Today, the Federal Trade Commission (FTC) has published amendments to its Telemarketing Sales Rule (TSR or the Rule) in the Federal Register. The amendments will extend the Rule’s applicability to inbound calls made by a consumer in response to an advertisement or direct mail solicitation offering technical support products or services. This measure is aimed at curbing tech support scams and increasing accountability from technical support businesses. These calls will be treated as covered telemarketing calls.
The amendments will become effective on January 9, 2024.
Key Changes to the Telemarketing Sales Rule
The TSR’s coverage will now extend to inbound telemarketing calls for “technical support services.” This includes calls made by consumers to companies advertising technical support services through various media or direct mail solicitations.
The final rule defines “technical support services” as “any plan, program, software, or service that is marketed to repair, maintain, or improve the performance or security of any device on which code can be downloaded, installed, run, or otherwise used, such as a computer, smartphone, tablet, or smart home product, including any software or application run on such device.” Technical support service does not include any “plan, program, software, or service in which the person providing the repair, maintenance, or improvement obtains physical possession of the device being repaired.”
The FTC approved the amendments by a 4-1 vote, with Commission Andrew Ferguson voting no and issuing a dissenting statement. Commissioner Melissa Holyoak issued a separate concurring statement.
Implications for Businesses
Businesses offering technical support services should be aware that they will now be subject to the TSR’s regulations, even for inbound calls initiated by consumers. This change aims to hold businesses accountable and protect consumers from fraudulent practices.
Companies engaged in technical support services must ensure their practices align with the TSR’s provisions. This includes adhering to rules regarding disclosures, prohibited misrepresentations, and payment methods.
The FTC’s expanded authority under the amended TSR may lead to increased enforcement actions against companies engaged in deceptive tech support practices. Businesses should be prepared for heightened scrutiny.
Background and Rationale
The FTC’s decision to amend the TSR is driven by the significant financial losses reported due to tech support scams, particularly among older consumers. In 2023, consumers aged 60 and older were five times more likely to report losing money to tech support scams compared to younger individuals, with losses exceeding $175 million.
Recommendations for Clients
- Review current telemarketing practices, especially those related to technical support services, to ensure compliance with the amended TSR.
- Implement clear and transparent communication practices in all advertisements and direct mail solicitations for technical support services.
- Train staff on the new regulations and the importance of avoiding any practices that could be construed as deceptive or fraudulent.
- Consider implementing additional safeguards to protect vulnerable consumers, particularly older adults, from potential scams.
- Stay informed about any further guidance or clarifications issued by the FTC regarding the implementation of these amendments.
By taking proactive steps to align with these new regulations, businesses can mitigate the risk of potential enforcement actions while contributing to the broader effort to combat tech support scams and protect consumers.
The CommLaw Group Can Help!
Given the complexity and evolving nature of the FCC’s rules, regulations and industry policies & procedures around Robocall/Robotext Mitigation and Compliance issues (e.g., STIR/SHAKEN, TRACED Act, FCC & FTC Rules & Regulations, US Telecom Industry group, ATIS, NECA, VoIP Numbering Waivers, Know Your Upstream Provider and the private sector ecosystem), as well as the increased risk of business disputes, consumer protection enforcement by state attorneys general, and even civil litigation, and anticipating the potential torrent of client questions and concerns, The CommLaw Group formed a “Robocall Mitigation Response Team” to help clients (old and new) tackle their unique responsibilities.
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Susan Duarte – Tel: 703-714-1318 / E-mail: sfd@commlawgroup.com
Rob Jackson – Tel: 703-714-1316 / E-mail: rhj@CommLawGroup.com
Ron Quirk – Tel: 703-714-1305 / E-mail: req@CommLawGroup.com
Diana James – Tel: 703-663-6757 / E-mail: daj@CommLawGroup.com
