FTC 16 CFR 310.3
Sec. 310.3 Deceptive telemarketing acts or practices.
(a)
Prohibited deceptive telemarketing acts or practices. It is a
deceptive telemarketing act or practice and a violation of this Rule for
any seller or telemarketer to engage in the following conduct:
(1)
Before a customer pays for goods or services offered,
failing to disclose
truthfully, in a clear and conspicuous manner, the following material
information:
(i)
The total costs to purchase, receive, or use, and the quantity
of, any goods or services that are the subject of the
sales offer;
(ii)
All material restrictions, limitations, or conditions to
purchase, receive, or use the goods or services that are the subject of
the sales offer;
(iii)
If the seller has a policy of not making refunds,
cancellations, exchanges, or repurchases, a statement informing the
customer that this is the seller's policy; or, if the seller or
telemarketer makes a representation about a refund, cancellation,
exchange, or repurchase policy, a statement of all material terms and
conditions of such policy;
(iv)
In any prize promotion, the odds of being able to receive the
prize, and, if the odds are not calculable in advance, the factors used
in calculating the odds; that no purchase or payment is required to win
a prize or to participate in a prize promotion and that any purchase or
payment will not increase the person's chances of winning; and the no-
purchase/no-payment method of participating in the prize promotion with
either instructions on how to participate or an address or local or
toll-free telephone number to which customers may write or call for
information on how to participate;
(v)
All material costs or conditions to receive or redeem a prize
that is the subject of the prize promotion;
(vi)
In the sale of any goods or services represented to protect,
insure, or otherwise limit a customer's liability in the event of
unauthorized use of the customer's credit card, the limits on a
cardholder's liability for unauthorized use of a credit card pursuant to
15 U.S.C. 1643; and
(vii)
If the offer includes a negative option feature, all material
terms and conditions of the negative option feature, including, but not
limited to, the fact that the customer's account will be charged unless
the customer takes an affirmative action to avoid the charge(s), the
date(s) the charge(s) will be submitted for payment, and the specific
steps the customer must take to avoid the charge(s).
(2)
Misrepresenting, directly or by implication, in the sale of
goods or services any of the following material information:
(i)
The total costs to purchase, receive, or use, and the quantity
of, any goods or services that are the subject of a sales offer;
(ii)
Any material restriction, limitation, or condition to purchase,
receive, or use goods or services that are the subject of a sales offer;
(iii)
Any material aspect of the performance, efficacy, nature, or
central characteristics of goods or services that are the subject of a
sales offer;
(iv)
Any material aspect of the nature or terms of the seller's
refund, cancellation, exchange, or repurchase policies;
(v)
Any material aspect of a prize promotion including, but not
limited to, the odds of being able to receive a prize, the nature or
value of a prize, or that a purchase or payment is required to win a
prize or to participate in a prize promotion;
(vi)
Any material aspect of an investment opportunity including, but
not limited to, risk, liquidity, earnings potential, or profitability;
(vii)
A seller's or telemarketer's affiliation with, or endorsement
or sponsorship by, any person or government entity;
(viii)
That any customer needs offered goods or services to provide
protections a customer already has pursuant to 15 U.S.C. 1643; or
(ix)
Any material aspect of a negative option feature including, but
not limited to, the fact that the customer's account will be charged
unless the customer takes an affirmative action to avoid the charge(s),
the date(s) the charge(s) will be submitted for payment, and the
specific steps the customer must take to avoid the charge(s).
(3)
Causing billing information to be submitted for payment, or
collecting or attempting to collect payment for goods or services or a
charitable contribution, directly or indirectly, without the customer's
or donor's express verifiable authorization, except when the method of
payment used is a credit card subject to protections of the
Truth in Lending Act and Regulation Z;
, or a debit card subject to the
protections of the
Electronic Fund Transfer Act and Regulation E.
Such authorization shall be deemed verifiable if any of the following
means is employed:
(i)
Express written authorization by the customer or donor, which
includes the customer's or donor's
signature;
(ii)
Express oral authorization which is audio-recorded and made
available upon request to the customer or donor, and the customer's or
donor's bank or other billing entity, and which evidences clearly both
the customer's or donor's authorization of payment for the goods or
services or charitable contribution that are the subject of the
telemarketing transaction and the customer's or donor's receipt of all
of the following information:
(A)
The number of debits, charges, or payments (if more than one);
(B)
The date(s) the debit(s), charge(s), or payment(s) will be
submitted for payment;
(C)
The amount(s) of the debit(s), charge(s), or payment(s);
(D)
The customer's or donor's name;
(E)
The customer's or donor's billing information, identified with
sufficient specificity such that the customer or donor understands what
account will be used to collect payment for the goods or services or
charitable contribution that are the subject of the telemarketing
transaction;
(F)
A telephone number for customer or donor inquiry that is
answered during normal business hours; and
(G)
The date of the customer's or donor's oral authorization; or
(iii)
Written confirmation of the transaction, identified in a clear
and conspicuous manner as such on the outside of the envelope, sent to
the customer or donor via first class mail prior to the submission for
payment of the customer's or donor's billing information, and that
includes all of the information contained in Sec. Sec.
310.3(a)(3)(ii)(A)-(G) and a clear and conspicuous statement of the
procedures by which the customer or donor can obtain a refund from the
seller or telemarketer or charitable organization in the event the
confirmation is inaccurate; provided, however, that this means of
authorization shall not be deemed verifiable in instances in which goods
or services are offered in a transaction involving a free-to-pay
conversion and preacquired account information.
(4)
Making a false or misleading statement to induce any person to
pay for goods or services or to induce a charitable contribution.
(b)
Assisting and facilitating. It is a deceptive telemarketing act
or practice and a violation of this Rule for a person to provide
substantial assistance or support to any seller or telemarketer when
that person knows or consciously avoids knowing that the seller or
telemarketer is engaged in any act or practice that violates Sec. Sec.
310.3(a), (c) or (d), or Sec. 310.4 of this Rule.
(c)
Credit card laundering. Except as expressly permitted by the
applicable credit card system, it is a deceptive telemarketing act or
practice and a violation of this Rule for:
(1)
A merchant to present to or deposit into, or cause another to
present to or deposit into, the credit card system for payment, a credit
card sales draft generated by a telemarketing transaction that is not
the result of a telemarketing credit card transaction between the
cardholder and the merchant;
(2)
Any person to employ, solicit, or otherwise cause a merchant, or
an employee, representative, or agent of the merchant, to present to or
deposit into
the credit card system for payment, a credit card sales draft generated
by a telemarketing transaction that is not the result of a telemarketing
credit card transaction between the cardholder and the merchant; or
(3)
Any person to obtain access to the credit card system through
the use of a business relationship or an affiliation with a merchant,
when such access is not authorized by the merchant agreement or the
applicable credit card system.
(d)
Prohibited deceptive acts or practices in the solicitation of
charitable contributions. It is a fraudulent charitable solicitation, a
deceptive telemarketing act or practice, and a violation of this Rule
for any telemarketer soliciting charitable contributions to
misrepresent, directly or by implication, any of the following material
information:
(1)
The nature, purpose, or mission of any entity on behalf of which
a charitable contribution is being requested;
(2)
That any charitable contribution is tax deductible in whole or
in part;
(3)
The purpose for which any charitable contribution will be used;
(4)
The percentage or amount of any charitable contribution that
will go to a charitable organization or to any particular charitable
program;
(5)
Any material aspect of a prize promotion including, but not
limited to: the odds of being able to receive a prize; the nature or
value of a prize; or that a charitable contribution is required to win a
prize or to participate in a prize promotion; or
(6)
A charitable organization's or telemarketer's affiliation with,
or endorsement or sponsorship by, any person or government entity.
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