In a recent decision, the Federal Trade Commission raised the civil penalty for certain telemarketing sales law violations from $16,000 to $40,000 per instance, including fines for contacting individuals on Do-Not-Call (DNC) lists.

The FTC says the fee was more than doubled to adjust for inflation. The fine had been $16,000 since February of 2009; earlier it had been $11,000.

The Telemarketing Sales Rule (TSR) was adopted by the FTC to protect consumers against deceptive acts or practices by telemarketers. As such, it restricts the making of telemarketing calls and the use of automatic telephone dialing (robocalling) systems, and artificial or prerecorded voice messages. The rules apply to common carriers as well as to other marketers.

If your business uses telemarketing (a plan, program or campaign to induce the purchase of goods or services or a charitable contribution involving more than one interstate telephone call), you’ll want to read up on the do’s and don’ts of the TSR if paying $40,000 a pop per violation wouldn’t sit well with your accountants.

Don’ts—Avoid these common mistakes:

  • Calling numbers on the National DNC Registry without an exemption
  • Failing to suppress against the National DNC Registry once an established business relationship has expired
  • Neglecting to suppress against the business’s internal DNC list at the required minimum frequency
  • Failing to honor DNC requests or a DNC policy request within 30 days
  • Neglecting to train agents to make all TSR-required disclosures at the beginning of every call
  • Placing calls outside of the allowable timeframe of 8 a.m. to 9 p.m.
  • Failing to display accurate caller identification information (caller’s name and telephone number)
  • Abandoning more than 3 percent of calls per campaign per month

Do’s—Follow these best practices to comply with TSR:

  • Make certain prompt disclosures in every outbound and inbound call, including information a consumer would need to make an informed decision, before the consumer pays for the goods or services offered.
  • Promptly disclose four items of information before any sales pitch is given: seller’s identity; purpose of the call (to sell goods of services); the nature of the goods/services; in the case of a prize promotion, that no purchase or payment is required to participate or win.
  • Get express verifiable authorization if accepting payment by methods other than credit or debit card.
  • Maintain records for 24 months.
  • Comply with entity-specific DNC requirements.
  • Include a prompt keypress or voice-activated opt-out mechanism in any prerecorded message call on behalf of a non-profit organization to a member of, or previous donor to, the non-profit.