U.S. Federal Trade Commission Bans Prerecorded Telemarketing Messages

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U.S. Federal Trade Commission Bans Prerecorded Telemarketing Messages

8:35 am on August 21, 2008 | Category: Business, Regulation

In response to a wave of consumer complaints, the U.S. Federal Trade Commission has confirmed plans prevent telemarketers from making prerecorded sales calls to customers who have not explicitly agreed to receive such calls.

The FTC says it will also require all telemarketers to offer a functional opt-out feature on all prerecorded messages that would allow customers to instantly add themselves to the company’s do-not-call list.

These measures will “protect consumers from the annoyance and invasion of prerecorded sales messages that seem to be increasing every day,” according to the Consumer Federation of America’s director of consumer protection, Susan Grant.

Representatives of the telemarketing industry argue that the imposition of this regulation will force companies to use live operators, even for messages to existing customers, thereby increasing administrative costs, which are often passed on the the consumer.

“The prerecorded message was an inexpensive way to reach customers and now you’ll have to use operators to reach those customers,” commented Jerry Cerasale, senior vice president of government affairs at the Direct Marketing Association.

The FTC rejected these arguments, however, noting that “an overwhelming number of consumers hate prerecorded calls.”

Exempt from the new rules (which take effect on September 1) are strictly informational recorded calls, such as those reminding patients of upcoming doctor’s appointments, or alerting travelers of flight cancellations. Registered charities are partially exempt, but must still provide an opt-out feature.