The complete guide to the Telemarketing Sales Rule (TSR)

In the dynamic realm of lead generation and acquisition, maintaining compliance with regulations is a critical aspect of operational success and legal safety. Every professional in this industry is well-versed in Telephone Consumer Protection Act (TCPA) compliance, but few are as familiar with the Telemarketing Sales Rule (TSR). 

In this comprehensive guide, we will help demystify the TSR, explaining its key elements, recent updates, common violations, and essential compliance strategies like ActiveProspect’s TrustedForm.

What is the Telemarketing Sales Rule?

The Telemarketing Sales Rules (TSR) is a crucial regulation enforced by the Federal Trade Commission  (FTC) to safeguard consumers from abusive telemarketing practices. Established in 1995, the TSR is designed to protect consumers across the United States from unwanted and deceptive calls. Whether you are a business engaged in telemarketing or a consumer on the receiving end of telemarketing calls, understanding the TSR is essential.

The TSR provides comprehensive guidelines that cover the vast array of telemarketing activities, including traditional phone calls, as well as automated calls and text messages to both wireless numbers and landlines. The rule aims to protect consumers from various forms of telemarketing fraud by setting forth specific requirements that telemarketers must follow:

  1. Prohibition on certain calls: The TSR makes it illegal for telemarketers to call any number listed on the National Do Not Call (DNC) Registry. This registry was created to give consumers a choice about receiving telemarketing calls and is a vital tool for managing privacy.
  2. Time restrictions: Telemarketing calls are restricted to reasonable hours, specifically prohibiting calls before 8 a.m. or after 9 p.m. local time of the recipient, ensuring that telemarketing practices do not intrude excessively on the personal time of consumers.
  3. Mandatory disclosures: Telemarketers are required to promptly disclose significant information at the beginning of a call, including their identity, the entity they represent, and the true purpose of the call. This transparency allows consumers to make informed decisions about engaging with the telemarketer.
  4. Consent requirements: For any calls involving automated telephone dialing systems (ATDS) or prerecorded messages, telemarketers must obtain prior express written consent from consumers. This rule respects consumer preferences and protects them from unsolicited robocalls.
  5. Ban on misrepresentations: The TSR strictly bans any misrepresentations that might deceive consumers. This includes misleading information about the costs, the nature, or the purpose of products and services offered.

Recent updates to the Telemarketing Sales Rule by the FTC

The FTC has made several key updates to the TSR over the years to reflect changes in telemarketing practices and address new consumer protection issues. The most recent update came in April 2024 and expanded restrictions on Business-to-Business (B2B) communications and heightened record-keeping requirements.

– Extended coverage to B2B telemarketing: The TSR now includes certain B2B telemarketing activities. This expansion aims to curb deceptive and misleading practices previously rampant in B2B telemarketing, which were not as heavily regulated as Business-to-Consumer (B2C) interactions.

– Record-keeping requirements: Both B2C and B2B telemarketers are now required to maintain detailed records of all outbound telemarketing activities. These records must include call details, customer information, Established Business Relationship (EBR) records, consent records, opt-out requests, and usage of the National Do-Not-Call (DNC) registry. This requirement is designed to bolster accountability and compliance verification.

– Updated DNC record-keeping: The period for retaining DNC records has been extended from two years to five years. This change aligns with the statute of limitations for civil penalties, reflecting the FTC’s expectation that businesses maintain thorough documentation to support compliance over a longer duration.

These updates took effect on May 16, 2024, but are allowing a grace period of 180 days for businesses to comply fully by October 15, 2024. Companies are encouraged to use this time to implement necessary changes and leverage tools like TrustedForm to help meet the new and expanded requirements related to consent to contact documentation and record retention.

Common violations of the Telemarketing Sales Rule

Navigating the regulations of the TSR is crucial for businesses engaging in telemarketing to avoid legal pitfalls and maintain their reputation. Here are some of the most frequent TSR violations that companies should be aware of:

  • Failure to disclose identity and purpose: Telemarketers must immediately identify themselves, the company they represent, and the purpose of their call at the beginning of each interaction. Neglecting to provide this information breaches the TSR and can mislead consumers.
  • Making false or misleading statements: It is illegal for telemarketers to provide consumers with incorrect or deceptive information about products or services. This includes fabricating affiliations or benefits associated with the product that do not exist.
  • Deceptive sales tactics: Employing tactics that create a false sense of urgency or impersonating government agencies or reputable businesses to gain consumer trust are strictly prohibited under the TSR.
  • Calling numbers on the DNC registry: Telemarketers must refrain from calling any numbers listed on the National Do Not Call Registry unless they have explicit written consent from the consumer to make such calls.
  • Failing to provide opt-out opportunities: Every telemarketing call must include an easy way for consumers to opt out of future communications, typically through a toll-free number or a website.
  • Ignoring opt-out requests: Once a consumer opts out, telemarketers are required to comply with this request and cease all calls to the consumer within 30 days.

Other common violations:

  • Call-time infractions: Telemarketers must adhere to allowed calling times, avoiding calls before 8 a.m. or after 9 p.m. local time of the recipient.
  • Unauthorized robocalls: Making automated calls without prior express consent from the consumer is a violation of the TSR.
  • Incomplete disclosures: Telemarketers are obligated to fully disclose critical information about the identity of the seller, the nature of the goods or services, and the purpose of the call.

Penalties for flouting the TSR are steep. Per the official TSR government website: 

“Anyone who violates the TSR is subject to civil penalties of up to $51,744 for each violation. In addition, violators may be subject to nationwide injunctions that prohibit certain conduct, and may be required to pay redress to injured consumers.”

Tips for complying with the Telemarketing Sales Rule

Compliance with the TSR is crucial for maintaining the legality and integrity of your telemarketing operations. Adhering to the TSR not only helps avoid hefty fines and legal issues but also bolsters your company’s reputation and customer trust. Here are a few essential TSR compliance best practices to follow:

  • Immediate and clear disclosure: Start every call by clearly stating the telemarketer’s name, the company they represent, and the purpose of the call. Ensure that all material information about the product or service is disclosed upfront, without resorting to deceptive or misleading language.
  • Strict calling time policies: Adhere strictly to the TSR’s stipulations regarding permissible calling times (typically not before 8 a.m. or after 9 p.m. local time of the recipient). Ensure all staff are aware of these restrictions.
  • Maintain an updated call list: Regularly update your call lists to ensure compliance with the National DNC Registry. Promptly honor opt-out requests by adding such numbers to your own do-not-call list, ensuring these consumers are not contacted in the future.
  • Utilize compliant call management systems: Implement call management software that adheres to TSR guidelines. This includes features like call recording, which can provide evidence during disputes, and caller ID authentication to prevent illegal caller ID spoofing.
  • Consent verification: Utilizing tools like ActiveProspect’s TrustedForm to obtain and document consumer consent transactions on web forms and social lead ads in real time. This helps address compliance documentation requirements and can reduce the risk of consent-related disputes.

Furthermore, implementing a culture of compliance could help organizations adapt and evolve to any updated compliance regulations. Encourage a workplace environment where ethical practices are celebrated and compliance with TSR is a top priority. 

A few best practices include:

  • Regular auditing and monitoring: Regularly audit and review your telemarketing practices to ensure they align with TSR requirements. This might include checking call logs, consent verification processes, and compliance with the national, state, and internal do-not-call lists.
  • Annual training and education: Conduct regular training sessions for your telemarketing staff to ensure they understand and can apply TSR regulations effectively. Continuous education helps staff recognize and avoid potential violations.
  • Communication: Open lines of communication should be maintained so that team members can report concerns or seek advice on compliance issues without hesitation.

State-related TSR requirements 

It is important to also be aware that individual U.S. states may also have their own telemarketing sales rules (TSRs) in addition to the federal TSR enforced by the FTC. These state laws may be more restrictive or have additional requirements compared to the federal TSR. Some states may have specific laws targeting certain industries or types of telemarketing practices.

It’s crucial for businesses engaging in telemarketing to be aware of and comply with both federal and relevant state TSRs. Non-compliance can lead to legal action and penalties at both the state and federal levels.

To find out the specific TSR rules in a particular state, you can refer to the following resources:

  • State Attorney General’s Office: The website of individual state attorney generals usually provides information about consumer protection laws, including telemarketing regulations.  
  • National Association of State Attorney Generals (NAG): Includes information about telemarketing initiatives and announcements that state AGs performed collectively.   
  • State Legislature Website: May provide the full text of the state’s telemarketing laws.
  • National Conference of State Legislatures (NCSL): Offers resources on state laws and legislation, including telemarketing regulations.

It’s advisable to consult with legal counsel or a compliance expert to ensure your telemarketing practices comply with all applicable federal and state laws.

Final thoughts

The recent updates to the TSR reflect a growing need for transparency and accountability in both B2C and B2B telemarketing practices. These changes, particularly around extended coverage, enhanced record-keeping, and stricter DNC compliance, demand meticulous attention to detail from all telemarketing professionals. Whether you’re initiating a call, crafting a telemarketing strategy, or contracting with a third party to perform the calling or texting outreach on your behalf, the principles of clarity, honesty, and respect for consumer preferences should guide every interaction.

Navigating the TSR with diligence and strategic foresight can turn regulatory compliance from a challenge into an opportunity—a chance to enhance operational integrity, deepen consumer trust, and drive successful business outcomes.

Ready to equip your business with the tools needed to add transparency and consent to contact compliance before your calling or texting outreach? Explore TrustedForm today and take the first step towards safeguarding your operations and building lasting trust with your customers.

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