 40 

million existing residential subscribers, and to 

require newspaper circulation departments to 

contact each of these subscribers to obtain written 

consent would be exceptionally unreasonable and 

burdensome’’); NNA at 5 (‘‘[T]he burden of 

contacting a large database to obtain written 

consent would far outweigh any benefit specific 

express consent may provide’’). 283 E.g., Draper’s at 1; Message at 5. 284 Message at 6. 285 SmartReply at 6, 22–23. SmartReply notes that 

many ‘‘top 100’’ retailers have EBR customer 

databases of from 15–30 million customers. 

SmartReply at 18. 

286 Global at 11. See the discussion in Section 

II.D.2.a, supra. 

287 Soundbite at 19 (a ‘‘reasonable period’’); 

Countrywide at 3 (3 months); DMA at 2 (6 months); 

MP at 3 (6 months); Xpedite at 5 (6 months); Career 

at 5–6 (at least 6 months); MinutePoll at 10 (at least 

6 months); IAC at 2, 10 (at least 6 months); VMBC 

at 2 (6–8 months); SmartReply at 15 (18 months for 

‘‘Top 100’’ Fortune 500 retailers with 15 million 

customers in their databases). 

288 DMA at 9. 

289 MinutePoll at 10. 

290 NAA at 9–10. 

on the entity’s Do Not Call list, as 

interactive systems now in use 

permit,280 rather than allow the 

potential delays of connecting the call to 

an operator or sales agent to add the 

number to the list.281

Section 310.4(b)(1)(v)(B)(ii)(B), in 

turn, details what is required if there is 

any possibility that a prerecorded call 

could be answered by an answering 

machine or voicemail service. Like the 

proposed safe harbor, which permitted 

sellers and telemarketers to provide a 

toll-free number consumers could call to 

opt out, this provision requires that 

such a number be provided and 

disclosed promptly at the outset of the 

call because industry data shows that 

80–85 percent of all prerecorded calls 

are delivered to answering machines 

and voicemail services. The provision 

further requires that the number connect 

directly to an automated interactive optout mechanism that is accessible at any 

time throughout the duration of the 

telemarketing campaign. This is 

necessary to ensure that consumers can 

easily and immediately assert their optout rights, regardless of the time of day 

when they listen to their messages, 

without the additional burden of having 

to wait to opt out until the next business 

day during regular business hours when 

an operator would be available to record 

the opt-out request. 

Section 310.4(b)(1)(v)(C) provides a 

clarification requested by the industry. 

It specifies that ‘‘any call that complies 

with all applicable requirements’’ of the 

amendment will not violate the call 

abandonment prohibition in Section 

310.4(b)(1)(iv) of the TSR. This 

provision is intended to provide 

assurance that a fully compliant 

prerecorded call will not violate the call 

abandonment prohibition solely because 

the person who answers is connected 

within two seconds to a recording, 

rather than to a telemarketer, as the call 

abandonment prohibition requires. 

Finally, Section 310.4(b)(1)(v)(D) 

provides an exemption from all the 

requirements of the amendment for 

certain prerecorded healthcare calls. For 

the reasons discussed in Section II.G.2 

below, the Commission is exempting 

outbound telephone calls made by or on 

behalf of a covered entity or its business 

associate, as those terms are defined in 

the HIPAA Privacy Rule. 

F. Implementation Issues 

A number of industry comments 

urged two related implementation 

measures. First, many industry 

comments ask that their databases of 

current EBR customers be 

‘‘grandfathered,’’ either temporarily or 

permanently, to ease the transition to 

the written agreement requirement. 

Second, these and other industry 

comments also request that the 

Commission provide an adequate 

‘‘phase-in’’ period to allow time for 

industry education efforts and 

preparation of systems to comply. 

1. Requests for ‘‘Grandfathering’’

Existing Customer Databases 

Several comments urged that the 

Commission allow sellers to continue 

placing prerecorded message calls to 

established customers without requiring 

those customers’ agreement to continue 

receiving them. Two industry comments 

seek permanent ‘‘grandfathering,’’

whereby they would have no obligation 

to obtain consent from their established 

customers, and would need to seek 

consent only from new customers 

acquired after the written agreement 

requirement takes effect.282 Others seek 

a more limited type of 

‘‘grandfathering.’’283 One advocates 

treating established customers who have 

been given an interactive opportunity to 

opt out of prerecorded messages calls, 

but have not done so, as having given 

express consent.284 Another asks that 

existing EBR customers be 

‘‘grandfathered’’ where ‘‘policies are in 

place to gradually convert willing 

customers’’ into ‘‘customers who have 

provided consent,’’ because this would 

give businesses an ‘‘incentive to comply 

immediately, and time to migrate so that 

their business does not suffer’’ the harm 

of a firm deadline for the conversion.285

Finally, one comment argues that 

companies should be permitted to 

obtain consent from established 

customers with a telephone keypress 

mechanism.286

The industry comments that advocate 

some form of ‘‘grandfathering’’ of 

sellers’ EBR customers argue that it will 

be costly and time-consuming for sellers 

to seek agreements to receive 

prerecorded messages from every EBR 

customer. The Commission is keenly 

aware of this concern, and accordingly 

has decided to defer the effective date 

of the written agreement requirement for 

a full year during which sellers and 

telemarketers may continue to place 

prerecorded calls to the seller’s existing 

and new EBR customers, as part of the 

phase-in of the amendment’s 

requirements discussed below. 

2. Requests for a ‘‘Phase-In’’ Period 

Many of the industry comments 

request that the Commission defer the 

effective date of the proposed 

amendment for some period of time 

after it is issued in order to give 

businesses time to prepare to comply.287

One comment explains that, depending 

on the form of consent required, it will 

take time for businesses to redesign web 

sites, revise telemarketing scripts, and 

prepare and print new credit card and 

loyalty program applications and 

response cards to obtain consent from 

new customers, as well as to use up 

existing supplies of these materials and 

create new record-keeping systems and 

procedures to store and access the new 

consents they obtain.288 Another adds 

that small business telemarketers will 

need time, given a 9–12 month 

development and sales cycle, to find 

new business options to replace 

anticipated revenue losses from 

reductions in prerecorded messaging.289

A third comment points out that time 

will also be needed for industry 

education efforts.290

These requests from the industry 

comments for a ‘‘phase in’’ period 

before the amendment takes effect range 

from 3 to 18 months. In order to ensure 

that there is sufficient time for industry 

to conduct needed training on the new 

requirements and to transition to 


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291 See Section II.B.5(b)(i), supra. 

292 Silverlink Communications, Inc. and Eliza 

Corp. (Winslow) (‘‘Silverlink/Eliza’’), No. 586, at 16; 

medSage Technologies, LLC (‘‘medSage’’), No. 606, 

at 8; PolyMedica Corp. (‘‘PolyMedica’’), Nos. 594, 

609, at 4–5. Two comments seek only an extension 

of the Commission’s enforcement forbearance 

policy, PMSI–Tmesys, No. 215, at 2; Gorman Health 

Group, No. 102, at 2; while another asks only that 

prescription refill reminders be considered 

‘‘informational’’ calls that are not covered by the 

proposed amendment. National Association of 

Chain Drug Stores, No. 634, at 2. See also, e.g., 

Sliwa, No. 113 (consumer urging an ‘‘exception’’ for 

‘‘lifemarketing’’ healthcare calls); Merrow, No. 94 

(objecting to any restriction on healthcare calls); 

Conway, No. 81; Erwin, No. 133; Genter, No. 68; 

Lopez, No. 73; Pace, No. 104. 

293 medSage at 8; PolyMedica at 4–5; Access 

Diabetic Supply LLC (‘‘Access’’), No. 630, at 12. 

294 DMA at 6–7; cf. Heritage at 2 (citing First 

Amendment cases). One consumer comment also 

supports an exemption for charities. Maddock, No. 

137, at 1–2. 

295 NNA at 5. The 13 brief comments received 

from small and medium sized community 

newspapers generally express their opposition to 

any restriction on their ability to use prerecorded 

telemarketing messages to contact established 

customers, but do not request an exemption. 

Thomasville Times-Enterprise, No. 175; Stillwater 

News Press, No. 176; Joplin Globe, No. 177; The 

News and Tribune, No. 178; The Tribune-Democrat, 

No. 179; Effingham Daily News, No. 180; EagleTribune Publishing Co., No. 181; Clinton Herald, 

No. 187; CNHI - Terre Haute Tribune Star, No. 190; 

Pharos-Tribune, No. 191; Eagle Tribune, No. 214; 

Ada Evening News, No. 445; and Community 

Newspaper Holdings, Inc., No. 464. 

296 IAA at 11. 

297 CBA at 4 (requesting an express exemption); 

Wells Fargo & Co., No. 573, at 2 (seeking either an 

exemption or non-enforcement policy statement); 

Visa U.S.A., Inc., No. 597, at 2 (advocating a nonenforcement policy statement). Although CBA 

advances an argument that the requested exemption 

is required by the Telemarketing Act, based on the 

status of exempt entities, the argument does not 

address the activity basis for the Commission’s 

assertion of jurisdiction over third-party 

telemarketers that are employed by exempt entities. 

Commission Advisory Opinion, Stonebridge Life 

Insurance Co. (Aug. 19, 2003), available at (http:// 

www.ftc.gov/os/2003/08/tsradvopinion.htm). 

298 60 FR 43842, 43859 (Aug. 23, 1995). In 

addition, the Telemarketing Act expressly 

empowers the Commission to prevent violations of 

the TSR ‘‘in the same manner, by the same means, 

and with the same jurisdiction, powers, and duties 

as though all applicable terms and provisions of the 

Federal Trade Commission Act (‘FTC Act’), 15 USC 

41 et seq., were incorporated into and made a part 

of this chapter.’’ 15 USC 6105(b) (emphasis added). 

Among the powers conferred by the FTC Act, and 

thus by the Telemarketing Act, is authority to grant 

exemptions, pursuant to a petition or on the 

Commission’s own motion, if ‘‘the Commission 

finds that the application of a rule . . . to any person 

or class of persons is not necessary to prevent the 

unfair or deceptive act or practice to which the rule 

relates.’’ 15 USC 57a(g)(2). Section 553 of the 

Administrative Procedure Act (‘‘APA’’), 5 USC 553, 

which governs any such exemption action, requires 

a notice and comment proceeding except ‘‘when the 

agency for good cause finds (and incorporates the 

finding and a brief statement of reasons therefore 

in the rules issued) that notice and public 

procedure thereon are impracticable, unnecessary 

or contrary to the public interest.’’ 5 USC 

553(b)(3)(B) (emphasis added). The Commission has 

determined that there is good cause to adopt the 

two exemptions discussed below. No further notice 

and comment is necessary or appropriate because 

the position of all interested parties on the relevant 

issues has been adequately developed in this 

proceeding, and no public interest purpose would 

be served by protracting this proceeding further. 

revised contracts, web pages and 

systems and procedures needed to 

preserve evidence of customer 

agreements to receive prerecorded calls 

after the effective date, the Commission 

has decided to provide a one-year 

phase-in period from the date of 

publication of the final amendment in 

the Federal Register for the express 

written agreement provisions added to 

Section 310.4(b)(1)(v)(A) of the TSR by 

the final amendment. 

There is no evident reason, however, 

to provide an equally prolonged phasein period for the automated interactive 

opt-out provisions of the amendment. 

Because sellers and telemarketers assert 

they are already complying with the 

Commission’s forbearance policy, and 

many already are using systems with 

automated interactive keypress or voiceactivated opt-out capabilities,291 the 

Commission has no reason to believe 

that a great deal of time will be needed 

for implementation of these 

requirements. Accordingly, the 

Commission has determined that the 

automated interactive opt-out 

provisions should take effect on 

December 1, 2008. 

Thus, beginning on December 1, 2008, 

prerecorded messages, whether 

delivered by sellers and telemarketers to 

consumers who answer the telephone or 

to answering machines or voicemail 

services, will be required to comply 

with the new automated interactive optout requirements added to the TSR as 

Section 310.4(b)(1)(v)(B) by the 

amendment. Although the 

Commission’s previously announced 

enforcement forbearance policy will be 

revoked on that date because it is 

inconsistent with the amendment’s 

automated interactive opt-out 

requirements, the Commission will 

continue to permit sellers to place 

prerecorded calls to both existing and 

new EBR customers for an additional 

nine months, until September 1, 2009, 

except to an EBR customer who uses the 

required automated interactive 

mechanism to opt out or whose EBR has 

expired. Thereafter, sellers and 

telemarketers may place prerecorded 

calls only to consumers from whom 

they have obtained signed, written 

agreements to receive such calls. Thus, 

after the amendment takes complete 

effect on September 1, 2009, the written 

agreement requirement will replace the 

EBR requirement as the sole 

authorization for continuing to place 

prerecorded message calls to numbers 

on the Registry, although an EBR will 

continue to serve as authorization for 

placing live telemarketing calls to 

consumers. 

G. Exemptions 

Several industry comments seek 

exemptions from the requirements of 

the proposed amendment. These 

comments urge exemptions for 

healthcare-related calls governed by 

HHS regulations issued pursuant to 

HIPAA,292 or by Medicare requirements 

for enrolled durable medical equipment 

(‘‘DME’’) suppliers;293 for non-profit 

entities that use third-party telefunders 

to deliver prerecorded solicitations;294

for small businesses as defined by Small 

Business Administration regulations;295

and for prerecorded messages offering 

contract renewals or changes to existing 

contracts addressing post-contract 

events or changed circumstances.296

Other comments urge either an 

exemption or non-enforcement policy 

statement that would permit entities 

that are not themselves subject to FTC 

jurisdiction to employ third-party 

telemarketers (over which the FTC does 

have jurisdiction) to deliver prerecorded 

messages without the express written 

agreement of their EBR customers, as 

they themselves may do under FCC 

rules.297

1. Legal Authority for Granting 

Exemptions 

In adopting the original TSR in 1995, 

the Commission incorporated a number 

of exemptions. At that time, the 

Commission stated: 

The Commission has concluded that it is 

vested by the Telemarketing Act with 

discretion both in determining what 

constitutes ‘‘telemarketing’’ under the Act 

and in defining deceptive and abusive 

practices. In exercising that discretion, the 

Commission has decided that narrowlytailored exemptions are necessary to 

prevent an undue burden on legitimate 

businesses and sales transactions. Section 

310.6 enumerates these exemptions. The 

Commission determined the advisability of 

each exemption after examining the Act 

and considering the following factors: (1) 

Whether Congress intended that a certain 

type of sales activity be exempt under the 

Rule; (2) Whether the conduct or business 

in question already is regulated extensively 

by Federal or State law; (3) Whether, based 

on the Commission’s enforcement 

experience, the conduct or business lends 

itself easily to the forms of deception or 

abuse that the Act is intended to address; 

and (4) Whether requiring businesses to 

comply with the Rule would be unduly 

burdensome when weighed against the 

likelihood that sellers or telemarketers 

engaged in fraud would use an exemption 

to circumvent Rule coverage.298


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299 See 16 CFR 1.25. The other industry requests 

for relief, for small businesses, for contract renewals 

and modifications, and for third-party telemarketers 

covered by the TSR that are employed by 

businesses not subject to FTC jurisdiction, do not 

make a persuasive case for exemption under the 

exemption criteria discussed above. 

300 60 FR 43842 at 43859 (Aug. 23, 1995). 

301 Id. 

302 See, e.g., 16 CFR 310.6(b)(1) (partial 

exemption for sale of pay-per call services subject 

to the Telephone Disclosure and Dispute Resolution 

Act); 16 CFR 310.6(b)(2) (partial exemption for sale 

of franchises subject to the Franchise Rule); 16 CFR 

310.6(b)(7) (full exemption for telephone calls 

between a telemarketer and any business). 

303 16 CFR 310.2(cc). 

304 Silverlink/Eliza at 3–5; medSage at 2; see 

Access at 2; PolyMedica at 2; PMSI–Tmesys, at 2. 

305 For calls to be covered under the TSR, they 

must be part of 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.’’ 16 CFR 

310.2(cc). The commenters addressing the need for 

an exemption for health-related HIPAA-covered 

calls largely assume, but do not methodically 

analyze, whether the calls in question meet each 

element of the definition. While prerecorded calls 

to induce consumers to make an initial selection of 

a particular healthcare plan or provider would meet 

the definition, these calls by a plan or provider 

previously selected—which are, for the most part, 

in the nature of medical treatment and prevention 

reminders—arguably do not constitute a ‘‘plan, 

program, or campaign which is conducted to 

induce’’ purchases. The October 4, 2006, Federal 

Register notice drew a careful distinction between 

commercial telemarketing calls and purely 

‘‘informational’’ calls. The notice made it clear that 

the Commission considers calls ‘‘such as 

notifications of flight cancellations, reminders of 

medical appointments and overdue payments, and 

notices of dates and times for delivery of goods or 

service appointments’’ as informational in nature, 

and not for the purpose of conveying a sales 

message. ‘‘Such strictly informational calls . . . 

whether live or prerecorded, have never been 

covered by the TSR.’’ 71 Fed. Reg. at 58719. 

306 medSage at 5; Access at 10. 

307 Access at 11–12. DME suppliers are required, 

for example, to document the frequency with which 

a patient is actually using diabetic supplies, and of 

the replacement of nebulizer accessories, such as 

respiratory supplies, Id., and are prohibited from 

shipping many replacement supplies, particularly 

diabetic testing supplies, on a regular basis unless 

the patient has nearly exhausted a prior supply. Id. 

at 2–3. 

308 Access at 8; medSage at 3. 

The Commission has determined that, 

for different reasons, it is appropriate to 

incorporate into the amendments 

adopted herein two suggested 

exemptions: one for healthcare-related 

prerecorded message calls subject to 

HIPAA and one for prerecorded message 

charitable fundraising calls by thirdparty telemarketers.299

2. Exemption for Healthcare-Related 

Prerecorded Calls Subject to HIPAA 

Healthcare-related prerecorded 

message calls subject to HIPAA include 

not only calls by medical providers and 

their third-party telemarketers, but also 

calls by DME suppliers and by Medicare 

Part D providers and their third-party 

telemarketers. The purpose of the 

HIPAA regulations is to maintain the 

privacy of personally identifiable 

medical information, whereas the 

purpose of the amendment is to protect 

consumers’ privacy in their homes. 

Nonetheless, the Commission is 

persuaded by certain of the commenters’

arguments that these purposes are 

related and intertwined and, moreover, 

that the placing of such calls ‘‘already 

is regulated extensively by Federal . . . 

law.’’300 Further, the Commission’s law 

enforcement experience does not 

suggest that the placing of healthcarerelated prerecorded message calls 

subject to HIPAA ‘‘lends itself easily to 

the forms of deception or abuse that the 

[Telemarketing] Act is intended to 

address.’’301 Therefore, the Commission 

has determined that an exemption—

similar to several original exemptions 

incorporated into the Rule in 1995302—

is warranted for healthcare-related 

prerecorded message calls subject to 

HIPAA. 

a. Arguments Advanced for an 

Exemption 

Unlike the other exemption requests, 

the comments seeking exemption of 

healthcare-related prerecorded calls 

governed by HIPAA and by Medicare 

requirements for enrolled DME 

suppliers provide extensive and specific 

information about the industry and 

practices for which an exemption is 

sought, detailed rationales, and draft 

language for an exemption. An 

exemption is necessary, the commenters 

contend, because many important 

healthcare-related calls might be 

considered ‘‘telemarketing’’ calls, rather 

than ‘‘informational’’ calls not covered 

by the TSR, because they are arguably 

part of ‘‘a plan, program, or campaign 

conducted to induce the purchase of 

goods or services.’’303 These 

prerecorded calls include flu shot and 

other immunization reminders, 

prescription refill reminders, health 

screening reminders; calls to obtain 

permission to contact doctors for 

renewal of medication or medical 

supply orders; calls to obtain 

documentation needed for billing health 

plans; calls by home health agencies to 

follow-up on patients for six months 

after discharge; calls monitoring patient 

compliance with prescribed medical 

therapies; and calls encouraging 

enrollment in disease management or 

treatment programs, and in migration 

from branded to generic drugs, and from 

retail to mail order pharmacies.304

Commenters fear that such calls may not 

be considered to be strictly 

‘‘informational’’ because they can result 

in a payment or co-pay for medication, 

durable medical equipment, or medical 

services.305

At any rate, the crux of the arguments 

seeking exemption is the contention that 

Congress, in the case of DME suppliers, 

and HHS, in the case of HIPAA, has 

already considered and prescribed rules 

based on important public policy 

considerations that govern healthcarerelated calls that might be subject to the 

proposed amendment under the TSR’s 

definition of ‘‘telemarketing.’’ If these 

requirements have not occupied the 

field, the comments urge the 

Commission to consider the weight that 

the Congressional and administrative 

determinations have given to the 

improvement of healthcare on a costefficient basis, and exempt these 

healthcare-related calls from any 

restriction in the TSR on prerecorded 

telemarketing calls. 

i. DME Supplier Telephone Solicitation 

Restrictions 

Two commenters emphasize that calls 

from DME suppliers—permitted by 

statute and by HHS regulations—

provide measurable public benefits in 

the treatment of patients by reducing the 

taxpayer-supported costs of the 

Medicare and Medicaid programs and 

by measurably improving patient 

compliance rates with home treatment 

regimens. This results in improved 

clinical outcomes and a reduction in 

costly complications.306 The use of 

prerecorded messages, one commenter 

asserts, is necessary not just to control 

costs, but to ensure that elderly and 

chronically ill patients receive uniform, 

clear messages they can understand and, 

with the aid of interactive technology, to 

enable DME suppliers to obtain patient 

responses that provide documentation 

required by Medicare rules.307

These calls are subject to significant 

federal regulation similar in purpose to 

the prerecorded call amendment. As 

two of the comments point out,308

Congress has expressly prohibited DME 

suppliers and their agents by statute 

from unfettered telephone solicitation of 

Medicare patients. The statute states 

that a DME supplier ‘‘may not contact 

an individual enrolled under this part 

by telephone’’ except in three specific 

circumstances: (1) ‘‘The individual has 

given written permission to the supplier 

to make contact by telephone regarding 

the furnishing of the covered item;’’ (2) 

‘‘The supplier has furnished a covered 

item to the individual and the supplier 

is contacting the individual only 

regarding the furnishing of the covered 


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309 HHS implementing regulations specify that 

this provision is limited to arranging delivery of the 

item. 42 CFR 424.57(c)(11). 

310 42 USC 1395m(a)(17)(A). 

311 42 USC 1395m(a)(17)(B). 

312 42 USC 1395m(a)(17)(C). 

313 medSage at 4. 

314 42 CFR 424.57(c). DME suppliers that violate 

the terms of their certification are subject to adverse 

regulatory action by HHS. E.g., Medisource Corp. v. 

CMS, Docket No. A–05–112 (HHS Department 

Appeals Board, Jan. 31, 2006). 

315 medSage at 4. 

316 Silverlink/Eliza at 9, citing HIPAA, Pub. L. 

No. 104–191, § 261, 110 Stat. 1936 (1996) (codified, 

as amended, at 42 USC 1320d). 

317 Id. at § 1172(b) (codified, as amended, at 42 

USC 1320d-1(b)). 

318 Standards for Privacy of Individually 

Identifiable Health Information, 45 CFR Parts 160 

and 164. 

319 A ‘‘covered entity’’ is defined as ‘‘(1) A health 

plan; (2) A health care clearinghouse; and (3) A 

health care provider who transmits any health 

information in electronic form . . . .’’ 45 CFR 

160.103. One comment explains that health 

insurers, home healthcare providers that bill 

electronically, and billing services are therefore 

‘‘covered entities.’’ medSage at 5 n.7. 

320 Businesses that make prerecorded calls on 

behalf of a ‘‘covered entity’’ are ‘‘business 

associates’’ of the covered entity, as are Medicare 

suppliers and pharmacies. See 45 CFR 160.103. 

321 medSage at 5. See 45 CFR 164.508(a)(3)(i) (‘‘a 

covered entity must obtain an authorization [from 

the patient] for any use or disclosure of protected 

health information for marketing’’). 

322 Id. See also 45 CFR 164.501 (‘‘Marketing’’

definition specifically prohibiting (in § (2)) a 

covered entity from disclosing, without patient 

consent, protected health information to another 

entity that would enable the other entity (or its 

affiliates) to communicate with patients of the 

covered entity to market the other entity’s products 

or services); 67 FR 53182, 53188–89 (Aug. 14, 2002) 

(announcing the addition of ‘‘a new provision to the 

definition of ‘marketing’ [45 CFR 164.501(2)] to 

prevent situations in which a covered entity could 

take advantage of the business associate 

relationship to sell protected health information to 

another entity for that entity’s commercial 

marketing purposes’’). 

323 Silverlink/Eliza at 9–10; medSage at 6. 

324 Access at 6. 

325 The final Privacy Rule permits only the 

following types of communications with patients 

without their prior authorization: 

(i) To describe a health-related product or service 

. . . that is provided by, or included in a plan of 

benefits of, the covered entity making the 

communication . . .; (ii) For treatment of the 

individual; or (iii) For case management or care 

coordination for the individual, or to direct or 

recommend alternative treatments, therapies, health 

care providers, or settings of care to the individual. 

45 CFR 164.501. One comment quotes HIPAA 

guidance that ‘‘‘many services, such as 

[prescription] refill reminders or the provision of 

nursing assistance through a telephone service, are 

considered treatment activities if performed by or 

on behalf of a health care provider, such as a 

pharmacist.’’’ PolyMedica at 3. 

326 medSage at 5 & n.6. 

327 The comments emphasize that available 

alternatives to the use of interactive prerecorded 

messages are more expensive, less efficient or less 

successful in communicating with patients, 

Silverlink/Eliza at 5; medSage at 5; and would 

strain the ability of the healthcare system to comply 

without passing on significant cost increases. 

PolyMedica at 3 (a switch to live calls would be cost 

prohibitive); Access at 2–3 (DME suppliers work on 

‘‘very small profit margins’’ and the cost of new 

communication systems would detract from ability 

to serve patients). 

item;’’309 and (3) ‘‘If the contact is 

regarding the furnishing of a covered 

item other than a covered item already 

furnished to the individual, the supplier 

has furnished at least 1 covered item to 

the individual during the 15-month 

period preceding the date on which the 

supplier makes such contact.’’310

Other subsections of this provision, 

enforced by the HHS Inspector General, 

prohibit Medicare payment for any 

items furnished to an individual by a 

supplier that knowingly violates the 

telemarketing prohibition,311 and, in the 

case of a pattern of unlawful telephone 

solicitations, exclusion from 

participation in the DME supplier 

program.312 In addition, HHS Medicare 

regulations provide for civil penalties of 

up to $12,000 for any DME supplier that 

fails to make a refund to a Medicare 

beneficiary for a covered service for 

which payment is precluded due to a 

violation of the telephone solicitation 

prohibition.313

The commenters add that to be 

enrolled as a DME supplier eligible to 

receive payments for an item covered by 

Medicare under the Social Security Act, 

a company must submit an application 

for billing privileges, and receive 

approval from the Centers for Medicare 

and Medicaid Services (‘‘CMS’’). The 

application requires DME suppliers to 

meet (and continue to meet as a 

condition of receiving payments) certain 

quality standards that serve to provide 

further protection for consumers. They 

include requirements that the DME 

supplier operate its business in 

compliance with all federal and state 

licensing requirements from a physical 

facility that can be inspected by CMS 

(and not a mere postal box), and 

maintain liability insurance and a 

customer complaint process.314 This 

‘‘detailed and protective’’ regulatory 

scheme, as one commenter notes, 

operates ‘‘to screen [out] scofflaws’’ and 

‘‘to protect patients from, inter alia, 

abusive telemarketing.’’315

ii. HIPAA Marketing Restrictions 

Silverlink/Eliza note that when 

Congress enacted HIPAA in 1996, one of 

its stated goals was to ‘‘improve . . . the 

efficiency and effectiveness of the 

health care system by encouraging . . . 

the electronic transmission of certain 

health information.’’316 In enacting 

HIPAA to set standards under which the 

healthcare sector could share and use 

health information and communicate 

with patients, Congress recognized that 

the use of advanced communications 

technology could compromise an 

individual’s privacy interests, and 

accordingly, directed HHS to 

promulgate rules that would 

appropriately balance patient interests 

in protecting the privacy of their 

healthcare information with the 

Congressional ‘‘objective of reducing the 

administrative costs of providing and 

paying for healthcare.’’317

Another comment points out that the 

HIPAA Privacy Rule318 issued by HHS 

as directed by Congress, prohibits a 

‘‘covered entity’’319 and its ‘‘business 

associate’’320 from using or disclosing 

‘‘protected health information’’—

information relating to a patient’s 

medical condition or treatment—for 

purposes of marketing, without specific, 

written authorization from the 

patient.321 The commenter emphasizes 

that this prohibition covers not only 

written communications, but ‘‘any form 

of telephonic communication, whether 

through a live caller or a prerecorded 

message, regardless of whether there is 

a pre-existing business relationship,’’

and in this regard, ‘‘is far broader than’’

the prerecorded call amendment.322

Two of the commenters point out that 

although HHS ‘‘originally proposed 

privacy rules that would not have 

excluded healthcare communications 

from their patient authorization 

requirement,’’ HHS ultimately 

concluded, after two full notice and 

comment rulemaking proceedings, that 

such a restriction on healthcare 

communications ‘‘would materially 

affect the quality and efficiency of 

healthcare.’’323 Thus, in order to allow 

‘‘the flow of health information needed 

to provide and promote high quality 

health care and to protect the public 

health and well being,’’324 the final 

HIPAA Privacy Rule exempts only 

healthcare-related communications from 

the requirement of prior authorization 

by patients.325 The requirements of the 

Privacy Rule and its exemptions are 

enforced by the Office of Civil Rights in 

HHS, with violations subject to both 

civil and criminal penalties, and 

therefore, according to one comment, 

‘‘the ‘cost’ of violating HIPAA can be 

enormous.’’326

iii. Improved Healthcare Outcomes 

The comments advocating an 

exemption for healthcare-related 

prerecorded message calls subject to 

HIPAA emphasize that the ‘‘opt-in’’

requirement of the proposed 

amendment would jeopardize the 

progress that interactive prerecorded 

messages have made in improving 

patient outcomes and helping control 

healthcare costs.327 As one comment 


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328 Silverlink/Eliza at 2; see also Silverlink /Eliza 

Corp., Petition Requesting That the FTC Maintain 

its Current Enforcement Policy Permitting the Use 

of Prerecorded Messages (When There Is an 

Established Business Relationship) for the Narrow 

Subset of Health-Related Calls Made by Entities 

Regulated under HIPAA (‘‘Silverlink Petition’’), 

available at (http://www.ftc.gov/os/comments/ 

telemarketingrulefees/061130ftcPetition.pdf), at 6 

n.14; cf. Access at 5 (elderly and chronically ill 

patients not likely to respond quickly to request for 

written permission for use of prerecorded 

messages). 

329 Silverlink/Eliza at 3. 

330 Silverlink/Eliza at 3–4, 6; medSage at 5; see 

also Silverlink Petition at 6–7. 

331 Silverlink/Eliza at 8, 11; Access at 7, 9–10. 

332 See note 86, supra, and accompanying text. 

333 Silverlink Survey at 5. 

334 Silverlink/Eliza at 7–8 & n.4; Access at 8. 

335 Silverlink Survey at 1. See 68 FR 4580, 4593 

(Jan. 29, 2003) (40 percent of consumers who 

commented favored an EBR exemption to the TSR). 

336 Silverlink/Eliza at 8 (noting that only 50 of 

140,000 patients who received an automated 

prescription refill call opted out, and that only 10 

of 60,000 Medicaid members who received an 

automated interactive call opted out); Silverlink 

Petition at 7 (reporting that only 25 of 100,000 

Medicaid members who received interactive 

automated calls opted out). Because it is not clear 

when or whether an opt-out option was provided 

in these calls, and the number of live answers is not 

provided, the Commission does not rely on this and 

similar reports of low rates of complaints and optouts for healthcare calls. 

337 Silverlink/Eliza at 8 (citing a 20 percent 

response rate). 

338 Id. at 7. 

339 PMSI–Tmesys at 1–2. See also CenterPost at 

1 (reporting that ‘‘66–82% of customers renew a 

policy or prescription in an automated call’’); cf. 

PolyMedica at 2 (asserting that its interactive calls 

are ‘‘generally welcomed by patients’’ and noting 

that of its 913,000 patients, 25,000 refilled 

prescriptions in response to interactive calls in 

November 2006, and that it expected an additional 

29,000 to do so in December 2006). 

340 Silverlink/Eliza at 12; medSage at 6–7. 

341 medSage at 4. In addition, one request argues 

that the Commission provided inadequate notice of 

the proposed amendment to the healthcare 

industry, and that the rulemaking should be 

reopened so that their requests can be considered, 

if an exemption is not granted. Silverlink/Eliza at 

12–13. 

342 See notes 329–330, supra, and accompanying 

text. 

explains, while proactive patients who 

are attentive to their healthcare may be 

likely to provide a written agreement to 

authorize prerecorded messages from 

their healthcare providers, such 

reminder and other communications are 

most needed by the patients who are 

least attentive to their healthcare—those 

who ‘‘frequently procrastinate or make 

ill-informed decisions’’—and therefore 

are least likely to get around to 

responding to requests for authorization 

to receive such calls.328 Thus, for 

example, as one commenter reports, ‘‘up 

to 70% of patients with long-term 

prescriptions fall off therapy’’ in the 

absence of prescription refill reminders, 

with resulting costly adverse impacts, 

including increased ‘‘hospitalization, 

morbidity and mortality rates.’’329 Two 

of the comments cite independent 

statistics and studies, including a report 

by the Government Accountability 

Office, as evidence of measurable health 

benefits from the use of interactive 

prerecorded messages in patient care.330

iv. No Record of Coercive or Abusive 

Healthcare Calls 

Two commenters who advocate an 

exemption for healthcare-related 

prerecorded message calls subject to 

HIPAA contend that the record shows 

no history of conduct by those who 

place such calls that is ‘‘coercive or 

abusive.’’331 Both cite the Silverlink 

Survey, discussed above,332 where 45 

percent of the respondents indicated 

they ‘‘would like’’ or ‘‘would not mind’’

automated healthcare reminder calls, as 

evidence showing ‘‘to a ‘statistically 

significant’ degree’’333 that consumers 

are more tolerant of healthcare-related 

calls than other types of calls.334 One 

emphasizes that ‘‘[i]n fact, the level of 

consumer support for automated healthrelated calls is similar to the level of 

consumer support for the established 

business relationship exemption the 

FTC already granted for telemarketing 

calls that use sales representatives.’’335

The comments also cite other 

evidence of consumer acceptance of 

prerecorded healthcare calls. One 

asserts that low opt-out rates show 

consumer approval,336 as does the 

percentage of consumers who respond 

to healthcare messages left on answering 

machines or with another household 

member.337 The comment adds that 

interaction rates also demonstrate 

consumer acceptance of automated 

healthcare calls, noting that the 

percentage of recipients who answer 

and respond to the first question 

without hanging up ‘‘typically exceeds 

75%,’’ whereas ‘‘interaction rates for 

other calls are much lower, 17% for 

financial services and 2% interaction 

rate for utility services.’’338 Other 

comments point to affirmative patient 

action as evidence of acceptance of 

prerecorded healthcare calls. One 

reports that in its 4 million calls 

annually to 500,000 clients for 

prescription refills or medical supply 

reorders, ‘‘better than 50%’’ have 

reordered on average, and reorders have 

sometimes ‘‘exceeded 67%,’’ with fewer 

‘‘than 1% complaints’’ about the calls, 

and ‘‘very few’’ opt-out requests.339

The exemption advocates also argue 

that there is no justification for 

application of the proposed amendment 

to healthcare-related calls, because the 

benefits of healthcare calls ‘‘far 

outweigh any intrusion on privacy 

interests.’’340 One comment adds that 

given the potential civil and criminal 

penalties for violations of the 

restrictions on healthcare related calls, 

patients will be protected from abusive 

marketing calls, and that consequently 

there is no need for the additional 

protection of the proposed 

amendment.341

b. Discussion and Conclusion 

As the comments make clear, in 

addition to generating demonstrable 

improvements in patient outcomes, the 

use of inexpensive prerecorded calls 

plays an important cost-containment 

role in the provision of medical 

services, many of them publicly funded, 

and in facilitating the record-keeping 

that governmental healthcare 

reimbursement regulations require. 

Requiring the prior written agreement of 

patients to receive prerecorded calls 

subject to HIPAA quite obviously could 

burden or jeopardize the improved 

medical outcomes that such calls have 

made possible by enabling healthcare 

providers to achieve higher rates of 

patient compliance with treatment 

regimens at low cost. Government 

Accountability Office reports and other 

studies have shown that the prior low 

rates of patient compliance contributed 

to significantly higher than necessary 

national healthcare costs because they 

resulted in increased hospitalizations, 

morbidity and mortality rates.342 Quite 

apart from the risk that some patients 

might decline to agree to receive such 

calls, requiring written agreements from 

current patients would be inconsistent 

with the healthcare system’s costcontainment mandate. 

The Commission has given careful 

consideration to the possibility of 

exempting healthcare calls from the 

express written agreement requirement 

of the amendment, while requiring that 

they comply with its opt-out provisions. 

The difficulty with such a partial 

exemption in the healthcare context, as 

some of the commenters argue, is that a 

partial exemption may create a health or 

safety risk. The patients who most need 

healthcare calls may be confused as a 

result of age or other health-related 

conditions, and might opt out of the 

calls, thereby preventing their 

healthcare provider from contacting 

them even with a live call to check on 

their condition without violating the 

TSR. For this reason, the Commission is 

persuaded that a complete exemption 

from the amendment for healthcarerelated calls is necessary. 


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343 An argument could be made that Congress did 

not intend DME suppliers in particular, and 

perhaps healthcare providers in general, to be 

subject to the Telemarketing Act, because the 

restrictions on telephone solicitations by DME 

suppliers in 42 USC 1395m(a)(17)(A), which 

include an exemption similar to an EBR, were 

added to the Social Security Act on October 31, 

1994, just over two months after passage of the 

Telemarketing Act on August 16, 1994. Pub. L. No. 

103–432 § 132(a). Because DME suppliers, like 

other healthcare providers, are subject to the HIPAA 

Privacy Rule, an exemption based on that Rule will 

also exempt DME suppliers. 

344 The exemption would not apply to sales of 

over-the-counter medications and dietary 

supplements unless prescribed by a covered entity 

as part of a plan of treatment. 

345 The record contains survey evidence 

indicating that some 45 percent of consumers 

‘‘would like’’ or ‘‘would not mind,’’ getting 

prerecorded healthcare calls. Silverlink Survey, 

Attach. A, at 2. A separate survey question 

demonstrates that consumers are much less willing 

to listen to pure sales calls than to health-related 

calls: When asked how willing they were to listen 

to different kinds of prerecorded calls, 34 percent 

rated their willingness to listen to prerecorded 

health calls at ‘‘4’’ or ‘‘5’’on a 5-point scale, 

compared to only 3 percent who were equally 

willing to listen to calls for discounted rate credit 

cards, and only 5 percent to discount vacation 

package calls. Id., Attach. A, at 3 (using a 5-point 

scale with ‘‘5’’ being the most willing). This 

evidence is confounded by the fact that the survey 

also shows that 12 percent of consumers would be 

‘‘upset’’ if they received a prerecorded call from 

their healthcare company, and that an additional 29 

percent would ‘‘prefer not to be contacted in this 

way.’’ Id., Attach. A, at 2. Nonetheless, considering 

all of the evidence, the Commission is not 

persuaded that it should find that ‘‘the reasonable 

consumer would consider [such calls] coercive or 

abusive of such consumer’s right to privacy.’’ 15 

USC 6102(a)(3)(A). Absent such a finding, the 

Commission lacks authority under the 

Telemarketing Act to apply the prerecorded call 

amendment to healthcare-related calls governed by 

the HIPAA Privacy Rule. 

346 15 USC 57a(g)(2). See note 298, supra. 

347 Because the amendment makes explicit the 

prohibition against such prerecorded messages that 

is implicit in 16 CFR 310.4(b)(1)(iv), the effect of the 

exemption is also to shield calls within the scope 

of the exemption from violation of that provision. 

348 The Commission notes that prior to this 

amendment, for-profit telemarketers calling to 

solicit charitable contributions on behalf of nonprofit organizations—like telemarketers placing 

sales calls—have been subject to the TSR’s call 

abandonment prohibition, which prohibits the use 

of prerecorded messages in all calls answered in 

person by a consumer (except the 3 percent 

permitted under the call abandonment safe harbor). 

For-profit telemarketers calling to solicit charitable 

contributions on behalf of non-profit organizations 

could not use prerecorded messages pursuant to the 

non-enforcement policy, announced in November 

2004, because that policy was limited to 

prerecorded message calls placed to consumers 

with whom a seller had an EBR. An EBR, by 

definition, is based on a commercial transaction, 

not a charitable contribution. Thus, as compared to 

the status quo, this amendment substantially 

reduces restrictions on for-profit telemarketers that 

make calls to solicit charitable contributions on 

behalf of non-profit organizations. 

349 DMA at 6,7; see Heritage, No. 581, at 2. As 

indicated in note 334, supra, the TSR’s defined 

term, ‘‘established business relationship,’’ 16 CFR 

410.2(n), has no applicability to charitable 

solicitations or the activities of those who perform 

them. Rather, the term establishes the parameters of 

an exemption to the Do Not Call Registry 

provisions, which reach neither charities nor the 

for-profit telemarketers that place solicitation calls 

on their behalf. See 16 CFR 310.6(a) (‘‘Solicitations 

to induce charitable contributions via outbound 

telephone calls are not covered by 

§310.4(b)(1)(iii)(B) [the Do Not Call Registry 

provisions] of this Rule’’). Where commenters use 

the term ‘‘established business relationship’’ in the 

context of charitable solicitations, the Commission 

interprets it to mean ‘‘previous donors to or 

members of the non-profit charitable organization.’’

The Commission construes ‘‘members’’ broadly to 

include volunteers, whether or not they have a 

formal membership in the charity. See 68 FR at 

4634 & n.660. 

350 DMA at 6, citing 47 CFR 64.1200(a)(2)(v). 

Significantly, unlike other 

telemarketing calls, the number of 

healthcare-related calls subject to 

HIPAA is limited by the nature of the 

calls, depends on the patient’s health 

and medical condition, and would not 

expose consumers to an unlimited 

number of sellers seeking to generate 

sales.343 For healthy consumers, the 

calls would be limited to infrequent 

annual reminders of check-ups, 

immunizations, or health screenings. 

For consumers with a medical 

condition, the calls would continue 

periodically only for so long as 

prescribed medicine, medical 

equipment or supplies, or home 

healthcare follow-up continue to be 

medically necessary.344 In either case, 

the calls would come from a limited 

number of providers, and would be 

limited in their frequency by the 

medical needs of the patient. 

In summary, the Commission has 

determined to exempt healthcare-related 

prerecorded message calls subject to 

HIPAA from the prerecorded call 

amendment. This determination is 

based on six primary considerations, 

first among them the fact that delivery 

of healthcare-related prerecorded calls 

subject to HIPAA already is regulated 

extensively at the federal level. Second, 

coverage of such calls by the 

amendment could frustrate the 

Congressional intent embodied in 

HIPAA, as well as other federal statutes 

governing healthcare-related programs. 

The third basis for the exemption is that 

the number of healthcare providers who 

might call a patient is inherently quite 

limited—as is the scope of the resulting 

potential privacy infringement—in 

sharp contrast to the virtually limitless 

number of businesses conducting 

commercial telemarketing campaigns. 

Fourth, there is no incentive, and no 

likely medical basis, for providers who 

place healthcare-related prerecorded 

calls to attempt to boost sales through 

an ever-increasing frequency or volume 

of calls. Fifth, the existing record does 

not persuade the Commission that it 

should find that ‘‘the reasonable 

consumer’’ would consider prerecorded 

healthcare calls coercive or abusive.345

Finally, FTC law enforcement 

experience does not suggest that 

healthcare-related calls have been the 

focus of the type of privacy abuses the 

amendment is intended to remedy. For 

these reasons, the Commission has 

determined, pursuant to both its 

authority under the Telemarketing Act 

and its authority under the FTC Act, 

that healthcare-related prerecorded 

message calls subject to HIPAA should 

be exempt, because application of the 

amendment to such calls ‘‘is not 

necessary to prevent the unfair or 

deceptive act or practice [that harms 

consumer privacy] to which the 

[amendment] relates.’’346

Accordingly, the Commission has 

exempted from the requirements of 16 

CFR 310.4(b)(1)(v) any outbound 

telephone call that delivers a 

prerecorded healthcare message made 

by, or on behalf of, a covered entity or 

its business associate, as those terms are 

defined in the HIPAA Privacy Rule, 45 

CFR 160.103.347

3. Exemption for Calls Made by ForProfit Telemarketers to Deliver 

Prerecorded Charitable Solicitation 

Messages on Behalf of Non-Profit 

Organizations 

Concerned that for-profit 

telemarketers using prerecorded 

messages to solicit contributions on 

behalf of non-profit charities otherwise 

would be subject to the requirements of 

the amendment, when prerecorded 

message calls placed by the charities 

themselves are not covered because the 

Commission lacks jurisdiction over nonprofit entities, DMA and Heritage urge 

that such calls be exempted.348

a. Comments Advocating an Exemption 

Both commenters who address this 

issue seek, at a minimum, an exemption 

for such calls made to those with whom 

the charity has an existing relationship, 

‘‘which in most cases would include 

donors or members of [the] charity.’’349

They also argue that the Commission 

should go further, and grant for-profit 

telemarketers a blanket exemption from 

any of the requirements of the 

amendment when soliciting charitable 

contributions. 

DMA emphasizes that analogous FCC 

regulations implementing the TCPA 

permit the use of prerecorded message 

calls without the called party’s consent 

when a call is made ‘‘by or on behalf of 

a tax-exempt nonprofit organization.’’350

DMA further notes that: 

The Commission has crafted different rules 

in the Do Not Call area in the past for 


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Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 51193 

351 DMA at 7. 

352 Heritage at 2. 

353 The Combined Federal Campaign of the 

National Capital Area (‘‘CFCNCA’’) alone supported 

more than 3,400 local, national and international 

charities in 2006–2007. See CFCNCA, Stewardship 

Report to the Federal Community 2006–2007, p.4, 

available at (http://www.cfcnca.org/ 

?pastcampaignresults). 

354 This means that telefunders would be covered 

by subparagraph (B) of the amendment, but not 

subparagraph (A). 

355 68 FR 4636 (Jan. 29, 2003). 

356 447 U.S. 557 (1980). 

357 Id. at 566. 

358 Bd. of Trs. of State Univ. of N.Y. v. Fox, 492 

U.S. 469, 480 (1989). 

359 Frisby v. Schultz, 487 US 474, 485 (1988). 

360 Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 

648 (1994). ‘‘[R]egulations that are unrelated to the 

content of speech are subject to an intermediate 

level of scrutiny because in most cases they pose 

a less substantial risk of excising certain ideas or 

viewpoints from the public dialogue.’’ Turner at 

642, citingClark v. Cmty. for Creative Non-Violence, 

468 U.S. 288, 293 (1984). See also Ward v. Rock 

Against Racism, 491 U.S. 781, 791 (1989) (‘‘[The] 

principal inquiry in determining content neutrality 

is whether the government has adopted a regulation 

of speech because of disagreement with the message 

it conveys’’). See also Am. Target Adver. v. Giani, 

199 F.3d 1241 (10th Cir.), cert. denied, 531 U.S. 811 

(2000) (applying this principle in the context of 

solicitation). 

charities, and should continue to recognize 

the enhanced First Amendment protections 

given to charitable speech and the lower 

concern for abuse. . . . [T]he Commission 

[should] exclude calls made to induce a 

charitable contribution from the scope of 

the [contemplated amendment] . . . . This 

would afford charities the same right to 

contact donors as they were afforded by 

Congress under the TCPA.351

Similarly, Heritage asserts that under 

relevant Supreme Court decisions 

‘‘charities enjoy protected free speech 

rights beyond that provided to 

commercial speech.’’ Heritage also 

asserts that restrictions on for-profit 

telefunders will not enhance consumer 

privacy because these restrictions, due 

to limits on the FTC’s jurisdiction, 

cannot reach non-profit charities that 

own and operate their own equipment 

for making calls that deliver 

prerecorded fundraising messages.352

b. Discussion and Conclusion 

The Commission has given careful 

consideration to the impact of the 

prerecorded call amendment on 

charities that use for-profit telefunders 

to solicit contributions. It has also given 

careful consideration to the impact on 

the privacy of potential donors in their 

homes. 

It is important to note at the outset 

that there is a significant factual 

difference between this exemption 

request and the exemption for 

prerecorded healthcare-related calls 

governed by the HIPAA Privacy Rule 

that bears directly on the governmental 

interest in protecting the privacy of 

consumers in their homes. As 

previously noted, the number of 

healthcare calls is inherently limited by 

the fact that HIPAA regulations specify 

that ‘‘marketing’’ calls unrelated to 

medical treatment can only be made 

with the prior consent of the patient, 

and permit periodic treatment-related 

calls only by the patient’s healthcare 

provider and its business associates. 

The limited number and frequency of 

potential healthcare calls governed by 

HIPAA stands in sharp contrast to the 

large number of charities that inevitably 

compete with each other for donations, 

and the tide of low-cost prerecorded 

charitable solicitation calls consumers 

would likely receive from 

telefunders.353 Thus, while coverage 

under these amendments of prerecorded 

healthcare message calls governed by 

the HIPAA Privacy Rule is not necessary 

to prevent the acts or practices to which 

the amendment relates, the same cannot 

be said for prerecorded message calls 

placed by for-profit telemarketers to 

solicit charitable contributions on behalf 

of non-profit organizations. 

The challenge for the Commission is 

to achieve the appropriate balance 

between the strongly-protected right of 

non-profit organizations to reach donors 

through telefunding, and the privacy 

rights of those potential donors to be 

free, in their own homes, of prerecorded 

message calls that they do not want. To 

achieve what it believes is the best 

balance in this regard, the Commission 

has decided to permit telefunders to 

place prerecorded messages calls to 

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—without first obtaining the 

call recipients’ consent, so long as the 

messages enable the recipients of the 

calls to opt out from the calls they do 

not wish to continue to receive.354

Balancing the competing bedrock 

rights at issue must be achieved within 

the framework of relevant First 

Amendment principles. As the 

Commission noted in the SBP for the 

Amended Rule, the framework for First 

Amendment analysis is more stringent 

with respect to telemarketing that 

solicits charitable contributions than it 

is for commercial telemarketing for the 

purpose of inducing purchases of goods 

or services.355

The analytical framework for 

determining the constitutionality of a 

regulation of commercial speech that is 

not misleading and does not otherwise 

involve illegal activity is set forth in 

Central Hudson Gas & Elec. v. Pub Serv. 

Comm. of N.Y.356 Under that 

framework, the regulation (1) must serve 

a substantial governmental interest; (2) 

must directly advance this interest; and 

(3) may extend only as far as the interest 

it serves357—that is, there must be ‘‘a 

‘fit’ between the legislative ends and the 

means chosen to accomplish those ends 

. . . a fit that is not necessarily perfect, 

but reasonable . . . that employs not 

necessarily the least restrictive means 

but . . . a means narrowly tailored to 

achieve the desired objective.’’358

With regard to the first of these 

criteria, protecting the privacy of 

consumers from unwanted commercial 

telemarketing calls delivering 

prerecorded messages is a substantial 

governmental interest. ‘‘Individuals are 

not required to welcome unwanted 

speech into their own homes and the 

government may protect this 

freedom.’’359The amendment is 

designed to advance the privacy rights 

of consumers by providing them with an 

effective way to limit prerecorded 

message calls, and to make known to 

sellers their wishes not to receive such 

calls. The amendment requires 

consumers’ prior agreement to receive 

prerecorded calls, and must provide an 

interactive opt-out mechanism at the 

outset of the message to enable a call 

recipient to withdraw consent and avoid 

receiving any more prerecorded calls. 

Thus, the amendment directly advances 

the privacy interest at issue, and the 

second Central Hudson criterion is met. 

Finally, with respect to the third 

criterion, the prerecorded message 

amendment comprises a mechanism 

closely and exclusively fitted to the 

purpose of protecting consumers from 

prerecorded telemarketing calls that a 

reasonable consumer would find 

abusive of his or her privacy. 

In considering the more stringent 

analysis that pertains to charitable 

fundraising, the Commission notes, 

preliminarily, that application of the 

prerecorded message amendment to 

charitable solicitation telemarketing 

would be content-neutral. ‘‘Laws that 

confer benefits or impose burdens on 

speech without reference to the ideas or 

views expressed are in most instances 

content neutral.’’360 The prerecorded 

message amendment applies equally to 

all for-profit solicitors, regardless of 

whether they are seeking sales of goods 

or services or charitable contributions, 

and regardless of what may be 

expressed in the solicitation calls 

themselves or the viewpoints of the 

organizations on whose behalf the 

solicitation calls are made. 


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361 ‘‘The Village argues that three interests are 

served by its ordinance: the prevention of fraud, the 

prevention of crime, and the protection of residents’

privacy. We have no difficulty concluding, in light 

of our precedent, that these are important interests 

that the village may seek to safeguard through some 

form of regulation of solicitation activity.’’

Watchtower Bible & Tract Soc’y v. Vill. of Stanton, 

536 U.S. 150, 164–65 (2002); Schaumburg v. 

Citizens for Better Env’t, 444 U.S. 620, 637 (1980) 

(protecting the public from fraud, crime, and undue 

annoyance are indeed substantial interests); Nat’l 

Fed. of the Blind v. FTC, 420 F.3d 331 (4th Cir.), 

cert. denied, 547 U.S. 1128 (2006) (prevention of 

fraud and the protection of privacy in the home are 

sufficiently substantial governmental interests to 

justify a narrowly tailored regulation). 

362 487 U.S. 781 (1988). 

363 444 U.S. 620, 637 (1980). 

364 68 FR 4636 (Jan. 30, 2003). 

365 The Commission notes that, in a slightly 

different context, non-profit organizations 

uniformly condemned a proposal in the NPRM for 

the Amended TSR that they would be able to obtain 

consent to place charitable solicitation calls to 

persons who had placed their phone numbers on 

the National Do Not Call Registry and thereby 

preserve their right to call those persons. Non-profit 

organizations asserted that it would be too costly for 

them to obtain prospective donors’ express 

permission to call, and too difficult for consumers 

to exercise their right to hear from them. 68 FR 4636 

(Jan. 30, 2003). 

366 E.g., Bashinksy, No. 123, at 1; Harlach, No. 

000; Popat, No. 120, at 1; but see Maddock, No. 137, 

at 1–2. 

367 Cold calls prospecting for new donors are also 

far less likely to induce financial support than calls 

to prior donors and members. See 68 FR at 4634 

(citing comments contending that ‘‘it is axiomatic 

that persons who have already contributed to a 

nonprofit or charitable organization are much more 

likely to contribute than are persons who have 

never done so’’). 

368 Nat’l Fed. of the Blind v. FTC, 420 F.3d 331 

(4th Cir.), cert. denied, 547 U.S. 1128 (2006). 

369 397 U.S. 728 (1970). 

As in the case of commercial speech, 

the analysis applicable to charitable 

solicitations also inquires into the 

nature of the governmental interest that 

the regulation seeks to advance. The 

case law indicates that with respect to 

the higher level of scrutiny applicable to 

charitable solicitations, privacy 

protection is a sufficiently strong 

governmental interest to support a 

regulation that touches on protected 

speech.361 However, the case law also 

indicates that, in the case of charitable 

solicitation, greater care must be taken 

to ensure that the governmental interest 

is actually advanced by the regulatory 

remedy, and that the regulation is 

tailored narrowly so as to minimize its 

impact on First Amendment rights. In 

Riley v. Nat’l Fed. of the Blind,362 and 

Schaumburg v. Citizens for Better 

Env’t,363 the Court rigorously examined 

laws that regulated the percentage of 

charitable contributions raised by a 

professional fundraiser that could be 

retained as the fundraiser’s fee. The 

Court struck down the laws because 

there was, in the Court’s view, at best an 

extremely tenuous correlation between 

charity fraud and the percentage of 

funds paid as a professional fundraiser’s 

fee; the laws therefore were unlikely to 

achieve their intended purposes of 

preventing fraud and protecting 

charities. The Court also found that 

these laws were not drawn narrowly 

enough to minimize the impact on the 

charities’ First Amendment rights. 

In contrast, a close nexus exists 

between the government’s legitimate 

interest in protecting consumers’

privacy from unwanted prerecorded 

telemarketing calls from telefunders and 

the requirement that such calls give call 

recipients an opportunity to opt out. 

This nexus does not rely on an 

attenuated theoretical connection 

between fraud and the percentage of 

funds raised that a telefunder may take 

as its fee. Rather, there is a direct 

correlation between the governmental 

interest and the regulatory means 

employed to advance that interest: The 

consumer indicates his or her 

preference not to receive such a call 

again, and the regulation requires the 

telefunder to record and honor that 

request in the future. 

As noted in the SBP for the Amended 

TSR, the Commission approaches with 

extreme care the issue of tailoring the 

TSR privacy provisions narrowly to 

advance the Commission’s legitimate 

governmental interest, yet minimize the 

impact on the First Amendment rights 

of charitable organizations and the forprofit telemarketers who solicit on their 

behalf.364 The Commission is concerned 

that subjecting charitable solicitation 

telemarketing to the same prior written 

agreement requirement that applies to 

commercial telemarketing for the 

purpose of soliciting sales of goods and 

services may sweep too broadly, and 

inadvertently act as an impermissible 

prior restraint, given the difficulties 

charitable organizations say they have 

in securing donors’ agreements to 

receive charitable solicitation calls.365

After careful consideration, the 

Commission has determined that the 

best approach to achieve a narrow 

tailoring of the prerecorded message 

amendment is to exempt solicitations by 

telefunders to induce charitable 

contributions via outbound telephone 

calls from the prior written agreement 

requirement of the amendment, and 

instead require only that such calls, like 

charitable solicitation calls that are 

placed by live representatives, enable 

the recipients of the calls to opt out of 

receiving such calls in the future, if they 

so desire. 

Limiting telefunders’ use of 

prerecorded messages to those calls 

placed to members of, or previous 

donors to, the non-profit organization 

on whose behalf the calls are placed 

serves two important purposes. First, it 

will prevent a likely tide of low-cost 

charitable solicitation calls to potential 

donors made by telefunders on behalf of 

a virtually infinite array of non-profit 

organizations seeking to boost 

donations. There are consumer 

complaints about charitable solicitations 

in the record,366 and the record 

suggests—and common sense 

confirms—that the abuse of consumer 

privacy intensifies as the number and 

frequency of telemarketing calls, 

including prerecorded calls, increases. 

Second, there is evidence in the record 

that the abuse of consumer privacy is 

greatly compounded by prerecorded 

calls from entities with which 

consumers have no prior relationship. 

Permitting telefunders to make 

impersonal prerecorded cold calls on 

behalf of charities that have no prior 

relationship with the call recipients, 

therefore, would defeat the 

amendment’s purpose of protecting 

consumers’ privacy.367 Thus, permitting 

the use of prerecorded messages to calls 

made by telefunders to members of, or 

previous donors to, a charitable 

organization is a limiting principle that 

makes good practical and policy sense. 

This is an alternative supported by the 

two industry commenters who 

addressed the issue of an exemption for 

charitable solicitation calls. 

The Commission notes that the 

provision requiring for-profit 

telefunders to honor entity-specific Do 

Not Call requests, which this 

amendment implements for prerecorded 

calls, has been challenged and 

upheld.368 It is instructive to note that, 

in analyzing whether this provision is 

tailored narrowly enough to pass First 

Amendment scrutiny, the Fourth Circuit 

compared the TSR’s regulatory scheme 

to a federal statute challenged in Rowan 

v. U.S. Post Office Dep’t.369 That statute 

empowered a homeowner to bar 

mailings from specific senders by 

notifying the Postmaster General that 

she wished to receive no further 

mailings from that sender. The Fourth 

Circuit stated: 

The parallels between the law at issue in 

Rowan and the do-not-call list in this case 

are unmistakable. If consumers are 

constitutionally permitted to opt out of 

receiving mail which can be discarded or 

ignored, then surely they are permitted to 

opt out of receiving phone calls that are 

more likely to disturb their peace. In this 

way, a do-not-call list is more narrowly 

tailored to protecting privacy than was the 

law in Rowan. 


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370 Nat’l Fed. of the Blind v. FTC, 420 F.3d at 342. 

371 With respect to the underinclusiveness 

objections raised by both DMA and Heritage to the 

effect that the amendment’s coverage only of forprofit telefunding, but not telephonic fundraising 

conducted in-house by non-profit organizations, the 

Commission notes that the Fourth Circuit, in Nat’l 

Fed. of the Blind, held that: 

When an agency regulates to the extent of its 

jurisdiction it will unavoidably leave out some 

speakers and some speech that is beyond its 

authority to regulate. But, in such circumstances, 

the danger of governmental overreaching—which 

cases such as Discovery Network aim to prevent—

is removed. Unlike in those cases, here it does not 

make sense to see this unavoidable distinction as 

a red flag indicating First Amendment problems. 

Any underinclusiveness that appellants have 

identified is not the result of the FTC attempting to 

favor one side of a public debate over another, or 

pursuing an illegitimate governmental interest, or 

not genuinely serving the interest it purports to 

seek. Rather, such underinclusiveness results from 

the simple fact that the PATRIOT Act designated 

‘‘charitable solicitations’’ as being within the type 

of behavior the FTC could regulate, but it left 

speech by charities outside the agency’s 

jurisdiction. 

The agency’s jurisdictional boundary, therefore, 

serves as the ‘neutral justification’ for the 

distinction that was missing in Discovery Network. 

While plaintiffs complain that the regulation also 

fails to cover some commercial, political, and 

intrastate speech, this fact too is explained by the 

FTC’s assiduous attention to its own jurisdiction. 

420 F.3d at 348 (citations omitted). 

372 16 CFR 310.4(b)(4)(i) (emphasis added). 

373 71 FR at 58734 (emphasis added). 

374 71 FR at 58730. 

375 47 CFR 64.1200(a)(6) (Prohibiting 

abandonment ‘‘of all telemarketing calls that are 

answered live by a person, measured over a 30 day 

period’’). 

376 Six of the comments refer to calls that are 

‘‘auto-dialed,’’ ‘‘auto call,’’ ‘‘computer generated,’’or 

‘‘machine calls,’’ Eng, No. 277; Schell, No. 430; 

Herman, No. 305; Reeves, No. 355; Block, No. 226; 

Anderson, No. 395; and two cite ‘‘automatic 

dialers’’ or ‘‘automated systems.’’ Griffiths, No. 319; 

Warsaw, No. 388. One objects to ‘‘any expansion in 

the rights of telemarketers to call my phone 

numbers,’’ Bergman, No. 302, and another considers 

‘‘the proposed amendments to be vital’’ but does 

not ‘‘wish to be disturbed.’’ Murphy, No. 332. 

377 E.g., Chastain, No. 518; Hamilton, No. 219; 

Ryan, No. 645; Woods, No. 328; ; but see Parlante, 

No. 216 (would prefer only ‘‘1% per day’’). 

378 Bashinski, No. 123, at 1; Byrne, No. 158, at 

2; Popat, No. 120, at 3; McDaniel, No. 557; cf. 

Dunlop, No. 118, at 3 (‘‘The rule should be 

amended to allow a four or five percent dropped 

call rate ‘per day’ instead of three percent ‘per 30 

days’’’). 

379 E.g., Bernardy, No. 307 (‘‘[T]here is NOTHING 

more annoying than running to the phone and 

finding dead air !!! I detest these calls’’) (emphasis 

in original); Sanders (It is ‘‘very annoying’’ when 

Continued 

Moreover, this particular restriction 

seems even more reasonable given the fact 

that the FTC has only subjected telefunders 

to a charity specific list. Under this 

procedure, a consumer cannot report to a 

central authority that he wishes not to be 

called by any telemarketers generally; he 

must instead repeat his request as to each 

caller individually. This charity-specific 

alternative to a national list is an option 

that the Mainstream Marketing court called 

‘‘extremely burdensome to consumers.’’

358 F.3d at 1244. In light of this, we have 

no trouble finding the charity-specific 

restriction on speech to be a permissibly 

narrow means of protecting the home 

environment.370

The purpose and effect of this 

exemption is to allow for-profit 

telefunders to make use of prerecorded 

messages while maintaining the Rule’s 

privacy protections for consumers. The 

amendment ensures the same privacy 

protection for recipients of prerecorded 

message calls soliciting a charitable 

contribution that the Rule currently 

affords recipients of calls from live 

representatives soliciting a charitable 

contribution.371 To paraphrase the 

Fourth Circuit, if consumers are 

constitutionally permitted to opt out of 

receiving phone calls from live 

telefunding representatives, then surely 

they are permitted to opt out of 

receiving calls that are more likely to 

disturb their peace because they deliver 

no live human voice, but only a 

prerecorded message. 

Accordingly, the Commission has 

modified the prerecorded call 

amendment to make it clear that only 

the opt-out requirements in 16 CFR 

310.4(b)(1)(v)(B) apply to prerecorded 

calls ‘‘to induce a charitable 

contribution from a member of, or 

previous donor to, a non-profit 

charitable organization on whose behalf 

the call is made.’’

III. Proposed Abandoned Call 

Measurement Standard Revision 

The second proposed amendment 

would revise the TSR’s standard for 

measuring the permissible call 

abandonment rate. Section 310.4(b)(4)(i) 

of the TSR now requires that a seller or 

telemarketer employ ‘‘technology that 

ensures abandonment of no more than 

three (3) percent of all calls answered by 

a person, measured per day per calling 

campaign.’’372 The proposed 

amendment would revise the standard 

to permit sellers and telemarketers to 

measure the abandonment rate ‘‘over the 

duration of a single calling campaign, if 

less than 30 days, or separately over 

each successive 30-day period or 

portion thereof that the campaign 

continues.’’373

The Commission proposed the 

revision because the ‘‘record shows that 

particular problems arise in connection 

with the use of smaller, segmented lists 

that are the most economical for small 

businesses and the most useful in 

targeting only those consumers most 

likely to be interested in a particular 

sales offer.’’374 This occurs because the 

predictive dialers used to place live 

telemarketing calls use statistical 

projections, based on continuous 

sampling of the number of calls that are 

answered in person, to determine the 

rate at which to place calls for the sales 

representatives that are available to take 

them. As with all such statistical 

models, small samples produce large 

standard deviations, a fact which 

manifests itself, in the case of predictive 

dialers, in decreased accuracy for 

smaller calling lists and unexpected 

spikes in call abandonment rates. 

Consequently, the current ‘‘per day per 

calling campaign’’ call abandonment 

standard effectively precludes the use of 

predictive dialers with smaller calling 

lists because of the likelihood that call 

abandonments will exceed the three 

percent daily maximum permitted. 

Some 144 consumers, 9 consumer 

advocates, and 12 industry members 

and trade associations commented on 

the proposed amendment. All of the 

consumer advocacy comments and 

nearly all of the individual consumer 

comments oppose any change that 

might increase the number of 

abandoned calls consumers receive, 

with many consumers insisting that all 

abandoned calls are ‘‘abusive’’ and 

should be prohibited. The industry 

comments generally applaud the 

proposed amendment, but most argue 

that its ‘‘per campaign’’ limitation still 

makes it unduly restrictive compared to 

the FCC standard, which permits 

telemarketers to compute a single 

abandonment rate for all the campaigns 

they conduct during a 30-day period.375

A. Consumer Comments 

All of the comments from consumer 

advocates oppose the proposed 

amendment, as do nearly all of the 

individual consumers who refer to it, 

most of whom specifically object to 

‘‘abandoned’’ or ‘‘dead air’’ calls.376

Twelve consumer comments ask in 

particular that the present ‘‘3 percent 

per day’’ standard be retained,377 while 

only four clearly voice any support for 

the proposed amendment.378

The consumer advocates and 

individual consumers make five basic 

arguments against the proposed 

amendment: (1) Abandoned calls are 

harassing and an invasion of privacy; (2) 

Abandoned calls should be banned to 

protect consumers; (3) Any change in 

the current standard will further harm 

consumers; (4) The record does not 

support any change in the current 

standard; and (5) The ‘‘per campaign’’

standard should be retained. 

1. Abandoned Calls are Harassing and 

an Invasion of Privacy 

More than 35 consumers say 

abandoned calls are ‘‘annoying.’’379


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‘‘[y]ou rush to the phone and it’s a recording or no 

one is there’’); Steep, No. 422 (‘‘‘Dead air’ calls’’ are 

‘‘particularly’’ annoying); see also, e.g., Anderson, 

No. 354; Brown, No. 350; Donohue, No. 300; Kelm, 

No. 271; Paradise, No. 241; No. 415; Redwine, No. 

324. 

380 Adams, No. 169 (‘‘I cannot tell you how 

frustrating it is to pick up the phone after it has rang 

two times only to hear a ‘click’ on the other end’’); 

Fulleylove-Krause, No. 423. 

381 Churchwell, No.381(‘‘Nothing is more 

irritating than to pick up the phone and no one is 

on the other end’’); Roberson, No. 264 (I ‘‘want to 

be protected from . . . those automatic calls that have 

no message, just silence. Those are just as irritating 

and unwanted’’); Shell, No. 430; cf. Lindo, No. 310 

(‘‘I despise the ‘dead’ telephone line that results 

from call abandonment’’); Saloiye, No. 554(‘‘[V]ery 

aggravated by calls’’ where ‘‘no one is on the line’’). 

382 Griffith, No. 524 (‘‘Abandoned calls are a great 

nuisance and should be strictly prohibited’’); 

Gwinn, No. 553 (‘‘Abandoned calls are a major 

nuisance’’); Lilly, No. 522; cf. Haddox, No. 549 (‘‘I 

find it such a waste of my time—especially when 

no one is on the end of the line’’). 

383 Aston, No. 551 (‘‘Rushing to answer the phone 

only to find nobody there constitutes an 

unacceptable interruption as well as a waste of the 

victim’s valuable time’’); Gwinn, No. 553 (‘‘I quit 

what I am doing—go to the phone—and silence! I 

see no justification for that annoying business 

practice’’); Sawyer, No. 517 (‘‘This allowance [for 

call abandonment] simply enables telemarketers to 

do the damage of interrupting what I am doing’’). 

384 Flanagan, No. 347 (‘‘As a farm family dead air 

time is a real problem when working outside. You 

dash in the barn thinking it is the tractor dealer and 

you get this dead air phone call’’); Schmidt, No. 450 

(‘‘I want this to stop, as many times I am busy 

outside, and must run in to a dead phone’’). 

385 Fielding, No. 267 (‘‘The ‘do not call’ concept 

becomes a joke when companies are allowed to call 

and make you get up from your reading chair to 

answer a non-existent phone call’’); Hall, No. 618 

(‘‘I don’t want to get out of my chair every 10 

minutes to answer’’ telemarketers’ ‘‘dead silence 

computer calls’’). 

386 Adams, No. 321 (‘‘I race to answer the phone 

and there’s no one there. It undoubtedly happens 

when I am preparing a meal, or when I have just 

sat down to enjoy it’’); Hooper, No. 331 

(‘‘Abandoned calls are especially annoying when I 

get up from a meal or run from another task to 

answer the phone and there is no one there’’). 

387 Casabona, No. 559 (‘‘The use of equipment to 

dial more numbers than the telemarketers can 

possibly answer amounts to harassment. This 

practice is worse than a prankster ringing your line 

constantly and then hanging up when you 

answer’’); Steans, No. 351 (‘‘It’s like being harassed 

in your own home.’’) Citizen, No. 396 ( I consider 

them [abandoned calls] a form of harassment, and 

you should too’’); Burr, No. 211; Leuba, No. 466; see 

Harlach, No. 000 (‘‘Telemarketers ‘‘hang up leaving 

no message at all, only to call again the same day; 

sometimes within the same hour’’). 

388 Swafford, No. 521 (using Caller ID); Wagner, 

No. 353 (using an answering machine). 

389 PRC at 4; see also, e.g., Budnitz, No. 282; 

Hockaday, No. 255; Miller, No. 528. 

390 PRC at 4; see also, e.g., Chester, No. 208; 

McCleery, No. 218; Parlante, No. 216; Snell, No. 

210. 

391 NCL at 6; see also, Calderon, No. 301; Citizen, 

No. 396; Smallwood, No. 303; cf. Proctor, No. 403 

(‘‘I also support tightening of the method for 

measuring the maximum allowable abandonment 

rate’’); Young, No. 330 (‘‘Please STRENGTHEN 

rather than weaken any regulations about . . . 

methods for measuring the maximum allowable call 

abandonment rate’’) (emphasis in original); 

Casabona, No. 559 (‘‘Computer dialing of numbers 

for telemarketers who cannot possibly attend to 

them should be banned’’); Warsaw, No. 388 (‘‘I 

would like these systems banned and be considered 

wire fraud upon the public’’). 

392 PRC at 4 (Contending that ‘‘[w]ithout the 

FTC’s ability to conduct compliance audits and 

without consumers’ ability to complain, the only 

enforcement mechanism is a telemarketer’s 

requirement to keep records of abandoned call 

rates,’’ and that measures to ensure more effective 

enforcement should be pursued, ‘‘either through 

rulemaking or, if appropriate, seeking an 

amendment to the law itself’’). 

393 Cooper, No. 285; accord, Palicki, No. 260 

(Police detective attesting that when consumers 

attempt to obtain the numbers from which 

abandoned calls are placed, they ‘‘show out of 

area’’); Strang, No. 189, at 4–5 (citing calls to ‘‘my 

residential phone line’’ where ‘‘the majority of the 

‘hangup’ calls’’ provided ‘‘no Caller ID information 

as required by FCC rules’’); Kostenko, No. 417; 

Sawyer, No. 517; Warsaw, No. 388. 

394 NCL at 6; see Gorman, No. 387 (‘‘Now they 

want to increase the Abandon Rate of their calls? 

They should not be calling us anyway unless they 

are going to pay for our phone service’’). 

395 Id. at 7. 

396 AARP at 7; Anderson, No. 354 (‘‘I work with 

seniors and it makes them feel very 

uncomfortable’’); Baker, No. 201 (‘‘Frequent 

afternoon and evening dead-air calls are a worry 

when you are alone as I am’’); Hardesty, No. 543 

(‘‘I receive at least seven abandoned calls daily at 

my home. Not only is this a concern for me, but 

it is a worry for my elderly mother’’); Leuba, No. 

466 (‘‘At least I hope they were robo calls, there is 

a possibility that they were predators, looking for 

a woman at home’’); Matulis, No. 410 (‘‘Too many 

seniors become alarmed when they receive dead air 

calls’’); May, No. 333; cf. Johnson, No. 532 

(Abandoned calls leave me ‘‘wondering if a family 

member is in trouble’’). 

397 PRC at 4. 

398 Palicki, No. 260. 

399 PRC at 4. 

Others find them ‘‘frustrating,’’380

‘‘irritating,’’381 and a ‘‘nuisance.’’382 Ten 

cite the inconvenience of being 

interrupted in what they are doing for 

no reason,383 be it working outside,384

sitting in a comfortable chair to read or 

relax,385 or preparing or eating a 

meal.386 Several consumers say they 

consider the repeated interruptions of 

their home life by abandoned calls a 

form of harassment.387 While two 

consumers say they have learned to 

cope with abandoned calls by screening 

calls before they answer them,388

several say, like PRC, that they consider 

abandoned calls an invasion or violation 

of their right to privacy in their 

home.389

2. Abandoned Calls Should Be Banned 

To Protect Consumers 

One consumer advocacy group and at 

least 14 individual consumers assert 

that ‘‘the only acceptable rate for 

abandoned or dead-air calls is a zero 

tolerance.’’390 Similarly, NCL’s joint 

comment for itself and six other 

consumer advocacy groups, as well as 

several comments from individual 

consumers, contend that the only 

‘‘acceptable level for abandoned calls is 

zero.’’391 PRC argues that abandoned 

calls should be banned completely 

because ‘‘any tolerance for ‘dead-air’

calls denies consumers the opportunity 

to complain about abusive calls’’ for the 

simple reason that ‘‘[e]ven when the 

consumer’s phone has Caller ID, the 

display usually shows only ‘private 

caller’ or ‘out of area.’’’392 Six consumer 

comments confirm that they have no 

way to identify the source of the 

abandoned calls they receive, and 

therefore ‘‘no way of knowing what 

company to call to have the calls 

stop.’’393

NCL adds two additional 

justifications for a total ban. The first is 

that, ‘‘[u]nlike airlines, which are 

permitted to overbook but must then 

compensate consumers for being 

bumped, consumers receive no 

compensation for being subjected to 

abandoned calls.’’394 NCL’s second 

rationale is that abandoned calls cause 

‘‘anger and fear among a certain 

percentage of consumers for the sake of 

commercial efficiency,’’ and ‘‘this is not 

a fair trade-off.’’395

3. Any Change in the Current Standard 

Will Further Harm Consumers 

Both AARP and PRC stress the fear 

abandoned calls create for consumers as 

a ground for their opposition to the 

proposed amendment. AARP and 

several consumer comments point out 

that ‘‘[f]or mid-life and older Americans 

these calls are more than just a 

nuisance,’’ because ‘‘[i]n addition to the 

inconvenience and risk associated with 

rushing to answer the telephone, there 

is the uncertainty and concern for the 

consumer, especially for women living 

alone.’’396 PRC adds that receiving an 

abandoned call ‘‘needlessly increases 

anxiety for stalking victims’’ and for 

‘‘[c]onsumers whose homes have been 

burglarized or who live in a 

neighborhood where home burglaries 

have occurred.’’397 A comment from a 

police detective attests that ‘‘[o]ur 

residents who get numerous hang-ups 

(dead air calls) make police reports 

thinking these are from a ‘specific’

person who is harassing them,’’ and that 

‘‘these calls create additional work for 

law enforcement throughout the country 

as well as create a harmful atmosphere 

for the receiving person.’’398

PRC also asserts that the proposed 

amendment ‘‘does nothing to promote 

consumer interests.’’399 The Connecticut 

Attorney General agrees, opposing the 

proposed amendment both because 

abandoned calls ‘‘represent a substantial 

intrusion into consumers’ lives’’ and 

because ‘‘the telemarketing industry’s 

comments acknowledge that it can 


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400 CTAG at 3. 401 NCL at 7. 402 Id. at 6–7. 403 Hui, No. 119, at 2 404 Dunlop, No. 118, at 2, 3. 405 Byrne, No. 158, at 2. 406 PRC at 4. 407 Platt, No. 11, at 1, 2. 

408 Id. at 1–2. 

409 Strang, No. 189, at 5–6. 

410 Id. 

411 AARP at 7–8. 

412 Id. (Noting that ‘‘[p]revious AARP comments 

have recommended that abandoned calls include 

some identifying information: calls using predictive 

dialers should provide a taped message in lieu of 

hanging up’’). In fact, section 310.4(b)(4)(iii) of the 

TSR’s call abandonment safe harbor includes such 

a requirement. 16 CFR 310.4(b)(4)(iii). 

413 See Section III.B.2 infra. 

414 CTAG at 3 (emphasis in original). 

415 Id. at 4. 

416 Popat, No. 120, at 3 (‘‘[A]veraging the 

campaigns within a period will lead to an increase 

in discriminatory abandonment’’); Bashinski, No. 

123, at 2 (Averaging across all of a telemarketer’s 

campaigns ‘‘would also allow some campaigns to 

have a much higher rate of call abandonment’’); 

Hui, No. 119, at 2 (‘‘Averaging out across campaigns 

comes at the expense of at least one group of 

consumers’’); Wang, No. 126, at 3 (‘‘It should not 

cover all campaigns because this would allow 

discriminatory treatment of campaigns’’). 

417 DMA at 2, 10; ATA at 2; NAA at 4; Verizon 

at 6; Heritage, No. 80, at 1; Countrywide at 1; 

Verizon at 2, 6; ccc Interactive at 1; but see BoA 

at 1 (Noting, with approval, ‘‘the Commission’s 

willingness to take an approach similar to that 

taken by’’ the FCC, but not endorsing the proposed 

amendment); TCIM, at 1 (Recommending only that 

the FTC adopt the FCC’s standard for measuring 

call abandonment). 

418 Countrywide at 3 (‘‘Countrywide urges the 

Commission to make this proposed rule change 

final without any additional amendment’’); ccc 

Interactive at 1. 

419 ATA at 5–7; NAA at 12; Verizon at 3–4; 

Heritage at 3. 

configure dialers to comply with the 

current standards.’’400 NCL also sees no 

reason to relax the per-day standard 

because it ‘‘forces telemarketers to 

monitor and adjust their use of 

predictive dialing closely,’’ and ‘‘[if] it 

requires them to switch to manual 

dialing at times, we think that is a good 

thing, because manual dialing does not 

result in abandoned calls.’’401 Moreover, 

NCL doubts that any change would be 

a change for the better. NCL observes 

that ‘‘[i]f changing the standard . . . 

would actually reduce the number of 

consumers who receive [abandoned 

calls], and telemarketers can ensure that 

certain groups of consumers are not 

disproportionately subjected to such 

calls, it might be an improvement over 

the current situation,’’ but notes that it 

is ‘‘not confident, however, that that 

will be the result.’’402

The few consumers willing to 

contemplate anything but a complete 

ban on abandoned calls also argue that 

the ‘per day’ standard should be 

retained because it ‘‘limits the numbers 

of abandoned calls that consumers 

receive’’ compared to the proposed 

amendment.403 One argues that the 30- 

day standard of the proposed 

amendment ‘‘will inevitably harm 

consumers’’ and ‘‘benefits firms at the 

expense of consumers.’’404 Another 

believes that the proposed ‘‘30-day 

standard . . . makes it too easy for an 

irresponsible marketer to violate the 

laws with impunity for a whole 

month.’’405

4. The Record Does Not Support Any 

Change in the Current Standard 

PRC further contends that the 

industry ‘‘has shown no good reason 

why this [proposed amendment] should 

be granted or that consumers have 

anything to gain by changing the 

calculation.’’406 A consumer comment 

more specifically argues that the 

‘‘industry has not demonstrated a clear 

and convincing need’’ for the change, 

noting that while the industry’s 

arguments ‘‘are certainly plausible . . . 

little empirical evidence is offered to 

support them.’’407 This comment 

expresses particular doubt about the 

industry argument that a 30-day 

standard is necessary to permit the use 

of small, segmented lists that are most 

likely to ensure that telemarketing offers 

are made to the consumers who are 

most likely to be interested in them. 

‘‘Given the consumer response to the 

prior NPRM,’’ the comment observes, ‘‘it 

seems safe to say that very few 

telemarketing offers reach interested 

consumers.’’408

A second industry rationale, that 

there is ‘‘no evidence that telemarketers 

will abuse a 30-day standard,’’ is 

challenged by another consumer 

comment as ‘‘a nice sound bite’’ but one 

that ‘‘may be lacking in candor.’’409 The 

comment argues that ‘‘[t]he 

telemarketing industry is known for 

bending, and for flat out ignoring, 

telemarketing rules,’’ and that because 

‘‘no one has ever studied the problem 

. . . there is also no evidence to suggest 

the industry will not abuse a 30-day 

standard.’’410

Finally, AARP finds fault with the 

industry ‘‘argument that consumers can 

address their concerns [about 

abandoned calls] by using Caller ID to 

identify the names of telemarketers 

abandoning calls to their telephone 

numbers.’’411 AARP argues that ‘‘[t]his 

suggested solution incorrectly places the 

burden and expense on the consumer to 

remedy this practice,’’ and contends 

that ‘‘consumers who cannot afford the 

extra cost of a Caller ID service . . . will 

be unable to check on the identity of an 

incoming call.’’412

5. The ‘‘Per Campaign’’ Standard 

Should be Retained 

In anticipation of industry arguments 

to the contrary,413 the Connecticut 

Attorney General affirms the importance 

of the requirement in the amendment, as 

proposed, that the abandonment ‘‘rate 

be measured during each campaign to 

reduce potential discriminatory 

treatment of disfavored groups.’’ He 

argues that ‘‘[a] thirty-day (30) standard, 

including any and all campaigns, would 

make less valued consumers the target 

of a disproportionate share of 

abandoned calls.’’414 The Attorney 

General notes that without this 

‘‘safeguard, consumers can only rely on 

the good faith of the industry that it will 

not engage in such practices, which 

directly conflicts with its financial 

incentive to do otherwise.’’415 Several 

consumer comments concur in this 

view.416

B. Industry Comments 

Ten telemarketers, trade associations 

and businesses that use live 

telemarketing calls submitted comments 

on the proposed amendment to the 

current ‘‘per day per calling campaign’’

standard for measuring call 

abandonment. The industry comments 

are generally supportive of the proposed 

amendment, but most argue that it does 

not go far enough, and should eliminate 

the ‘‘per campaign’’ limitation. The 

comments provide information intended 

to show that: (1) The current ‘‘per day’’

standard inhibits small, targeted 

campaigns; (2) The continued ‘‘per 

campaign’’ limitation creates 

compliance issues; and (3) 

Discriminatory call abandonments need 

not be a concern. 

1. The Current ‘‘Per Day’’ Standard 

Inhibits Small, Targeted Campaigns 

All but two of the industry comments 

support the proposed amendment 

because it will reduce the costs and 

enhance the efficiency of live 

telemarketing.417 Two of the comments 

urge the Commission to adopt the 

proposed amendment in its present 

form,418 while the remainder argue that 

the proposed amendment’s ‘‘per 

campaign’’ limitation is unnecessary. 

Several of the comments take pains to 

point out how the current ‘‘per day’’

standard for measuring call 

abandonment rates adversely affects the 

efficiency of the predictive dialers used 

in live telemarketing.419 The comments 

acknowledge that the Commission is 

correct in its understanding that the 

biggest problem arises from ‘‘the 

limitations of predictive dialers in 

adjusting to unexpected spikes in 


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51198 Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 

420 DMA at 9, citing 71 FR 58730. 

421 Verizon at 3; see Heritage at 3 (The proposed 

amendment ‘‘would remove the necessity of 

managing the abandonment rate by the hour, which 

is essentially what the per-day rule requires us to 

do’’). 

422 Id. at 3, 4; see NAA at 12 (‘‘When calling a 

small list, the balance between the algorithm used 

by the dialer and the number of sales 

representatives available at any particular time (due 

to length of previous call, bathroom breaks, etc.) is 

easily upset’’). 

423 NAA at 12. 

424 Verizon at 3. 

425 Id. at 4. 

426 Id. at 4; see Heritage at 2. 

427 Id. at 5 (emphasis in original). 

428 ATA at 5. 

429 Id. 

430 Id. at 7 n.11. 

431 Id. at 7. 

432 Id. Although ATA’s comment does not specify 

why this is so, the most likely explanation appears 

to be that small telemarketers will be able to reduce 

their staffing requirements at the outset of new 

calling campaigns, since they will be able to average 

the abandonment rate over a 30-day period. 

433 DMA at 9–10; ATA at 4–5; NAA at 12–13; 

Verizon at 5; BoA at 2–3; 

434 DMA at 10. While it is not entirely clear from 

the comment, DMA appears to be arguing that it is 

not economical to use more than one predictive 

dialer for a number of small, targeted campaigns, 

not that the costs of additional equipment, time and 

labor needed to ensure that ‘‘systems track all 

calling campaigns individually’’ make the per 

campaign requirement unduly burdensome, as 

another comment argues. Heritage at 1–2. 

435 Id.; see NAA at 13 (‘‘Measuring call 

abandonment over the duration of the campaign 

instead of over a 30-day period provides little relief 

when applied to small, tailored campaigns typical 

of small business sellers and telemarketers’’). 

436 BoA at 2. 

437 ATA at 4–5; NAA at 13; BoA at 2. 

438 ATA at 4–5. 

439 BoA at 2–3. 

average call abandonment rates.’’420

They confirm that ‘‘if the call 

abandonment rate is calculated daily, 

the telemarketer may not have a 

sufficient amount of time to recover . . ., 

particularly if one of those spikes occurs 

near the end of the day.421

As two comments note, ‘‘[t]his effect 

is exacerbated in the case of targeted 

telemarketing campaigns directed to 

small groups of consumers’’ because 

‘‘[b]asic principles of statistics indicate 

that when the group of consumers to be 

called is smaller, the deviation from 

expected answer rates—and expected 

abandonment rates—is greater.’’422 This 

adversely affects small businesses such 

as ‘‘smaller community newspapers’’

that are ‘‘hampered the most because 

their telemarketing universe is small 

(calling lists less than 5000).’’423 It also 

impacts larger companies that ‘‘use 

market research and data research . . . to 

focus individual telemarketing 

campaigns on those consumers most 

likely to be interested.’’424 Such 

‘‘segmented’’ or ‘‘targeted’’ marketing 

‘‘means that consumers are most likely 

to receive those offers that are relevant 

to them, and less likely to receive 

telemarketing calls . . . that are not,’’ and 

allows businesses ‘‘to focus on smaller 

groups of consumers, which lowers 

marketing costs,’’ permitting the cost 

savings to be ‘‘passed on to consumers 

in the form of lower prices.’’425

To ensure compliance with the per 

day standard, companies conducting 

such small or targeted campaigns ‘‘may 

abandon predictive dialers altogether, 

relying instead on more expensive 

manual dialing,’’ or ‘‘program the dialer 

with a substantially lower abandonment 

rate [than 3 percent],’’ thereby ‘‘slowing 

the rate of outgoing calls’’ and 

increasing costs by ‘‘increasing 

operators’ down-time between calls.’’426

These inefficiencies may lead 

companies to expand their campaigns to 

larger groups of consumers to minimize 

the effect of variations in the 

abandonment rate, with the result that 

‘‘consumers receive more, rather than 

fewer, telephone solicitations in which 

they have no interest.’’427

One comment also highlights a 

second effect of the per day standard: 

that call centers require more 

telemarketers at the beginning of a 

calling campaign than toward the end 

because they ‘‘see a dramatic decrease 

in contact rates as campaigns continue 

over time.’’428 This means either that 

‘‘management is forced to overstaff on a 

daily basis,’’ or to adjust by ‘‘decreasing 

staffing to accommodate smaller calling 

files later in programs.’’429 The problem 

with the latter approach is that new 

personnel must be hired and trained at 

no little cost because of turnover caused 

by the lack of a steady income. Thus, 

either strategy required by the per day 

standard increases costs that ultimately 

may be passed on to consumers. 

The comment points out that small 

business telemarketers are particularly 

disadvantaged by the high staffing costs 

they incur under the ‘‘per day’’

standard, and that ‘‘many’’ of them ‘‘do 

not utilize predictive dialers’’ for that 

reason.430 Unlike large telemarketers 

that operate several campaigns from a 

single call center, who can move agents 

from one calling campaign to another, 

small telemarketers who run ‘‘relatively 

few programs and who initiate relatively 

few telemarketing calls do not have this 

luxury.’’431 The comment contends that 

the ‘‘economic reality for relatively 

small telemarketers will vastly 

improve’’ if the proposed amendment is 

adopted because they will no longer be 

burdened by ‘‘significantly higher costs, 

either in wages or attrition rates.’’432

2. The Continued ‘‘Per Campaign’’

Limitation Creates Compliance Issues 

Many of the industry comments urge 

the Commission to revise the proposed 

amendment to eliminate the ‘‘per 

campaign’’ limitation retained from the 

current standard, and permit call 

abandonment rates to be averaged across 

multiple campaigns.433 The industry 

comments contend that retention of the 

‘‘per campaign’’ limitation will create 

several compliance difficulties. First, 

DMA asserts, without further 

explanation, that ‘‘[f]or small 

campaigns, the efficiencies are achieved 

by allowing one predictive dialer to 

operate on multiple campaigns with a 

combined three-percent rate over 30 

days.’’434

Second, DMA notes that the 

Commission’s effort to reduce the 

obstacles to the use of small, segmented 

calling lists is impeded by the fact that 

‘‘the rule as proposed still requires those 

small and targeted campaigns that last 

less than 30 days be calculated over the 

life of the campaign.’’435 Another 

comment explains ‘‘that the ‘per 

campaign’ limitation will either result 

in marketers continuing to call on a 

particular program to solve for an 

abandonment rate issue, which is 

inefficient and provides little 

appreciable consumer benefit, or 

continuing to use the more restrictive 

‘per day, per campaign’ standard,’’

thereby negating the advantage that 

telemarketing gives a marketer—the 

ability ‘‘to limit its expenses in 

campaigns that are producing lower 

than expected results and [to] move 

resources to more productive programs 

very quickly.’’436

Finally, several comments criticize 

the use of the term, ‘‘campaign,’’ on the 

ground that it leaves sellers and 

telemarketers ‘‘uncertain as to whether 

they are in compliance with the safe 

harbor’’ in the absence of official 

guidance on its meaning.437 One 

comment asserts that ‘‘[i]ndustry 

members often assign different 

meanings to the term based upon the 

underlying purpose of the calls,’’ and 

that the ‘‘regulatory use of such an 

amorphous term has generated 

confusion amongst sellers and 

telemarketers.’’438 One comment 

contends that it is ‘‘this uncertainty’’

that ‘‘is likely to reduce efficiency in the 

use of predictive dialers for many 

businesses.’’439

3. Discriminatory Call Abandonments 

Need Not be a Concern 

Aware of the Commission’s concern 

that eliminating the ‘‘per campaign’’

limitation might allow telemarketers to 


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440 ATA at 8; see DMA at 10; BoA at 2. 

441 BoA at 2; 

442 Id.; see Heritage at 2 (‘‘Put simply, we would 

not want to set an abandonment rate above three 

percent for one ‘‘lower-value’’ group and one below 

three percent for a ‘‘higher value’’ group because all 

of our donor groups are vital to the success of our 

campaigns’’) (emphasis in original). 

443 ATA at 8. 

444 Id. 

445 Id.; see Heritage at 2 (Similarly acknowledging 

that ‘‘it may take ten calls to non-donors to gain one 

pledge of support while calling previous donors 

may result in a pledge in three of every four calls,’’

but asserting that there are ‘‘no donor groups whom 

we deem of more or less value’’). 

446 Id. 

447 DMA at 10 & n.23. 

448 Id. at n.24. 

449 16 CFR 310.4(a)(7). 

450 16 CFR 310.4(b)(4)(iii). Nothing in this 

provision limits its application only to calls placed 

by predictive dialers. It applies with equal force to 

calls placed by automated dialers, which also must 

play a recording if an operator is unavailable when 

a call is answered. 

451 68 FR 4580, 4642 (Jan. 29, 2003). 

452 One purpose of the requirement that 

telemarketers play a recorded message identifying 

the source of an abandoned call is to ensure that 

consumers without Caller ID can still assert a 

company-specific Do Not Call request, without the 

burden of the costs of that service about which 

AARP expresses concern. See note 412, infra, and 

accompanying text. 

target less valued consumers with a 

disproportionate share of abandoned 

calls, several industry comments 

contend that this concern, ‘‘while noble, 

is unfounded.’’440 One comment asserts 

that ‘‘it is questionable whether there 

are ‘less valued’ consumers in 

telemarketing campaigns’’ because 

‘‘[t]elemarketers generally strive to 

target their calls to consumers who are 

most likely to be interested,’’ and 

‘‘[t]here is a substantial economic 

incentive to structure call campaigns in 

this fashion.’’441 The comment 

emphasizes that targeting less valued 

consumers with a disproportionate 

share of call abandonments is unlikely 

for this reason, and emphasizes that it 

doubts ‘‘that marketers operate in this 

manner,’’ and that it ‘‘did not see 

evidence in the record to that effect.’’442

A second comment endeavors to 

explain why discriminatory call 

abandonments are unlikely. It contends 

that sellers and telemarketers ‘‘have no 

motive’’ to abandon calls to any of the 

three categories of consumers they call: 

(1) consumers who have asked for 

information; (2) consumers with whom 

the seller has an EBR; and (3) consumers 

who have no previous relationship with 

the seller.443 The comment asserts that 

sellers and telemarketers would not 

want to risk ‘‘alienating those 

consumers who are most likely to 

purchase’’ by abandoning calls to 

consumers in either of the first two 

categories.444 Concern about calls to 

consumers in the third category ‘‘is 

similarly unfounded,’’ according to the 

comment, because ‘‘the vast majority of 

sellers and telemarketers purchase lists 

of consumers to call’’ that are compiled 

from ‘‘purchasing patterns, credit 

history, family income, demographics, 

etc.’’ that indicate they are also ‘‘most 

like to purchase the offered products or 

services.’’445 There is no incentive, the 

comment argues, ‘‘to abandon calls at 

different rates to different demographics 

within a particular program’’ because it 

would be a ‘‘waste of resources’’ to 

select consumers for a particular 

campaign for any reason other than ‘‘a 

perceived relatively high likelihood of 

purchasing.’’446

Finally, a third comment emphasizes 

that averaging abandonment ‘‘rates from 

a number of small, highly targeted 

campaigns’’ can be done ‘‘without 

resulting harm to consumers’’ because 

‘‘small and targeted campaigns are the 

ones likely to yield results for callers, 

which makes it unlikely that the caller 

would use a high abandonment rate.’’447

The comment adds that ‘‘it is simply not 

mathematically possible to combine a 

relatively low abandonment rate for a 

small campaign with a high 

abandonment rate for a large campaign 

and reach the three percent 

requirement.’’448

C. Discussion and Analysis 

The abandoned and unidentified 

‘‘hang-up’’ calls about which many 

consumers rightly complain are a cause 

for concern, but not necessarily a reason 

to forego adoption of the proposed 

amendment. These ‘‘hang-up’’ calls—

which consumers understandably 

consider a form of harassment and an 

invasion of privacy because they have 

no way to identify the caller to stop 

future calls—violate two distinct 

requirements of the TSR. Section 

310.4(a)(7) of the TSR requires all 

telemarketers to transmit the telephone 

number of the seller or telemarketer 

responsible for the call and, if the 

carrier’s technology permits, the name 

of the seller or telemarketer.449 In 

addition, Section 310.4(b)(4)(iii) 

requires a telemarketer to play a 

recorded message that states the name 

and telephone number of the seller on 

whose behalf the call is placed if no 

salesperson is available within two 

seconds of a consumer’s completed 

greeting upon answering the call.450

The fact that the consumer comments 

suggest there may be too many illinformed or rogue telemarketers who 

routinely violate these two TSR 

requirements provides no basis in 

policy for abandoning a carefully 

considered amendment that would 

benefit businesses that are attempting to 

comply with the law. The well-founded 

consumer complaints in the record 

about abandoned calls instead indicate 

that the Commission may need to 

redouble its industry education and law 

enforcement efforts. The Commission 

does not agree with the consumer 

groups and consumers who believe 

effective enforcement will be impossible 

without a complete ban on abandoned 

calls. Moreover, violators who are now 

intentionally ignoring the TSR’s 

requirements are just as likely to violate 

a total ban on abandoned calls. 

Likewise, the continued opposition of 

consumer advocates and consumers to 

any safe harbor that allows a small 

percentage of abandoned calls in order 

that industry and consumers may 

benefit from the cost savings permitted 

by the efficiencies of predictive dialers 

simply seeks a reconsideration of the 

Commission’s careful balancing of the 

competing interests during the TSR 

amendment proceeding.451 It also 

ignores the fact that the Commission 

endeavored to minimize the harms of 

abandoned calls at that time by adding 

the Caller ID and recorded message 

requirements to the TSR, precisely so 

that consumers would not be frightened 

by hang-ups from unidentified callers, 

and would be able to make companyspecific Do Not Call requests.452

Moreover, opponents of the proposed 

amendment object, in effect, to allowing 

sellers and telemarketers the full three 

percent abandonment rate previously 

set by the Commission. They focus not 

on the fact that sellers and telemarketers 

still would be required to maintain no 

more than a three percent abandonment 

rate, but on the fact that there may be 

some modest increase in the number of 

abandoned calls because the industry 

would no longer be forced by the 

current ‘‘per day’’ standard to hold their 

abandonment rates below three percent, 

so that unexpected spikes in 

abandonment rates that occur late in the 

day do not violate the TSR. 

Opponents contend that the proposed 

amendment must fail because the record 

lacks ‘‘clear and convincing evidence.’’

Nevertheless, the Commission 

concludes that the preponderance of the 

evidence on the record as a whole 

supports adoption of the proposed 

amendment. The factual basis for the 

proposed amendment does not 

necessarily require ‘‘empirical 

evidence,’’ and in this case demands 

only a rudimentary understanding of 

statistical theory and standard 

deviation. The Commission is more than 


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51200 Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 

453 71 FR at 58728–30. 454 While it may not be mathematically possible 

to reduce a high abandonment rate for a large 

campaign enough to meet the three percent 

requirement by averaging it with a low 

abandonment rate for a small campaign, as one 

industry comment asserts, see note 448, supra, and 

accompanying text, it would be possible to reduce 

a high abandonment rate in a small campaign by 

averaging it with a low rate from a large campaign. 455 See note 445, supra. Just as the need for the 

proposed amendment is supported by an 

understanding of statistics, rather than empirical 

evidence, an understanding of economics supports 

the ‘‘per campaign’’ limitation. See note 453, supra, 

and accompanying text. 456 44 USC 3501–3521. 

457 Although similar gloomy forecasts were 

provided in industry comments on the 

Commission’s proposal to establish the National Do 

Not Call Registry, the telemarketing industry has 

subsequently flourished. The Commission has no 

more reason to believe that these doomsday 

scenarios are more likely to occur as a result of the 

prerecorded call amendment than as a result of the 

creation of the Registry. 

458 SmartReply at 18–21. This comment appears 

to assume that the amendment would not permit 

sellers to obtain the required consumer agreements 

to receive prerecorded calls electronically pursuant 

to the E–SIGN Act. 

459 None of the comments on the amendment 

revising the method for measuring the permissible 

call abandonment rate provided any such data, or 

indicated that the amendment would have any of 

these effects. 

460 5 USC 601–612. 

satisfied that the reasons it set forth 

when it proposed the amendment and 

those stated here meet the applicable 

standard.453

The industry, for its part, primarily 

criticizes the proposed amendment for 

retaining the ‘‘per campaign’’ standard 

in the current call abandonment 

requirement. The industry expresses 

particular concern that the ‘‘per 

campaign’’ limitation may create 

inefficiencies if sellers cannot switch 

their resources from underperforming 

campaigns of less than 30 days duration 

solely because the abandonment rate for 

the campaign at that point is more than 

three percent. This concern, as well as 

industry uncertainty about the meaning 

of the term, ‘‘campaign,’’ may be 

alleviated by an explanation of the term. 

The Commission intends the term 

‘‘campaign’’ to refer to the offer of the 

same good or service for the same seller. 

As long as the same good or service is 

being offered for the same seller, the 

Commission will regard the offer as part 

of a single campaign, without regard to 

whether there are changes in the terms 

of the offer or the wording of any 

telemarketing script or scripts used to 

convey the offer. 

The Commission recognizes that the 

amendment will not eliminate every 

possible inefficiency in the use of 

predictive dialers that may arise from 

the TSR’s call abandonment prohibition. 

However, industry arguments that 

telemarketers are unlikely to target lessvalued customers with a 

disproportionate share of abandoned 

calls in the absence of a ‘‘per campaign’’

limitation remain unpersuasive, because 

removal of that requirement would 

leave consumers to rely on the 

industry’s good faith that it would not 

engage in such practices, despite 

obvious economic incentives to do 

otherwise.454 Even if the ‘‘vast majority’’

of cold calls are based on purchased 

calling lists, not all are, and 

telemarketers would have a greater 

financial incentive to keep 

abandonment rates low in wealthier zip 

codes than in middle or low-income zip 

codes.455

D. The Final Amendment 

For the foregoing reasons, after careful 

consideration of the entire record, the 

Commission has determined that it 

should adopt the amendment as 

proposed, and amend paragraph (i) of 

the ‘‘Pattern of Calls’’ prohibitions in 

Section 310.4(b)(4) of the TSR, as 

follows: 

(i) The seller or telemarketer employs 

technology that ensures abandonment of 

no more than three (3) percent of all calls 

answered by a person, measured over the 

duration of a single calling campaign, if 

less than 30 days, or separately over each 

successive 30-day period or portion thereof 

that the campaign continues. 

The Commission has further determined 

that the amendment should take effect 

on October 1, 2008. 

IV. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act (‘‘PRA’’), as amended,456

the Commission staff is seeking OMB 

approval of the final rule amendments 

to the TSR under OMB Control No. 

3084–0097. 

V. Regulatory Analysis and Regulatory 

Flexibility Act Requirements 

Under section 22 of the FTC Act, the 

Commission must issue a regulatory 

analysis for a proceeding to amend a 

rule only when it: (1) estimates that the 

amendment will have an annual effect 

on the national economy of 

$100,000,000 or more; (2) estimates that 

the amendment will cause a substantial 

change in the cost or price of certain 

categories of goods or services; or (3) 

otherwise determines that the 

amendment will have a significant effect 

upon covered entities or upon 

consumers. 

In general, the comments opposing 

the prerecorded call amendment 

asserted that sellers might be unable as 

a result of the amendment to use lowcost prerecorded messages, and thus 

would not be able to pass on the 

resulting savings to consumers. Many 

also argued that the cost of obtaining the 

consumers’ agreements to receive 

prerecorded messages as required by the 

amendment would not be insignificant, 

but this argument was based on the 

mistaken assumption that the 

amendment would not permit the use of 

electronic signatures and records 

allowed by the E–SIGN Act, and would 

necessitate the use of paper records, 

with their attendant printing and storage 

costs. Finally, many comments 

predicted, based on the same mistaken 

assumption, that the costs and burdens 

imposed by such an amendment would 

reduce the number of consumers who 

could be called to such an extent that it 

would no longer be economically 

feasible for telemarketers to provide 

prerecorded message services, and 

telemarketers specializing in such 

services would not be able to remain in 

business.457 Only one comment 

attempted to quantify the cost of the 

prerecorded call amendment,458 but 

neither it nor any of the other comments 

indicated, except as noted, that the 

amendment would have an annual 

impact of more than $100,000,000, 

cause substantial change in the cost of 

goods or services, or otherwise have a 

significant effect upon covered entities 

or consumers. 

To the extent, if any, that either of the 

two final rule amendments adopted by 

the Commission will have such 

effects,459 the Commission has 

explained above the need for, and the 

objectives of, the final amendments; the 

regulatory alternatives that the 

Commission has considered; the 

projected benefits and adverse economic 

or other effects, if any, of the 

amendments; the reasons that the final 

amendments will attain their intended 

objectives in a manner consistent with 

applicable law; the reasons for the 

particular amendments that the agency 

has adopted; and the significant issues 

raised by public comments, including 

the Commission’s assessment of and 

response to those comments. 

The Regulatory Flexibility Act 

(‘‘RFA’’)460 requires that the agency 

conduct an analysis of the anticipated 

economic impact of proposed rule 

amendments on small businesses. The 

purpose of a regulatory flexibility 

analysis is to ensure that the agency 

considers the impact on small entities 

and examines regulatory alternatives 

that could achieve the regulatory 

purpose while minimizing burdens on 

small entities. Section 605 of the RFA 

provides that such an analysis is not 

required if the agency head certifies that 


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461 5 USC 605. 

462 Although the call abandonment prohibition 

applies only to calls ‘‘answered by a person,’’ the 

Commission has determined, pursuant to the 

Telemarketing Act, that the amendment should also 

apply to prerecorded calls picked up by answering 

machines and voicemail services. 

463 None of the comments on the amendment 

revising the method for measuring the maximum 

permissible call abandonment rate challenged the 

Commission’s analysis of the issue or proposed an 

alternative solution. 

the regulatory action will not have a 

significant economic impact on a 

substantial number of small entities.461

The Commission believes that the two 

amendments to the TSR that it is 

adopting are not likely to have a 

significant impact on small business for 

several reasons. By their nature, most 

small businesses serve local customers, 

develop personal relationships with 

their clientele, and are therefore likely 

to be able to obtain their customers’

agreements to receive useful 

prerecorded telemarketing messages. 

Moreover, purely informational 

prerecorded messages are not covered 

by the TSR, and the use of such 

messages to schedule service calls, 

delivery times, and the like therefore 

will not be subject to the written 

agreement requirement. In addition, to 

the extent that, in this Internet age, 

small businesses may no longer be 

strictly local businesses, the option 

provided by the amendment to obtain 

written agreements to receive 

prerecorded message calls pursuant to 

E–SIGN will place them on an equal 

footing with other businesses. Finally, 

as a result of the Commission’s decision 

to defer the effective date of the written 

agreement requirement for twelve 

months, small businesses with annual 

service or other contracts with their 

customers will have ample time to 

revise their contracts and seek their 

customers’ permission to receive 

prerecorded telemarketing messages. 

For these same reasons, the 

Commission believes that small 

business telemarketers providing 

prerecorded call services to such small 

business sellers are unlikely to be 

significantly affected by the prerecorded 

call amendment. In addition, for more 

than two years, small and large 

telemarketers alike, as well as sellers 

that conduct their own telemarketing, 

have been governed by the 

Commission’s enforcement forbearance 

policy for prerecorded messages 

answered by a consumer, which has 

mandated an up-front disclosure to 

consumers of how to opt out, and 

encouraged the use of an interactive optout mechanism. During that time, 

according to the comments, many of 

which came from small business 

telemarketers, the industry has 

transitioned to automated interactive 

message systems that are now affordable 

and widely available. Consequently, the 

Commission has no reason to believe 

that the 90 days it is allowing for sellers 

and telemarketers to provide automated 

interactive opt-out mechanisms will 

disadvantage either small or large 

business telemarketers or sellers. 

Although prerecorded message calls 

placed on answering machines or 

voicemail services were not subject to 

the Commission’s enforcement 

forbearance policy, there is nothing in 

the record to suggest that application of 

the requirement of an automated 

interactive opt-out mechanism to such 

calls could not be accomplished within 

the phase-in period, or would 

disadvantage either small or large 

business telemarketers or sellers. 

The Commission also believes that the 

amendment adjusting the method for 

measuring the permissible call 

abandonment rate by predictive dialers 

in live telemarketing campaigns is not 

likely to have a significant impact on 

small business. If anything, the change 

in the standard from a ‘‘per day’’ to a 

per-30-day calculation should lead to a 

reduction in the cost of live 

telemarketing campaigns for both small 

and large businesses, for the reasons 

previously stated, and will likely 

encourage the use of such calls to EBR 

customers by small and large businesses 

alike. In fact, small business sellers and 

telemarketers are likely to derive the 

greatest benefit from the amendment 

because the smaller size of their calling 

lists has prevented full realization of the 

efficiencies of predictive dialers under 

the existing measurement standard, an 

unintended consequence that the 

amendment will correct. 

Accordingly, the Commission 

concludes that the two amendments to 

the TSR will not have a significant or 

disproportionate impact on the costs of 

small business. Based on the 

information in the record, therefore, the 

Commission certifies that the two 

amendments published in this 

document will not have a significant 

economic impact on a substantial 

number of small businesses. 

Nonetheless, to ensure that no such 

impact has been overlooked, the 

Commission has conducted the 

following final regulatory flexibility 

analysis, as summarized below: 

A. Need for and Objective of the 

Amendments 

As previously discussed, the 

Commission is issuing the prerecorded 

call amendment to make explicit the 

prohibition on such calls implicit in the 

TSR’s call abandonment provision, 

while expressly permitting prerecorded 

calls made by or on behalf of sellers to 

consumers who have given the seller a 

written agreement to receive such calls. 

The proposed explicit prohibition of all 

prerecorded telemarketing calls without 

the consumer’s express prior written 

agreement implements the 

Telemarketing Act requirement that the 

Commission prohibit a pattern of 

unsolicited telephone calls that ‘‘the 

reasonable consumer would consider 

coercive or abusive of such consumer’s 

right to privacy,’’ and effectuates the 

apparent intent of Congress in the TCPA 

to prohibit prerecorded telemarketing 

calls, regardless of whether they are 

answered in person or by an answering 

machine or voicemail service.462

The Commission is also issuing an 

amendment that will modify the 

existing safe harbor to allow sellers and 

telemarketers to measure the three 

percent maximum call abandonment 

rate prescribed in § 310.4(b)(4)(i) for a 

single calling campaign over a 30-day 

period, rather than on a daily basis, as 

is currently required. This amendment, 

also made pursuant to the 

Telemarketing Act, will enhance the 

efficiency of the predictive dialers used 

in live telemarketing campaigns, 

allowing businesses to focus their 

telemarketing on smaller groups of 

consumers, which will lower marketing 

costs and make live campaigns more 

affordable for small businesses. The 

amendment will also permit more 

narrowly targeted telemarketing to 

smaller groups of consumers who are 

the most likely to be interested in a 

particular offer. 

B. Significant Issues Raised by Public 

Comment; Summary of the Agency’s 

Assessment of these Issues; and 

Changes, if any, Made in Response to 

Such Comments 

As discussed in Section III above, the 

principal issues raised by the industry 

comments relate to the potential costs 

and burdens of the requirement for 

obtaining consumers’ express written 

agreement to receive prerecorded 

telemarketing calls, and concerns about 

economic hardship for telemarketers 

that specialize in prerecorded 

telemarketing and their customers if too 

few consumers agree to receive such 

calls.463

As previously noted, most of the 

industry comments that objected to the 

cost and burden of obtaining written 

agreements from consumers to receive 

prerecorded calls mistakenly assumed 

that the amendment would not permit 

the use of agreements obtained 


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51202 Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 

464 16 CFR 310.3(a)(3)(i) n.5; 310.4(b)(1)(iii)(B)(i) 

n.6. 

465 71 FR at 58732. 

466 For example, the use by government and 

private sector entities of purely informational 

prerecorded messages that are not subject to the 

amendment appears to be increasing. 

467 Thus, the amendments will not apply to 

purely ‘‘informational’’ outbound calls that do not 

induce the purchase of goods or services or a 

charitable contribution. 

468 These numbers represent the size standards 

for most retail and service industries ($6 million 

total receipts) and manufacturing industries (500 

employees). A list of the SBA’s size standards for 

all industries can be found at (http://www.sba.gov/ 

size/summary-whatis.html). 

469 See TSR SBP, 68 FR at 4667 (noting that 

Census data on small entities conducting 

telemarketing does not distinguish between those 

entities that conduct exempt calling, such as survey 

calling, those that receive inbound calls, and those 

that conduct outbound calling campaigns. 

Moreover, sellers who act as their own 

telemarketers are not accounted for in the Census 

data). 

470 Id.; see also 68 FR 45134, 45143 (July 31, 

2003) (noting that comment was requested, but not 

received, regarding the number of small entities 

subject to the National Do Not Call Registry 

provisions of the amended TSR). 

471 See DMA petition, available at (http:// 

www.ftc.gov/os/2004/10/041019dmapetition.pdf). 

472 71 FR at 58731. 

473 Although industry comments have argued that 

the proposed revision would remove an obstacle to 

small business compliance with the call 

abandonment safe harbor, as discussed in Section 

III, supra, none of the comments has addressed the 

number of small businesses that might benefit from 

revision of the current standard. 

474 71 FR at 58731. 

475 See 16 CFR 310.5(a)(5). 

electronically pursuant to the E–SIGN 

Act, notwithstanding express statements 

in comparable provisions of the TSR 

permitting such agreements.464 The 

Commission has accordingly added a 

comparable footnote to the final 

amendment to make it clear that the 

required agreements may be obtained 

electronically pursuant to E–SIGN in 

order to minimize compliance costs and 

burdens. 

Many comments also requested that 

the Commission provide adequate time 

for preparations to comply with the 

written agreement requirement by 

deferring its effective date for six 

months or longer, and permitting all 

affected entities to continue calling EBR 

customers until the requirement takes 

effect. Although the Commission 

previously had stated that it did not 

believe that a delayed effective date 

would necessarily reduce compliance 

burdens for small entities,465 the 

Commission has been persuaded by the 

comments to defer the effective date of 

the written agreement requirement for 

twelve months. 

The Commission has also been 

persuaded by the comments to defer the 

effective date of the requirement in the 

amendment that sellers and 

telemarketers provide an automated 

interactive opt-out mechanism until 

December 1, 2008, even though the 

comments, many of which came from 

small business telemarketers that 

currently use such mechanisms, assert 

that this technology is now affordable 

and widely available. 

A number of comments from industry 

and consumers who oppose the 

amendment expressed concern that the 

written agreement requirement would 

create economic hardships for entities 

specializing in prerecorded 

telemarketing and their customers if too 

few customers agree to receive such 

calls. However, many in the industry 

contended, on the contrary, that there 

are a significant number of consumers 

who wish to receive prerecorded 

telemarketing messages. The 

Commission believes that the 

prerecorded call amendment will 

enhance consumer choice, and permit 

those consumers who wish to receive 

prerecorded messages to sign up to 

receive them while protecting the 

privacy of those who do not wish to be 

disturbed. Having received industry 

comments asserting that a National Do 

Not Call Registry would result in the 

demise of the telemarketing industry, 

when it has subsequently flourished, the 

Commission doubts that the amendment 

will have the predicted negative 

effect.466

C. Description and Estimate of Number 

of Small Entities Subject to the Final 

Amendments or Explanation Why no 

Estimate is Available 

Each of the proposed rule 

amendments will affect sellers and 

telemarketers that make interstate 

telephone calls to consumers (outbound 

calls) as part of a plan, program, or 

campaign which is conducted to induce 

the purchase of goods or services or a 

charitable contribution.467 For the 

majority of entities subject to the 

proposed rule, a small business is 

defined by the Small Business 

Administration as one whose average 

annual receipts do not exceed $6 

million or that has fewer than 500 

employees.468

Prior to the October 2006 request for 

comment, the Commission had not 

previously sought comment on an 

explicit prohibition of prerecorded 

telemarketing calls without the 

consumer’s express prior written 

agreement. Although the Commission 

specifically requested information or 

comment on the number of small 

entities that would be subject to the 

proposed prerecorded call amendment, 

none of the comments provided this 

information. Based on the absence of 

available data in this and related 

proceedings, the Commission believes 

that a precise estimate of the number of 

small entities that would be subject to 

the prerecorded call amendment is not 

currently feasible. 

For example, in the proceedings to 

amend the TSR in 2002, the 

Commission sought public comment 

and information on the number of small 

business sellers and telemarketers that 

would be impacted by amendment of 

the standard for measuring the three 

percent call abandonment rate. In its 

request, the Commission noted the lack 

of publicly available data regarding the 

number of small entities that might be 

impacted by the proposed Rule.469 The 

Commission received no information in 

response to its request.470

Likewise, neither the original petition 

to amend the call abandonment safe 

harbor to expand the period over which 

the three percent call abandonment 

ceiling for live telemarketing calls is 

calculated,471 nor the industry 

comments on that issue,472 provided 

any data regarding the number of small 

entities that may be affected by the 

Commission’s ultimate 

determination.473 Although the 

Commission subsequently renewed its 

request for this information in the most 

recent request for comment,474 none of 

the comments on the amendment 

addressed the issue. Based on the 

absence of available data in this and 

related proceedings, the Commission 

believes that a precise estimate of the 

number of small entities that fall under 

the amendment of the method for 

measuring the maximum permissible 

call abandonment rate is not currently 

feasible. 

D. Description of the Projected 

Reporting, Recordkeeping, and Other 

Compliance Requirements of the 

Amendments, Including an Estimate of 

the Classes of Small Entities That Will 

Be Subject to the Amendments and the 

Type of Professional Skills That Will Be 

Necessary to Comply 

The rule amendment explicitly 

prohibiting prerecorded telemarketing 

calls unless the consumer has agreed in 

writing to accept such calls will affect 

the TSR’s recordkeeping requirements 

insofar as it would compel regulated 

entities to keep records of such 

agreements under the general 

recordkeeping requirements of the 

existing rule.475 It appears, however, 

that there should be no significant 

change in this burden since regulated 

entities, regardless of size, already are 

required to maintain electronic or other 


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Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 51203 

476 47 CFR 64.1200(a)(2)(iv). See also, e.g., Ariz. 

Rev. Stat., § 44—1278(B)(4) (permitting prerecorded 

calls with called party’s ‘‘prior express consent’’); 

Ind. Code, § 24—5—14—5 (permitting prerecorded 

calls where there is a ‘‘current business or personal 

relationship’’). 

477 See, e.g., Cal. Pub. Util. Comm’n, Decision 

03— 03—038 (Mar. 13, 2003), at 19 (adopting the 

FCC’s 30-day standard for measuring call 

abandonment rates). 478 69 FR at 67291 & n.19; 71 FR at 58727. 

records of the existence of an EBR in the 

ordinary course of business in order to 

demonstrate compliance with existing 

FTC and FCC restrictions on 

prerecorded calls. The only difference is 

that, instead of keeping records of EBR 

relationships as a precondition for 

placing prerecorded calls, the 

amendment instead will require sellers 

to maintain records of consumers’

agreements to receive such calls. Since 

the Commission has emphasized that 

these agreements may be obtained 

pursuant to E–SIGN, minimal additional 

recordkeeping should be necessary. For 

these reasons, the prerecorded call 

amendment would not impose or affect 

any new or existing reporting, 

recordkeeping or third- party disclosure 

requirements within the meaning of the 

PRA. 

In addition, the Commission does not 

believe that the amendment to expand 

the period over which the three percent 

call abandonment ceiling for live 

telemarketing calls is calculated will 

create any new burden on sellers or 

telemarketers, because the existing ‘‘per 

day per campaign’’ standard of the TSR 

already requires them to establish 

recordkeeping systems to demonstrate 

their compliance. The Commission also 

does not believe that this modification 

of the Rule will materially increase any 

existing compliance costs, and may in 

fact reduce them for small entities that 

are able to take advantage of the revised 

safe harbor requirement. 

E. Identification of Other Duplicative, 

Overlapping, or Conflicting Federal 

Rules 

The FTC is mindful that the 

amendment explicitly prohibiting all 

prerecorded telemarketing calls without 

the consumer’s express prior written 

agreement differs from the FCC’s 

regulations and some State laws, which 

permit sellers to place such calls to 

consumers who have given their prior 

express consent or to consumers with 

whom the seller has an ‘‘established 

business relationship.’’476 However, the 

Commission does not believe that an 

explicit prohibition would conflict with 

the FCC regulations or similar State 

laws, because compliance with the 

TSR’s present prohibition does not 

violate those more permissive 

standards. 

With respect to the amendment 

revising the method for measuring the 

maximum permissible call 

abandonment rate, the FTC has not 

identified any other Federal or State 

statutes, rules, or policies that would 

overlap or conflict with this 

amendment, except as indicated below. 

The amendment would help to reduce 

the differences on this issue between the 

TSR and the FCC’s TCPA rules, as well 

as similar state requirements.477 As the 

Commission has reiterated, compliance 

with the FTC’s more precise standard 

would constitute acceptable compliance 

with the FCC rule and similar state 

requirements, so there is no conflict 

between these regulations.478

F. Steps the Agency Has Taken to 

Minimize Any Significant Economic 

Impact on Small Entities, Consistent 

with the Stated Objectives of the 

Applicable Statutes, Including the 

Factual Policy, and Legal Reasons for 

Selecting the Alternatives Finally 

Adopted, and Why Each of the 

Significant Alternatives, If Any, Were 

Rejected. 

The amendment adding an explicit 

prohibition of prerecorded 

telemarketing calls without a 

consumer’s express prior written 

agreement implements the requirement 

in the Telemarketing Act that the 

Commission prescribe rules that include 

a prohibition against ‘‘a pattern of 

unsolicited telephone calls which the 

reasonable consumer would consider 

coercive or abusive of such consumer’s 

right to privacy.’’ Since the Commission 

has previously rejected a safe harbor to 

permit EBR-based prerecorded calls, the 

only workable alternatives to this 

explicit prohibition would be to retain 

the present implicit prohibition of such 

calls in § 310.4(b)(4)(i) (the call 

abandonment provision), or to limit the 

prohibition on prerecorded calls except 

with a consumer’s prior written 

agreement only to calls that are 

answered in person, rather than by an 

answering machine or voicemail 

service. After careful consideration, the 

Commission has rejected each of these 

alternatives as inconsistent with the 

mandate of the Telemarketing Act, 

based on the record in this proceeding 

and its enforcement experience. 

The amendment of the existing call 

abandonment safe harbor replaces the 

present requirement that the three 

percent maximum call abandonment 

rate be measured ‘‘per day per 

campaign,’’ with a revised requirement 

that the maximum be measured ‘‘over 

the duration of the campaign, if less 

than 30 days, or separately over each 

successive 30-day period or portion 

thereof that the campaign continues.’’

Other regulatory options considered by 

the Commission included retaining the 

present ‘‘per day per campaign’’

standard or requiring that the maximum 

call abandonment rate be measured over 

a 30-day period for all of a 

telemarketer’s campaigns. The 

Commission does not believe, however, 

that the present standard should be 

retained, or that a standard that lacks a 

‘‘per campaign’’ limitation would be 

adequate to protect disfavored 

consumers from receiving a 

disproportionate share of abandoned 

calls. 

The amendments explicitly 

prohibiting prerecorded calls without 

consumers’ express agreement to receive 

them and revising the method for 

measuring the maximum permissible 

call abandonment rate are intended to 

apply to all entities subject to the 

amendments. The Commission has 

carefully considered industry comments 

requesting a sufficient phase-in period 

to minimize the costs and burdens of 

complying with the prerecorded call 

amendment, and for these reasons has 

decided to defer the effective date of the 

amendment’s written agreement 

requirement for twelve months for all 

entities, including small businesses. 

Although the industry comments, 

including comments from small 

business telemarketers, indicated that 

automated interactive opt-out 

mechanisms are now affordable and 

widely available, the Commission is 

also deferring the effective date of the 

interactive opt-out requirements of the 

amendment until December 1, 2008, to 

ensure that all affected entities will have 

sufficient time to prepare to comply. 

Although the Commission will revoke 

its enforcement forbearance policy for 

prerecorded telemarketing calls when 

the interactive opt-out requirements 

take effect because of inconsistencies in 

their requirements, the Commission has 

decided to permit sellers to continue 

making prerecorded calls to existing and 

new EBR customers who do not opt out 

until the written agreement requirement 

takes effect. 

None of the comments on the 

amendment of the method for 

measuring the maximum permissible 

call abandonment rate similarly 

requested any delay to give affected 

entities sufficient time to prepare to 

comply. Since this amendment will 

benefit all small and large entities 

making live telemarketing calls, there is 

no apparent reason to delay its 

implementation. Accordingly, the 

Commission has determined that the 


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51204 Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Rules and Regulations 

7 For purposes of this Rule, the term ‘‘signature’’

shall include an electronic or digital form of 

signature, to the extent that such form of signature 

is recognized as a valid signature under applicable 

federal law or state contract law. 

amendment should take effect on 

October 1, 2008. 

VI. Final Amendments 

List of Subjects in 16 CFR Part 310 

Telemarketing, Trade practices. 

■ For the reasons discussed in the 

preamble, the Federal Trade 

Commission amends 16 CFR part 310 as 

follows: 

PART 310—TELEMARKETING SALES 

RULE 

■ 1. The authority citation for part 310 

continues to read as follows: 

Authority: 15 USC 6101—6108. 

■ 2. In § 310.5, redesignate footnote 8 as 

9. 

■ 3. In § 310.4, redesignate footnote 7 as 

8. 

■ 4. Amend § 310.4 by adding new 

paragraph (b)(1)(v), and revising 

paragraph (b)(4)(i) to read as follows: 

§ 310.4 Abusive telemarketing acts or 

practices. 

* * * * * 

(b) * * * 

(1) * * * 

(v) Initiating any outbound telephone 

call that delivers a prerecorded message, 

other than a prerecorded message 

permitted for compliance with the call 

abandonment safe harbor in 

§ 310.4(b)(4)(iii), unless: 

(A) in any such call to induce the 

purchase of any good or service, the 

seller has obtained from the recipient of 

the call an express agreement, in 

writing, that: 

(i) the seller obtained only after a clear 

and conspicuous disclosure that the 

purpose of the agreement is to authorize 

the seller to place prerecorded calls to 

such person; 

(ii) the seller obtained without 

requiring, directly or indirectly, that the 

agreement be executed as a condition of 

purchasing any good or service; 

(iii) evidences the willingness of the 

recipient of the call to receive calls that 

deliver prerecorded messages by or on 

behalf of a specific seller; and 

(iv) includes such person’s telephone 

number and signature;7 and 

(B) in any such call to induce the 

purchase of any good or service, or to 

induce a charitable contribution from a 

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

behalf the call is made, the seller or 

telemarketer: 

(i) allows the telephone to ring for at 

least fifteen (15) seconds or four (4) 

rings before disconnecting an 

unanswered call; and 

(ii) within two (2) seconds after the 

completed greeting of the person called, 

plays a prerecorded message that 

promptly provides the disclosures 

required by § 310.4(d) or (e), followed 

immediately by a disclosure of one or 

both of the following: 

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

answered in person by a consumer, that 

the person called can use an automated 

interactive voice and/or keypressactivated opt-out mechanism to assert a 

Do Not Call request pursuant to 

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

the message. The mechanism must: 

(1) automatically add the number 

called to the seller’s entity-specific Do 

Not Call list; 

(2) once invoked, immediately 

disconnect the call; and 

(3) be available for use at any time 

during the message; and 

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

answered by an answering machine or 

voicemail service, that the person called 

can use a toll-free telephone number to 

assert a Do Not Call request pursuant to 

§ 310.4(b)(1)(iii)(A). The number 

provided must connect directly to an 

automated interactive voice or keypressactivated opt-out mechanism that: 

(1) automatically adds the number 

called to the seller’s entity-specific Do 

Not Call list; 

(2) immediately thereafter disconnects 

the call; and (3) is accessible at any time 

throughout the duration of the 

telemarketing campaign; and 

(iii) Complies with all other 

requirements of this Part and other 

applicable federal and state laws. 

(C) Any call that complies with all 

applicable requirements of this 

paragraph (v) shall not be deemed to 

violate § 310.4(b)(1)(iv) of this Part. 

(D) This paragraph (v) shall not apply 

to any outbound telephone call that 

delivers a prerecorded healthcare 

message made by, or on behalf of, a 

covered entity or its business associate, 

as those terms are defined in the HIPAA 

Privacy Rule, 45 CFR 160.103. 

* * * * * 

(4) 

(i) The seller or telemarketer employs 

technology that ensures abandonment of 

no more than three (3) percent of all 

calls answered by a person, measured 

over the duration of a single calling 

campaign, if less than 30 days, or 

separately over each successive 30-day 

period or portion thereof that the 

campaign continues. 

* * * * * 

By direction of the Commission. 

Donald S. Clark 

Secretary. 

[FR Doc. E8–20253 Filed 8–28–08; 8:45 am] 

BILLING CODE: 6750–01–S 


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