Notice2022-08330
Agency Information Collection Activities; Proposed Collection; Comment Request; Extension
Primary source
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Published
April 19, 2022
Issuing agencies
Federal Trade Commission
Abstract
In accordance with the Paperwork Reduction Act of 1995 (PRA), the Federal Trade Commission (FTC or Commission) is seeking public comment on its proposal to extend for an additional three years the Office of Management and Budget (OMB) clearance for information collection requirements contained in the Telemarketing Sales Rule (TSR or Rule). That clearance expires on September 30, 2022.
Full Text
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<title>Federal Register, Volume 87 Issue 75 (Tuesday, April 19, 2022)</title>
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[Federal Register Volume 87, Number 75 (Tuesday, April 19, 2022)]
[Notices]
[Pages 23177-23181]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-08330]
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FEDERAL TRADE COMMISSION
Agency Information Collection Activities; Proposed Collection;
Comment Request; Extension
AGENCY: Federal Trade Commission.
ACTION: Notice.
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SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (PRA),
the Federal Trade Commission (FTC or Commission) is seeking public
comment on its proposal to extend for an additional three years the
Office of Management and Budget (OMB) clearance for information
collection requirements contained in the Telemarketing Sales Rule (TSR
or Rule). That clearance expires on September 30, 2022.
DATES: Comments must be received on or before June 21, 2022.
ADDRESSES: Interested parties may file a comment online or on paper by
following the instructions in the Request for Comments part of the
SUPPLEMENTARY INFORMATION section below. Write ``Telemarketing Sales
Rule; PRA Comment: FTC File No. P072108'' on your comment, and file
your comment online at <a href="https://www.regulations.gov">https://www.regulations.gov</a> by following the
instructions on the web-based form. If you prefer to file your comment
on paper, mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite
CC-5610 (Annex J), Washington, DC 20580, or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex
J), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Benjamin R. Davidson, Attorney, Bureau
of Consumer Protection, (202) 326-3055, Federal Trade Commission, 600
Pennsylvania Ave. NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION:
Title: Telemarketing Sales Rule (TSR or Rule), 16 CFR part 310.
OMB Control Number: 3084-0097.
Type of Review: Extension of a currently approved collection.
Abstract: As required by the Telemarketing and Consumer Fraud and
Abuse Prevention Act, 15 U.S.C. 6101-6108 (the ``Telemarketing Act''),
the TSR mandates certain disclosures for telephone sales and requires
telemarketers to retain certain records regarding advertising, sales,
and employees. The required disclosures provide consumers with
information necessary to make informed purchasing decisions. The
required records are to be made available for inspection by the
Commission and other law enforcement personnel to determine compliance
with the Rule. Required records may also yield information helpful to
measuring and redressing consumer injury stemming from Rule violations.
Likely Respondents: Telemarketers to consumers.
Estimated Annual Hours Burden: 1,228,050 hours.
<bullet> Disclosures (for live telemarketing calls and prerecorded
calls): 1,215,946 hours (which is derived from 826,389 hours for pre-
sales disclosures + 363,048 hours for general sales disclosures +
26,509 hours for specific sales disclosures).
<bullet> Reporting: 219 hours.
<bullet> Recordkeeping: 11,885 hours.
Estimated Annual Labor Cost Burden: $18,367,441 (which is derived
from $441,169 (recordkeeping) + $17,923,044 (disclosure) + $3,228
(reporting).\1\
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\1\ The hourly wage rates for sales and related workers are
based on mean hourly wages found at <a href="https://www.bls.gov/news.release/ocwage.t01.htm">https://www.bls.gov/news.release/ocwage.t01.htm</a> (``Occupational Employment and Wages-May
2021,'' U.S. Department of Labor, released March 2022, Table 1
(``National employment and wage data from the Occupational
Employment Statistics survey by occupation, May 2021'').
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Estimated Annual Non-Labor Cost: $4,619,156 (which is derived from
$241,750 (office supplies) + $4,377,406 (telephone charges)).
As required by section 3506(c)(2)(A) of the PRA, 44 U.S.C.
3506(c)(2)(A), the FTC is providing this opportunity for public comment
before requesting that OMB extend the existing clearance for the
information collection requirements contained in the TSR.
Burden Estimates
Brief description of the need for and proposed use of the
information.
Estimated Annual Hours Burden: 1,228,050 Hours
The estimated burden for recordkeeping compliance is 11,885 hours
for all industry members affected by the Rule. The estimated burden for
the requisite disclosures for both live telemarketing calls and
prerecorded calls is 1,215,946 hours for all affected industry members.
Estimated burden for reporting requirements is 219 hours. Thus, the
total PRA burden is 1,228,050 hours. These estimates are explained
below.
Number of Respondents:
In calendar year 2021, 11,756 telemarketing entities accessed the
Do Not Call Registry; however, 536 were ``exempt'' entities obtaining
access to data.\2\ Of the 11,220 non-exempt entities, 8,034 sellers and
3,186 telemarketers accessed the Registry. Of those, however, 4,843
sellers and 1,992 telemarketers obtained data for just one state. Staff
assumes that these 6,835 entities are operating solely intrastate, and
thus would not be subject to the TSR.\3\ Therefore, Staff estimates
that
[[Page 23178]]
4,385 telemarketing entities are currently subject to the TSR, of which
3,191 (8,034-4,843) are sellers and 1,194 (3,186-1,992) are
telemarketers.\4\
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\2\ An exempt entity is one that, although not subject to the
TSR, voluntarily chooses to scrub its calling lists against the data
in the Registry.
\3\ These entities would nonetheless likely be subject to the
Federal Communications Commission's (``FCC'') Telephone Consumer
Protection Act regulations, including the requirement that entities
engaged in intrastate telephone solicitations access the Registry.
\4\ For purposes of these calculations, staff assumes that
telemarketers making prerecorded calls download telephone numbers
listed on the Registry, rather than conduct online searches, because
the latter may consume much more time. Other telemarketers not
placing the high-volume of automated prerecorded calls may elect to
search online, rather than to download.
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(a) Recordkeeping Hours
Staff estimates that the 4,385 telemarketing entities subject to
the Rule each require approximately one hour per year to file and store
records required by the TSR for an annual total of 4,385 burden hours.
The Commission staff also estimates that 75 new entrants per year would
need to spend 100 hours each developing a recordkeeping system that
complies with the TSR for an annual total of 7,500 burden hours. These
figures, based on prior estimates, are consistent with staff's current
knowledge of the industry. Thus, the total estimated annual
recordkeeping burden for new and existing telemarketing entities \5\ is
11,885 hours.
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\5\ The recordkeeping requirements for prerecorded calls are de
minimis, and are subsumed within the PRA estimates above for
existing and new telemarketing entities. As in its prior estimates,
staff continues to believe that any ongoing incremental burden on
sellers to create and retain electronic records of written
agreements by new customers to receive prerecorded calls should not
be material since the agreements may be obtained and recorded
electronically pursuant to the Electronic Signatures In Global and
National Commerce Act (commonly, ``E-SIGN''). Although telemarketers
(and telefunders) that place prerecorded calls on behalf of sellers
or charities must capture and transmit to the seller any requests
they receive to place a consumer's telephone number on the seller's
entity-specific do-not-call list, this obligation extends both to
live and prerecorded telemarketing calls, and is also subsumed
within the PRA estimates above.
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(b) Disclosure Hours
Staff believes that in the ordinary course of business, a
substantial majority of sellers and telemarketers make the disclosures
the Rule requires because to do so constitutes good business practice.
To the extent this is so, the time and financial resources needed to
comply with disclosure requirements do not constitute ``burden.'' 5 CFR
1320.3(b)(2). Moreover, many state laws require the same or similar
disclosures as the Rule mandates. Thus, the disclosure hours burden
attributable solely to the Rule is far less than the total number of
hours associated with the disclosures overall. As when the FTC last
sought OMB clearance, staff estimates that most of the Rule disclosures
would be made in at least 75 percent of telemarketing calls even absent
the Rule.\6\ Accordingly, staff has continued to estimate that the
hours of burden for most of the Rule's disclosure requirements is 25
percent of the total hours.
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\6\ 84 FR at 22,845.
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Pre-Sale Disclosures
Consistent with its past practice, staff necessarily has made
additional assumptions in estimating burden. Based on industry data and
further FTC extrapolations,\7\ staff estimates that 2.3 billion
outbound telemarketing calls are subject to FTC jurisdiction and
attributable to direct orders, that 450 million of these calls result
in direct sales,\8\ and that there are 1.8 billion inbound calls that
result in direct sales. Staff retains its longstanding estimate that,
in a telemarketing call involving the sale of goods or services, it
takes 7 seconds \9\ for telemarketers to recite the required pre-sale
disclosures plus 3 additional seconds \10\ to disclose the information
required in the case of an upsell.\11\ Staff also retains its
longstanding estimates that at least 60 percent of sales calls result
in ``hang-ups'' before the telemarketer can make all the required
disclosures and that ``hang-up'' calls allow for only 2 seconds of
disclosures.\12\
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\7\ Staff employs the methodology, assumptions, and studies it
has consistently used since their development for the 2003 TSR
amendments to determine, indirectly from external sales data and the
relative percentages of inbound and outbound calls, the number of
telemarketing calls and resulting number of sales because no call or
sales number totals are otherwise available. Staff relies on its own
prior estimates that of the $134.7 billion of sales from outbound
calls to consumers in 2012 (DMA 2013 Statistical Fact Book, at 5),
92.8% of those sales, or $125 billion, are subject to FTC
jurisdiction, with the average value of a sale being $85 and 20% of
outbound calls resulting in a sale.
\8\ For staff's PRA burden calculations, only direct sales
orders by telephone are relevant. That is, sales generated through
leads or customer traffic are excluded from these calculations
because such sales are not subject to the TSR's recordkeeping and
disclosure provisions. The direct sales transactions total of 450
million is based on an estimated 1.5 billion sales transactions from
outbound calls being subject to FTC jurisdiction reduced by an
estimated 30 percent attributable to direct orders. This percentage
estimate is derived from the only known available outside direct
sales data for telephone marketing to consumers. See DMA Statistical
Fact Book (2001), p. 301.
\9\ See, e.g., 60 FR 32,682, 32,683 (June 23, 1995); 63 FR
40,713, 40,714 (July 30, 1998); 66 FR 33,701, 33,702 (June 25,
2001); 71 FR 28,698, 28,700 (May 17, 2006); 74 FR 11,952, 11,955
(Mar. 20, 2009); 78 FR 19,483 19,485 (Apr. 1, 2013); 84 FR at 22,845
(May 20, 2019).
\10\ See, e.g., 71 FR 3302, 3304 (Jan. 20, 2006); 71 FR at
28,700; 78 FR at 19,485; 84 FR at 22,845.
\11\ Upselling is when a seller or telemarketer ``solicit[s] the
purchase of goods or services following an initial transaction
during a single telephone call.'' 16 CFR 310.2(hh).
\12\ See, e.g., 60 FR at 32,683; 78 FR at 19,485; 84 FR at
22,845.
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Staff bases all ensuing upsell calculations on the volume of
additional sales after an initial sale, with the assumption that a
consumer is unlikely to be predisposed to an upsell if he or she
rejects an initial offer--whether through an outbound or an inbound
call. Using industry information, staff assumes an upsell conversion
rate of 40% for inbound calls as well as outbound calls.\13\ Moreover,
staff assumes that consumers who agree to an upsell will not terminate
an upsell before the seller or telemarketer makes the full required
disclosures.
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\13\ This assumption originated with industry response to the
Commission's 2003 Final Amended TSR. See 68 FR 4580, 4597 n.183
(Jan. 29, 2003). Although the comment provided an estimate
specifically regarding inbound calls, FTC staff will continue to
apply this assumption to outbound calls as well, absent the receipt
of any information to the contrary.
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Based on the above, staff estimates that the total time associated
with these pre-sale disclosure requirements is 826,389 hours per year:
[(2.3 billion outbound calls x 40% lasting the duration x 7 seconds of
full pre-sale disclosures / 3,600 (conversion of minutes to hours) x
25% burden = 447,222 hours) + (2.3 billion outbound calls x 60%
terminated prematurely x 2 seconds of disclosures / 3,600 x 25% burden
= 191,667 hours) + (450 million outbound calls resulting in direct
sales x 40% upsell conversions x 3 seconds of related disclosures /
3,600 x 25% burden = 37,500 hours) + (1.8 billion inbound calls x 40%
upsell conversions x 3 seconds / 3,600 x 25% burden = 150,000 hours)] =
826,389 hours).
General Sales Disclosures
The TSR also requires several general sales disclosures in
telemarketing calls before the customer pays for goods or services.\14\
These disclosures, which FTC staff estimates takes eight seconds,
include the total costs of the offered goods or services, all material
restrictions, and all material terms and conditions of the seller's
refund, cancellation, exchange, or repurchase policies (if a
representation about such a policy is a part of the sales offer).
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\14\ 16 CFR 310.3(a)(1)(i)-(iii).
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Staff estimates that the general sales disclosures for
telemarketing calls require 351,680 hours annually. This figure
includes the burden for written disclosures (672 inbound telemarketing
entities estimated to use direct mail \15\ x
[[Page 23179]]
10 hours \16\ per year x 25% burden = 1,680), as well as oral
disclosures [(450 million outbound calls x 8 seconds / 3,600 x 25%
burden = 250,000 hours) + (450 million outbound calls x 40% upsell
attempts x 20% sales conversion x 8 seconds / 3,600 x 25% burden
=20,000 hours) + (1.8 billion inbound calls x 40% upsell attempts x 20%
sales conversion x 8 seconds / 3,600 x 25% burden = 80,000 hours)] =
351,680 hours.\17\
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\15\ Based on previous assumptions, staff estimates that of the
4,385 telemarketing entities, 2,015 conduct inbound telemarketing.
Consistent with its previous analyses, staff estimates that, of the
2,015 entities that conduct inbound telemarketing, approximately
one-third (672) will choose to incorporate written disclosures in
their direct mail solicitations. Because it is likely that industry
members make the requisite disclosures in direct mail solicitation
in an effort to qualify for a Rule exemption, Commission staff
believes it is appropriate to include those written disclosures in
the burden hour calculation.
\16\ FTC staff believes a typical firm will spend approximately
10 hours per year engaged in activities ensuring compliance with
this provision of the Rule; this, too, has been stated in prior FTC
notices inviting comment on PRA estimates. No comments were
received, and staff believes this estimate remains reasonable.
\17\ The percentage and unit of time measurements are FTC staff
estimates. (For more information regarding the 25% apportionment
appearing above see supra note 12 and surrounding text.)
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Disclosures for Debt Relief Services
To estimate the time required to provide the general sales
disclosures for calls offering debt relief services, staff employs
different assumptions and calculations.\18\ Employing that analysis, as
modified in response to a public comment to account for inbound debt
relief sales,\19\ staff continues to assume that outbound calls to sell
and inbound calls to buy debt relief services are made only to
consumers who are delinquent on one or more credit cards.\20\ Staff
further assumes that each such consumer will receive one outbound call
and place one inbound call for these services.
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\18\ 75 FR at 48,504-05.
\19\ Debt relief sales in outbound calls have always been
subject to the general sales disclosure requirements, and are
subsumed in the outbound general sales disclosure totals.
\20\ By extension, upsells on these initial calls would not be
applicable. Moreover, staff believes that few, if any, upsells on
initial outbound and inbound calls would be for debt relief.
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To estimate the number of consumers who are delinquent on one or
more credit cards, staff assumes that couples constitute a single
decision-making unit, as do single adults (widowed, divorced,
separated, never married) within each household. According to the most
current U.S. Census Bureau data available, there are 167,360,000
decision-making units.\21\ Of these, 120,833,920 have one or more
credit cards,\22\ and there are 2,984,598 decision-making units with at
least one delinquent credit card account.\23\
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\21\ U.S. Census Bureau, Income and Poverty in the United
States: 2020 (September 2021), Table A1, available at <a href="https://www.census.gov/library/publications/2021/demo/p60-273.html">https://www.census.gov/library/publications/2021/demo/p60-273.html</a>
reflecting 129,931,000 households in 2021); U.S. Census Bureau,
Sharing a Household: Household Composition and Economic Well Being:
2007-2010 (June 2012), Table 2, p. 4, available at <a href="https://www2.census.gov/library/publications/2012/demo/p60-242.pdf">https://www2.census.gov/library/publications/2012/demo/p60-242.pdf</a>
(reflecting 37,429,000 adults living with a householder who is
neither a spouse nor cohabiting partner in 2010 and includes adults
enrolled in school). Commission staff was unable to locate more
current data for the latter source.
\22\ The estimated number of consumers with one or more credit
cards is derived by multiplying the estimated decision making units
(167,360,000) by the percentage of consumers with one or more credit
cards: 72.2%. The percentage of consumers with one or more credit
card is based on a study conducted by the Federal Reserve Bank of
Boston. See Federal Reserve Bank of Boston, Consumer Payments
Research Center, The 2009 Survey of Consumer Payment Choice (April
2011), screen pp. 8, 48 available at <a href="http://www.bostonfed.org/economic/ppdp/2011/ppdp1101.pdf">www.bostonfed.org/economic/ppdp/2011/ppdp1101.pdf</a>. Commission staff have not found percentage
updates of a comparable nature. Later versions of such data differ
in how they present consumer adoption of payment instruments, e.g.,
combining, rather than presenting as separate percentages, consumer
purchases through credit and charge card use.
\23\ The estimated number of consumers with a delinquent account
is derived by multiplying the estimate of consumers with one or more
credit cards (120,833,920) by the delinquency rate for credit cards
(2.47%). Board of Governors of the Federal Reserve System, Charge
Off and Delinquency Rates on Loans and Leases at Commercial Banks,
available at <a href="https://www.federalreserve.gov/releases/chargeoff/delallsa.htm">https://www.federalreserve.gov/releases/chargeoff/delallsa.htm</a> (reporting a 2.47% delinquency rate for credit cards
for the second quarter of 2018).
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Accordingly, allowing for the above-stated FTC staff estimate of
eight seconds per general sales disclosures, staff estimates further
that the general sales disclosure burden for inbound debt relief calls
is 1,658 hours (2,984,598 inbound debt relief calls to decision-making
units with at least one delinquent credit card account x 8 seconds /
3,600 x 25% burden).
Disclosures for Non-Exempt Inbound Calls
The TSR general sales disclosures must also be made by sellers and
telemarketers for inbound calls in response to ads for investment
opportunities, certain business opportunities, credit card loss
protection (``CCLP''),\24\ credit repair,\25\ loss recovery
services,\26\ and advance fee loans.\27\
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\24\ 16 CFR 310.3(a)(1)(vi).
\25\ 16 CFR 310.4(a)(2).
\26\ 16 CFR 310.4(a)(3).
\27\ 16 CFR 310.4(a)(4).
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Staff's estimate for each of these types of non-exempt inbound
calls is determined by comparing the number of complaints reported to
the FTC's Consumer Sentinel system in the most recent complete year to
the total number of reported fraud complaints for that year. In 2021,
there were 2,789,161 fraud complaints.\28\ The resulting percentage of
total fraud complaints must be adjusted to reflect the fact that only a
relatively small percentage of telemarketing calls are fraudulent. To
extrapolate the percentage of fraudulent telemarketing calls, staff
divides a Congressional estimate of annual consumer injury from
telemarketing fraud ($40 billion) \29\ by available data on total
consumer and business-to-business telemarketing sales ($310.0 billion
projected for 2016),\30\ or 13%. The two percentages are then
multiplied together to determine the percentage of the 1.8 billion
annual inbound telemarketing calls represented by each type of fraud
complaint. That number is then rounded to the nearest ten.
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\28\ See FTC, Consumer Sentinel Network Data Book 2021 (February
2022) (``Sentinel Data'') at 9, available at <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/CSN%20Annual%20Data%20Book%202021%20Final%20PDF.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/CSN%20Annual%20Data%20Book%202021%20Final%20PDF.pdf</a>.
\29\ House Committee on Government Operations, The Scourge of
Telemarketing Fraud: What Can Be Done Against It, H.R. Rep. 421,
102nd Cong., 1st Sess. at 7 (Dec. 18, 1991). The FBI believes that
this estimate overstates telemarketing fraud losses as a result of
its investigations and closings of once massive telemarketing boiler
room operations. See FBI, A Byte Out of History: Turning the Tables
on Telemarketing Fraud (Dec. 8, 2010), available at <a href="https://www.fbi.gov/news/stories/2010/december/telemarketing_120810/telemarketing_120810">https://www.fbi.gov/news/stories/2010/december/telemarketing_120810/telemarketing_120810</a>. See also internet Crime Complaint Center, 2020
Annual Report on internet Crime (citing $4.1 billion of losses
claimed in consumer complaints for 2020), available at <a href="https://www.ic3.gov/Media/PDF/AnnualReport/2020_IC3Report.pdf">https://www.ic3.gov/Media/PDF/AnnualReport/2020_IC3Report.pdf</a>.
\30\ DMA 2013 Statistical Fact Book (January 2013) projection up
through 2016, p. 5 (no associated DMA updates made or otherwise
found thereafter).
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Thus, for the 4,678 Sentinel complaints in 2021 about investment
opportunities covered by the TSR,\31\ the general sales disclosure
burden is 870 hours (1.8 billion inbound calls x the percentage of
fraud complaints for investment opportunities (4,678/2,789,161) x the
percentage of telemarketing calls that are estimated to be fraudulent
(.13) x the length of the disclosures (8 seconds per disclosure) /
3,600 to convert to hours). Likewise, the burden for business
opportunity sales (23,274 complaints), including complaints for multi-
level marketing/pyramids/chain letters) \32\ is 4,340 hours
[[Page 23180]]
(1.8 billion x [23,274/2,789,161] x 0.13 x 8 seconds / 3,600); for
advance fee loan sales (20,540 complaints) \33\ is 3,830 hours (1.8
billion x [20,540/2,789,161] x 0.13 x 8 seconds / 3,600); for credit
repair sales (3,151 complaints) \34\ is 590 hours (1.8 billion x
[3,151/2,789,161] x 0.13 x 8 seconds / 3,600); 60 hours for loss
recovery services (339 complaints) \35\ (1.8 billion x [339/2,789,161]
x 0.13 x 8 seconds / 3,600); and 20 hours for CCLP sales (124
complaints) \36\ (1.8 billion x [124/2,789,161] x .13 x 8 seconds /
3,600). The exceptions to the TSR's inbound call exemptions add an
additional 9,710 hours to the general sales disclosure burden.
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\31\ See FTC, Consumer Sentinel Network Data Book 2021 (February
2022) (``Sentinel Data''), Appendix B3, p. 86, available at <a href="https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2020/csn_annual_data_book_2020.pdf">https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2020/csn_annual_data_book_2020.pdf</a>. The figure
above tallies the number of complaints under the subcategories
``Advice, Seminars'' and ``Art\Gems\Rare Coins.'' The remaining
subcategories under the ``Investment Related'' category are not
covered by either the FTC Act or the TSR.
\32\ Sentinel Data at 85. While this total excludes
``Franchises/Distributorships'' covered by the Franchise Rule and
thus not subject to the TSR, the data cannot additionally be
segregated to omit ``Work-At-Home'' opportunities now covered by the
Business Opportunity Rule and thus also not subject to the TSR.
Staff therefore believes this total significantly overstates the
opportunities subject to the TSR.
\33\ Id.
\34\ Id.
\35\ Id.
\36\ Id.
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Altogether, the general sales disclosure burden is 363,048 hours
(351,680 hours for outbound sales + 1,658 hours for debt relief inbound
sales + 9,710 hours for non-exempt inbound sales).
Specific Transaction Disclosures
Additional specific disclosures are required if the call involves a
prize promotion,\37\ the sale of credit card loss protection
products,\38\ an offer with a negative option feature,\39\ or the sale
of a debt relief service.\40\ Staff estimates that the specific sales
disclosures other than for debt relief services will require 22,363
hours annually [(450 million direct sales transactions from outbound
calls x 5% [estimate of percentage of sales transactions involving
prize promotions] x 3 seconds / 3,600 x 25% burden = 4,688 hours) +
(450 million direct sales transactions from outbound calls x 0.1%
[estimate of percentage of sales transactions involving CCLP] x 4
seconds / 3,600 x 25% burden = 125 hours) + (450 million sales
transactions from outbound calls x 40% attempted upsell conversions x
20% sales conversions x 0.1% [estimate of percentage of outbound calls
involving CCLP upsells] x 4 seconds x 25% burden / 3,600 = 10 hours) +
(1.8 billion inbound calls x 40% attempted upsell conversions x 20%
sales conversions x 0.1% [estimate of percentage of inbound calls
involving CCLP upsells] x 4 seconds x 25% burden / 3,600 = 40 hours) +
(450 million sales transactions from outbound calls x 10% [estimate of
percentage of outbound calls involving negative options] x 4 seconds /
3,600 x 25% burden = 12,500 hours) + (450 million sales transactions
from outbound calls x 40% attempted upsell conversions x 20% sales
conversions x 10% [estimate of percentage of outbound calls involving
negative option upsells] x 4 seconds x 25% burden / 3,600 = 1,000
hours) + (1.8 billion inbound calls x 40% attempted upsell conversions
x 20% sales conversions x 10% [estimate of percentage of inbound calls
involving negative option upsells] x 4 seconds / 3,600 x 25% burden =
4,000 hours).
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\37\ 16 CFR 310.3(a)(1)(iv)-(v).
\38\ 16 CFR 310.3(a)(1)(vi). It is neither staff's understanding
nor belief that CCLP sales occur through inbound calls. Staff
anticipates, however, the potential for such sales in an upsell
following an inbound call.
\39\ 16 CFR 310.3(a)(1)(vii).
\40\ 16 CFR 310.3(a)(1)(viii).
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Staff estimates that reciting the specific sales disclosures in
each debt relief sales call will take ten seconds, and therefore the
disclosure burden associated with the debt relief disclosures is 4,146
hours (2,984,598 outbound debt relief calls x 10 seconds / 3,600 x 25%
burden = 2,073 hours) + (2,984,598 inbound debt relief calls x 10
seconds / 3,600 x 25% burden = 2,073 hours). Thus, the total specific
transaction disclosure burden is 26,509 hours annually (22,363 for non-
debt-relief calls) + 4,146 (for debt relief calls).
Cumulatively, therefore, the total annual burden for all of the
disclosures is 1,215,946 (826,389 hours pre-sales disclosures + 363,048
hours general sales disclosures + 26,509 hours specific sales
disclosures).
(c) Reporting Hours
Finally, any entity that accesses the Registry must submit minimal
identifying information to the operator of the Registry. This basic
information includes the name, address, and telephone number of the
entity; a contact person for the organization; and information about
the manner of payment. The entity also must submit a list of the area
codes for which it requests information and certify that it is
accessing the Registry solely to comply with the provisions of the TSR.
If the entity is accessing the Registry on behalf of other seller or
telemarketer clients, it has to submit basic identifying information
about those clients, a list of the area codes for which it requests
information on their behalf, and a certification that the clients are
accessing the Registry solely to comply with the TSR.
As it has since the Commission's initial proposal to implement user
fees under the TSR, FTC staff estimates that affected entities will
require no more than two minutes for each entity to submit this basic
information, and anticipates that each entity will have to submit the
information annually.\41\ Based on the number of entities accessing the
Registry that are subject to the TSR, this requirement will result in
146 burden hours (4,385 entities x 2 minutes per entity). In addition,
FTC staff continues to estimate that up to one-half of those entities
may need, during the course of their annual period, to submit their
basic identifying information more than once in order to obtain
additional area codes of data. Thus, this would result in an additional
73 burden hours. Accordingly, accessing the Registry will impose a
total burden of approximately 219 hours per year.
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\41\ See 67 FR 37366 (May 29, 2002). The two-minute estimate
likely is conservative. The OMB regulation defining ``information''
under the PRA generally excludes disclosures that require persons to
provide facts necessary simply to identify themselves, e.g., the
respondent, the respondent's address, and a description of the
information the respondent seeks in detail sufficient to facilitate
the request. See 5 CFR 1320.3(h)(1).
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Thus, total recordkeeping, disclosure, and reporting burden is
1,228,050 hours (11,885 hours + 1,215,946 hours + 219 hours).
Estimated Annual Labor Cost: $18,367,441
(a) Recordkeeping Labor Cost
As indicated above, staff estimates that existing telemarketing
entities require 11,885 hours, cumulatively, to maintain compliance
with the TSR's recordkeeping provisions. Applying a clerical wage rate
of $18.75/hour,\42\ recordkeeping maintenance for existing
telemarketing entities would amount to an annual cost of approximately
$222,844. Assuming also from the above a cumulative burden of 7,500
hours for 75 new telemarketing entities per year to set up compliant
recordkeeping systems (75 new entrants/year x 100 hours each), and
applying to that a skilled labor rate of $29.11/hour,\43\ cumulative
labor costs for them would approximate $218,325 yearly. Thus, the
estimated labor cost for recordkeeping associated with the TSR for both
new and existing telemarketing entities, including prerecorded and debt
relief calls, is $441,169.
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\42\ This figure is derived from the mean hourly wage shown for
Office Clerks, General. See ``Occupational Employment and Wages--May
2021,'' U.S. Department of Labor, released March 2022, Table 1
(``National employment and wage data from the Occupational
Employment Statistics survey by occupation, May 2021''), available
at <a href="https://www.bls.gov/news.release/ocwage.t01.htm">https://www.bls.gov/news.release/ocwage.t01.htm</a>.
\43\ This figure is derived from the mean hourly wage shown for
``Computer Support Specialist.'' See id.
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[[Page 23181]]
(b) Disclosure Labor Cost
The estimated annual labor cost for disclosures for all
telemarketing entities is $17,923,044. This total is the product of
applying an assumed hourly wage rate of $14.74 \44\ to the earlier
stated estimate of 1,215,946 hours pertaining to the pre-sale, general
and specific disclosures.
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\44\ This figure is derived from the mean hourly wage shown for
Telemarketers. See supra note 42. It is applied additionally to the
ensuing calculation of reporting labor cost regarding the Registry
operator.
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(c) Reporting Labor Cost
Estimated labor cost supplying basic identifying information to the
Registry operator is $3,228 (219 hours x $14.74 per hour).
Thus, cumulatively for both new and existing telemarketing entities
total labor costs are $18,367,441 [($441,169 recordkeeping) +
($17,923,044 disclosure) + ($3,228 reporting)].
Estimated Annual Non-Labor Cost: $4,642,347
(a) Recordkeeping
Staff believes that the capital and start-up costs associated with
the TSR's recordkeeping provisions are de minimis. Although staff
believes that most affected entities would maintain the required
records in the ordinary course of business, consistent with its prior
analyses, staff estimates that the estimated 4,835 telemarketing
entities subject to the Rule continue to spend an annual amount of $50
each on office supplies as a result of the Rule's recordkeeping
requirements, for a total recordkeeping cost burden of $241,750.
(b) Disclosure
Applying the disclosure estimates of 1,215,946 hours to an
estimated commercial calling rate of 6 cents per minute ($3.60 per
hour), staff estimates a total of $4,377,406 in telephone charges.\45\
Thus, total capital and/or other non-labor costs are $4,619,156
($241,750 (office supplies)) + $4,377,406 (telephone charges)).
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\45\ Staff believes that other non-labor costs would be incurred
largely by affected entities in the ordinary course of business and,
beyond that, would not materially exceed those ordinary costs.
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Request for Comments
Pursuant to Section 3506(c)(2)(A) of the PRA, the FTC invites
comments on: (1) Whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility; (2) the
accuracy of the agency's estimate of the burden of the proposed
collection of information, including the validity of the methodology
and assumptions used; (3) ways to enhance the quality, utility, and
clarity of the information to be collected; and (4) ways to minimize
the burden of maintaining records and providing disclosures to
consumers. All comments must be received on or before June 21, 2022.
You can file a comment online or on paper. For the FTC to consider
your comment, we must receive it on or before June 21, 2022. Write
``Telemarketing Sales Rule; PRA Comment: FTC File No. P072108'' on your
comment. Your comment--including your name and your state--will be
placed on the public record of this proceeding, including the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website.
Due to the public health emergency in response to the COVID-19
outbreak and the agency's heightened security screening, postal mail
addressed to the Commission will be subject to delay. We encourage you
to submit your comments online through the <a href="https://www.regulations.gov">https://www.regulations.gov</a>
website.
If you prefer to file your comment on paper, write ``Telemarketing
Sales Rule; PRA Comment: FTC File No. P072108'' on your comment and on
the envelope, and mail your comment to the following address: Federal
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW,
Suite CC-5610 (Annex J), Washington, DC 20580; or deliver your comment
to the following address: Federal Trade Commission, Office of the
Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite
5610 (Annex J), Washington, DC 20024. If possible, submit your paper
comment to the Commission by courier or overnight service.
Because your comment will become publicly available at <a href="https://www.regulations.gov">https://www.regulations.gov</a>, you are solely responsible for making sure that
your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else's Social
Security number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure that your comment does not include
any sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . . is privileged or confidential'' --as provided
by Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule
4.10(a)(2), 16 CFR 4.10(a)(2)--including in particular competitively
sensitive information such as costs, sales statistics, inventories,
formulas, patterns, devices, manufacturing processes, or customer
names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request, and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted publicly at <a href="http://www.regulations.gov">www.regulations.gov</a>, we cannot redact or remove
your comment unless you submit a confidentiality request that meets the
requirements for such treatment under FTC Rule 4.9(c), and the General
Counsel grants that request.
The FTC Act and other laws that the Commission administers permit
the collection of public comments to consider and use in this
proceeding, as appropriate. The Commission will consider all timely and
responsive public comments that it receives on or before June 21, 2022.
For information on the Commission's privacy policy, including routine
uses permitted by the Privacy Act, see <a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
Josephine Liu,
Assistant General Counsel for Legal Counsel.
[FR Doc. 2022-08330 Filed 4-18-22; 8:45 am]
BILLING CODE 6750-01-P
</pre></body>
</html>Indexed from Federal Register on April 19, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.