Rule2024-28399
Telemarketing Sales Rule
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 10, 2024
Effective
January 9, 2025
Issuing agencies
Federal Trade Commission
Abstract
The Federal Trade Commission ("FTC" or "Commission") adopts amendments to the Telemarketing Sales Rule ("TSR" or "Rule") that extend the Rule's applicability to inbound telemarketing calls in response to an advertisement through any medium or direct mail solicitation in which technical support products or services are offered for sale.
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<title>Federal Register, Volume 89 Issue 237 (Tuesday, December 10, 2024)</title>
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[Federal Register Volume 89, Number 237 (Tuesday, December 10, 2024)]
[Rules and Regulations]
[Pages 99069-99076]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-28399]
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FEDERAL TRADE COMMISSION
16 CFR Part 310
RIN 3084-AB19
Telemarketing Sales Rule
AGENCY: Federal Trade Commission.
ACTION: Final rule.
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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'')
adopts amendments to the Telemarketing Sales Rule (``TSR'' or ``Rule'')
that extend the Rule's applicability to inbound telemarketing calls in
response to an advertisement through any medium or direct mail
solicitation in which technical support products or services are
offered for sale.
DATES: The amendments are effective January 9, 2025.
ADDRESSES: Relevant portions of the record of this proceeding,
including this document, are available at <a href="https://www.ftc.gov">https://www.ftc.gov</a>.
FOR FURTHER INFORMATION CONTACT: Benjamin R. Davidson, (202) 326-3055,
<a href="/cdn-cgi/l/email-protection#7d1f191c0b14190e12133d1b091e531a120b"><span class="__cf_email__" data-cfemail="c3a1a7a2b5aaa7b0acad83a5b7a0eda4acb5">[email protected]</span></a>, or Patricia Hsue, (202) 326-3132, <a href="/cdn-cgi/l/email-protection#65150d161000250311064b020a13"><span class="__cf_email__" data-cfemail="98e8f0ebedfdd8feecfbb6fff7ee">[email protected]</span></a>,
Division of Marketing Practices, Bureau of Consumer Protection, Federal
Trade Commission, 600 Pennsylvania Avenue NW, Mail Stop CC-6316,
Washington, DC 20580.
SUPPLEMENTARY INFORMATION: This document states the basis and purpose
for the Commission's decision to adopt amendments to the TSR that were
proposed and published for public comment in the Federal Register on
April 16, 2024, in a notice of proposed rulemaking (``2024 NPRM'').\1\
The Commission has carefully reviewed and considered the entire record
on the issues presented in this rulemaking proceeding. The record
includes 25 public comments submitted by a variety of interested
parties, none of which opposed the issuance of a final rule amending
the TSR to cover technical support calls made by consumers in response
to solicitations. The Commission has decided to adopt, with one
modification, the proposed amendments to the TSR that are intended to
address consumer injury from deceptive technical support scams.
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\1\ 89 FR 26798 (Apr. 16, 2024). This document also concludes
the ongoing Regulatory Review.
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I. Background
Congress enacted the Telemarketing and Consumer Fraud and Abuse
Prevention Act (``Telemarketing Act'' or ``Act'') in 1994 to curb
abusive telemarketing practices and provide key anti-fraud and privacy
protections to consumers.\2\ The Act directed the Commission to adopt a
rule prohibiting deceptive or abusive telemarketing practices.\3\
Pursuant to the Act, the Commission promulgated the TSR on August 23,
1995.\4\
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\2\ Public Law 103-297, 108 Stat. 1545 (1997) (codified as
amended at 15 U.S.C. 6101-6108).
\3\ 15 U.S.C. 6102(a)(1).
\4\ See Statement of Basis and Purpose and Final Rule
(``Original TSR''), 60 FR 43842 (Aug. 23, 1995).
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The Rule prohibits deceptive or abusive telemarketing practices,
such as misrepresenting several categories of material information or
making false or misleading statements to induce a person to pay for a
good or service.\5\ The Rule also requires sellers and telemarketers to
make specific disclosures and keep certain records of their
telemarketing activities.\6\
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\5\ See, e.g., 16 CFR 310.3(a); see also Original TSR, 60 FR
43848-51.
\6\ See, e.g., 16 CFR 310.3(a)(1), 310.5; see also Original TSR,
60 FR 43846-48, 43851, 43857.
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Since 1995, the Commission has amended the Rule on five occasions:
(1) in 2003 to create the National Do Not Call (``DNC'') Registry and
extend the Rule to telemarketing calls soliciting charitable
contributions (``charity calls''); \7\ (2) in 2008 to prohibit
prerecorded messages (``robocalls'') in sales calls and charity calls;
\8\ (3) in 2010 to ban the telemarketing of debt relief services
requiring an advance fee; \9\ (4) in 2015 to bar the use in
telemarketing of certain payment mechanisms widely used in fraudulent
transactions; \10\ and (5) in 2024 to modify the Rule's recordkeeping
requirements and prohibit deception in calls between businesses.\11\
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\7\ See Statement of Basis and Purpose and Final Amended Rule
(``2003 TSR Amendments''), 68 FR 4580 (Jan. 29, 2003) (adding Do Not
Call Registry, charitable solicitations, and other provisions). The
Telemarketing Act was amended in 2001 to extend its coverage to
telemarketing calls seeking charitable contributions. See Uniting
and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act (``USA PATRIOT Act''), Public
Law 107-56, 115 Stat. 272 (Oct. 26, 2001) (adding charitable
contribution to the definition of telemarketing and amending the Act
to require certain disclosures in calls seeking charitable
contributions).
\8\ See Statement of Basis and Purpose and Final Rule Amendments
(``2008 TSR Amendments''), 73 FR 51164 (Aug. 29, 2008) (addressing
the use of robocalls).
\9\ See Statement of Basis and Purpose and Final Rule Amendments
(``2010 TSR Amendments''), 75 FR 48458 (Aug. 10, 2010) (adding debt
relief provisions, including a prohibition on misrepresenting
material aspects of debt relief services in Sec. 310.3(a)(2)(x)).
The Commission subsequently published technical corrections to Sec.
310.4 of the TSR. 76 FR 58716 (Sept. 22, 2011).
\10\ See Statement of Basis and Purpose and Final Rule
Amendments (``2015 TSR Amendments''), 80 FR 77520 (Dec. 14, 2015)
(prohibiting the use of remotely created checks and payment orders,
cash-to-cash money transfers, and cash reload mechanisms).
\11\ See Statement of Basis and Purpose and Final Rule
Amendments (``2024 Amendments''), 89 FR 26760 (Apr. 16, 2024).
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II. Overview of the Proposed Amendments to the TSR
The Rule exempts from its coverage certain calls that consumers
make to telemarketers, known as inbound calls.\12\ The Rule generally
exempts inbound calls that are: (1) not the result of any solicitation,
(2) in response to certain advertisements, and (3) in response to a
direct mail solicitation that contains certain information.\13\
However, the exemptions for inbound calls contain exclusions for
certain types of calls that are often deceptive, such as inbound calls
relating to investment opportunities, debt relief services, and prize
promotions.\14\ In the 2024 NPRM, the Commission proposed covering
inbound telemarketing of technical support services (or tech support)
in the Rule (i.e., adding it to the exclusions identified in Sec.
310.6(b)(5) and (6)) because of the harm associated with telemarketing
these products and services.\15\
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\12\ See 16 CFR 310.6(b)(4) through (6).
\13\ Id.
\14\ Id.
\15\ 2024 NPRM, 89 FR 26798.
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A. Tech Support
Tech support scams consistently generate large numbers of consumer
complaints.\16\ The scams can begin in a variety of ways. Sometimes the
scammer places an outbound call to consumers warning them that their
computers have been infected.\17\ Other scammers use deceptive computer
pop-up messages that claim the consumer's computer has a problem and
direct the consumer to call a phone number to fix the errors.\18\ Still
other scammers place advertisements with search engines that appear
when consumers search for their computer company's tech support
telephone number.\19\ And sometimes,
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scammers pay computer security software companies so that when
consumers call to activate their service, they reach the scammer and
are pitched additional and unnecessary products and services.\20\ Once
consumers connect with the scammer, whether through outbound
telemarketing or inbound telemarketing, the scammers deceive consumers
about a variety of problems with their computers and persuade consumers
to purchase subscription tech support services or software that they do
not need.\21\
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\16\ See FTC Consumer Sentinel Network Databook 2023 at 87,
available at <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/CSN-Annual-Data-Book-2023.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/CSN-Annual-Data-Book-2023.pdf</a> (last visited Sept. 5, 2024).
\17\ See, e.g., Prepared Statement of the Federal Trade
Commission Before the United States Senate Special Committee on
Aging on Combatting Technical Support Scams (``Tech Support
Testimony''), at 3-5 (Oct. 21, 2015), available at <a href="https://www.ftc.gov/system/files/documents/public_statements/826561/151021techsupporttestimony.pdf">https://www.ftc.gov/system/files/documents/public_statements/826561/151021techsupporttestimony.pdf</a> (last visited Sept. 5, 2024).
\18\ Id.
\19\ Id; see also Complaint, FTC v. Click4Support, LLC, No. 15-
cv-05777-SD, at 9-10 (E.D. Pa. Oct. 26, 2015), available at <a href="https://www.ftc.gov/system/files/documents/cases/151113click4supportcmpt.pdf">https://www.ftc.gov/system/files/documents/cases/151113click4supportcmpt.pdf</a>
(last visited Sept. 5, 2024) (``Click4Support'').
\20\ See Complaint, FTC v. Inbound Call Experts, No. 9:14-cv-
81935 (S.D. Fla. Nov. 19, 2014), available at <a href="https://www.ftc.gov/system/files/documents/cases/141119icecmpt.pdf">https://www.ftc.gov/system/files/documents/cases/141119icecmpt.pdf</a> (last visited Sept.
5, 2024) (``Inbound Call Experts'').
\21\ Tech Support Testimony at 3.
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Although tech support scams have typically targeted consumers
looking for help with computers, tech support scams also target
consumers looking for help with other electronic devices, such as
cellular phones and smart home devices. News stories report on
consumers encountering tech support scams when they search for help
with their iPhones,\22\ receive pop-up messages on their iPads,\23\ or
look for support for their Kindle tablets.\24\ In August 2022, Amazon
filed a lawsuit alleging that a deceptive tech support operation
targeted consumers who were seeking help with their smart home
doorbells and streaming video services.\25\
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\22\ ``Woman loses $1,500 to fake Apple Customer Service Scam,''
WCPO ABC 9, Cincinnati, (May 20, 2022), available at <a href="https://www.wcpo.com/money/consumer/dont-waste-your-money/woman-loses-1-500-to-fake-apple-customer-service-scam">https://www.wcpo.com/money/consumer/dont-waste-your-money/woman-loses-1-500-to-fake-apple-customer-service-scam</a> (last visited Sept. 5, 2024).
\23\ ``Computer scam costs 2 older Pittsburgh women thousands of
dollars, police warn,'' CBS News, Pittsburgh (Feb. 20, 2024)
available at <a href="https://www.cbsnews.com/pittsburgh/news/pittsburgh-scam-tech-support-bitcoin-older-residents-targeted">https://www.cbsnews.com/pittsburgh/news/pittsburgh-scam-tech-support-bitcoin-older-residents-targeted</a> (last visited
Sept. 5, 2024).
\24\ ``Don't get Scammed by Fake Amazon Kindle and Fire Tablet
Support Sites'' (Feb. 22, 2016), available at <a href="https://blog.the-ebook-reader.com/2016/02/22/dont-get-scammed-by-fake-amazon-kindle-and-fire-tablet-support-sites/">https://blog.the-ebook-reader.com/2016/02/22/dont-get-scammed-by-fake-amazon-kindle-and-fire-tablet-support-sites/</a> (last visited Sept. 5, 2024).
\25\ <a href="http://Amazon.com">Amazon.com</a>, Inc. v. Pionera, Inc., No. 2:22-cv-1491 (E.D.
Cal. Aug. 23, 2022).
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Consumer complaints about tech support scams have increased
dramatically over the last few years, ranging from approximately 40,000
complaints in 2017 to more than 90,000 complaints in 2023.\26\ In 2023,
consumers reported losing approximately $242 million to these scams,
with a median loss of $1,400.\27\
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\26\ FTC Consumer Sentinel Network Databook 2023 at 87.
\27\ See <a href="https://public.tableau.com/app/profile/federal.trade.commission/viz/shared/GW63DJFGP">https://public.tableau.com/app/profile/federal.trade.commission/viz/shared/GW63DJFGP</a> (last visited Sept. 5,
2024).
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Moreover, tech support scams disproportionately harm older
consumers. In 2023, consumers 60 years of age and older were six times
more likely to report a financial loss to tech support scams compared
to younger consumers.\28\ Analysis of consumer fraud reports confirm
that a disproportionate number of older consumers have reported losing
money to tech support scams. From 2015 to 2018, older consumers filed
more reports on tech support scams than on any other fraud
category.\29\
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\28\ See 2023 Protecting Older Consumers Report at 29, available
at <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/p144400olderadultsreportoct2023.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/p144400olderadultsreportoct2023.pdf</a> (last visited Sept. 5, 2024). In
2022, older consumers were five times as likely to report a
financial loss to tech support scams. See 2022 Protecting Oder
Consumers Report at 31, available at <a href="https://www.ftc.gov/reports/protecting-older-consumers-2021-2022-report-federal-trade-commission">https://www.ftc.gov/reports/protecting-older-consumers-2021-2022-report-federal-trade-commission</a>
(last visited Sept. 5, 2024). In 2020, older consumers were six
times as likely to report a financial loss to tech support scams as
compared to younger consumers.
\29\ Data Spotlight, Older adults hit hardest by tech support
scams (March 7, 2019), available at <a href="https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2019/03/older-adults-hardest-hit-tech-support-scams">https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2019/03/older-adults-hardest-hit-tech-support-scams</a> (last visited Oct. 17, 2024); see also FTC Report
to Congress, Protecting Older Consumers, 2018-2019 (``2019
Protecting Older Consumers Report'') at 5 (Oct. 18, 2019), available
at <a href="https://www.ftc.gov/reports/protecting-older-consumers-2018-2019-report-federal-trade-commission">https://www.ftc.gov/reports/protecting-older-consumers-2018-2019-report-federal-trade-commission</a> (last visited Sept. 5, 2024). In
2021, reports of online shopping frauds and business imposter frauds
were the top fraud complaint for older consumers, with tech support
scams dropping to third. 2022 Protecting Older Consumers Report, at
31. Older consumers, however, are disproportionately more likely to
lose money to tech support scams. Id.
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The Commission has responded to tech support scams through consumer
education and law enforcement actions. For consumer education, the
Commission has issued guidance to consumers including ``New tech
support scammers want your life savings,'' \30\ ``How to Spot, Avoid,
and Report Tech Support Scams,'' \31\ and ``Keep tech support strangers
out of your computer.'' \32\ The Commission has also responded to
particular tech support campaigns with consumer education such as
``Fake Calls from Apple and Amazon Support: What you need to know,''
\33\ ``No gift cards for tech support scammers,'' \34\ and ``FTC asking
for access to your computer? It's a scam.'' \35\ Other government
agencies and consumer organizations have also issued guidance on tech
support scams.\36\
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\30\ ``New tech support scammers want your life savings'' (Mar.
7, 2024), available at <a href="https://consumer.ftc.gov/consumer-alerts/2024/03/new-tech-support-scammers-want-your-life-savings">https://consumer.ftc.gov/consumer-alerts/2024/03/new-tech-support-scammers-want-your-life-savings</a> (last
visited Sept. 5, 2024).
\31\ ``How to Spot, Avoid, and Report Tech Support Scams''
(Sept. 6, 2022), available at <a href="https://consumer.ftc.gov/articles/how-spot-avoid-and-report-tech-support-scams">https://consumer.ftc.gov/articles/how-spot-avoid-and-report-tech-support-scams</a> (last visited Sept. 5,
2024).
\32\ ``Keep tech support strangers out of your computer'' (Mar.
7, 2019), available at <a href="https://consumer.ftc.gov/consumer-alerts/2019/03/keep-tech-support-strangers-out-your-computer">https://consumer.ftc.gov/consumer-alerts/2019/03/keep-tech-support-strangers-out-your-computer</a> (last visited
Sept. 5, 2024).
\33\ ``Fake Calls from Apple and Amazon Support: What you need
to know'' (Dec. 3, 2020), available at <a href="https://consumer.ftc.gov/consumer-alerts/2020/12/fake-calls-apple-and-amazon-support-what-you-need-know">https://consumer.ftc.gov/consumer-alerts/2020/12/fake-calls-apple-and-amazon-support-what-you-need-know</a> (last visited Sept. 5, 2024).
\34\ ``No gift cards for tech support scammers'' (June 6, 2018),
available at <a href="https://consumer.ftc.gov/consumer-alerts/2018/06/no-gift-cards-tech-support-scammers">https://consumer.ftc.gov/consumer-alerts/2018/06/no-gift-cards-tech-support-scammers</a> (last visited Sept. 5, 2024).
\35\ ``FTC asking for access to your computer? It's a scam''
(Apr. 6, 2018), available at <a href="https://consumer.ftc.gov/consumer-alerts/2018/04/ftc-asking-access-your-computer-its-scam">https://consumer.ftc.gov/consumer-alerts/2018/04/ftc-asking-access-your-computer-its-scam</a> (last
visited Sept. 5, 2024).
\36\ See, e.g., AARP, ``How to Get Good Tech Support'' (Jan. 3,
2022), available at <a href="https://www.aarp.org/home-family/personal-technology/info-2021/tips-for-getting-tech-support.html">https://www.aarp.org/home-family/personal-technology/info-2021/tips-for-getting-tech-support.html</a> (last
visited June 23, 2023); Consumer Financial Protection Bureau, ``What
you should do about tech support scams'' (Jan. 21, 2021), available
at <a href="https://www.consumerfinance.gov/about-us/blog/what-you-should-know-about-tech-support-scams/">https://www.consumerfinance.gov/about-us/blog/what-you-should-know-about-tech-support-scams/</a> (last visited Sept. 5, 2024).
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In addition to consumer education, the Commission and other State
and Federal law enforcement partners have brought a multitude of
actions against tech support scammers. For example, on May 12, 2017,
the Commission announced ``Operation Tech Trap'' which consisted of 29
law enforcement actions brought by the Commission and other law
enforcement agencies against tech support schemes.\37\ On March 7,
2019, the Department of Justice announced the largest-ever elder fraud
sweep, which focused on tech-support scams and involved actions against
``more than 260 defendants from around the globe who victimized more
than two million Americans.'' \38\ In addition, the Commission has
filed numerous tech support cases outside the scope of such coordinated
law enforcement sweeps.\39\
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\37\ Press Release, FTC and Federal, State and International
Partners Announce Major Crackdown on Tech Support Scams (May 12,
2017), available at <a href="https://www.ftc.gov/news-events/press-releases/2017/05/ftc-federal-state-international-partners-announce-major-crackdown">https://www.ftc.gov/news-events/press-releases/2017/05/ftc-federal-state-international-partners-announce-major-crackdown</a> (last visited Sept. 5, 2024).
\38\ Press Release, Justice Department Coordinates Largest-Ever
Nationwide Elder Fraud Sweep (Mar. 7, 2019), available at <a href="https://www.justice.gov/opa/pr/justice-department-coordinates-largest-ever-nationwide-elder-fraud-sweep-0">https://www.justice.gov/opa/pr/justice-department-coordinates-largest-ever-nationwide-elder-fraud-sweep-0</a> (last visited Sept. 5, 2024).
\39\ See, e.g., FTC v. Restoro Cyprus Ltd., No. 1:24-cv-754
(D.D.C. Mar. 14, 2024) (complaint alleging that tech support
scammers took tens of millions of dollars from consumers through
pop-ups and internet ads), available at <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/1-ComplaintagainstRestoro.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/1-ComplaintagainstRestoro.pdf</a> (last visited Sept.
5, 2024); United States v. Nexway SASU, No. 1:23-cv-900 (D.D.C. Apr.
3, 2023) (complaint alleging that Nexway provided payment processing
services for several deceptive tech support operations), available
at <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/nexway-complaint.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/nexway-complaint.pdf</a>
(last visited Sept. 5, 2024); FTC v. RevenueWire, Inc., No. 1:20-cv-
1032 (D.D.C. April 21, 2020) (complaint alleging that companies to
which RevenueWire provided payment processing services used pop-up
dialog boxes that claimed to have detected computer infections and
directed consumers to call a 1-800 number), available at <a href="https://www.ftc.gov/system/files/documents/cases/revcomp3.pdf">https://www.ftc.gov/system/files/documents/cases/revcomp3.pdf</a> (last visited
Sept. 5, 2024); FTC v. Boost Software, Inc., No. 14-cv-81397 (S.D.
Fla. Nov. 10, 2014), available at <a href="https://www.ftc.gov/system/files/documents/cases/141119vastboostcmpt.pdf">https://www.ftc.gov/system/files/documents/cases/141119vastboostcmpt.pdf</a> (last visited Sept. 5,
2024); Click4Support; Inbound Call Experts.
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While the Commission has sued tech support scams for engaging in
deceptive practices under the TSR where applicable, the Commission has
also brought cases under the FTC Act alone if the telemarketer's
practices could arguably fall within an exemption to the TSR. In FTC v.
PCCare247, for example, the Commission used the FTC Act to seek
monetary relief from a tech support operation that placed deceptive
online advertisements to induce consumers to place inbound calls.\40\
The calls at issue in PCCare 247 may have fallen outside of the Rule to
the extent they were telephone calls initiated by a consumer in
response to an advertisement.\41\ Similarly, in FTC v. Vylah Tec LLC,
the Commission used the FTC Act to seek monetary relief from a tech
support operation that lured consumers by placing deceptive pop-up
messages warning consumers that their computers had been infected with
viruses.\42\ The calls at issue in Vylah Tec may have fallen outside
the Rule if a court were to have determined that pop-up messages are a
form of advertisement or a direct mail solicitation under the Rule.\43\
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\40\ Complaint, FTC v. PCCare247, Inc., No. 12-cv-7189 (S.D.N.Y.
Oct. 3, 2012) (``PCCare247''), available at <a href="https://www.ftc.gov/sites/default/files/documents/cases/2012/10/121003pccarecmpt.pdf">https://www.ftc.gov/sites/default/files/documents/cases/2012/10/121003pccarecmpt.pdf</a>
(last visited Sept. 5, 2024) (``PCCare247'').
\41\ See 16 CFR 310.6(b)(5). Even if the consumer's call was in
response to an advertisement, the Rule would apply to instances of
upselling included in the call. Id. at Sec. 310.6(b)(5)(iii). If,
for example, the consumer initiated a call for technical support
with their computer and the consumer was pitched additional software
products or computer services, that transaction would likely be an
upsell under the Rule.
\42\ See Complaint, FTC v. Vylah Tec LLC, No. 17-cv-228-FtM-
99MRM (M.D. Fla. May 17, 2017) (``Vylah Tec''), available at <a href="https://www.ftc.gov/system/files/documents/cases/162_3253_vylah_tec_llc_complant.pdf">https://www.ftc.gov/system/files/documents/cases/162_3253_vylah_tec_llc_complant.pdf</a> (last visited Sept. 5, 2024).
\43\ In an abundance of caution, the Commission pursued its
claim regarding the pop-ups under section 5 of the FTC Act, 15
U.S.C. 45. The Commission, however, does not believe such pop-up
messages are exempt under the Rule. The exemption in Sec.
310.6(b)(5) ``applies to calls in response to television
commercials, infomercials, home shopping programs, magazine and
newspaper advertisements, and other forms of mass media advertising
solicitation. . . . In the Commission's experience, calls responding
to general media advertising do not typically involve the forms of
deception and abuse the Act seeks to stem.'' 60 FR 43860. The
Commission also generally has not observed pop-up messages that
contained the disclosures necessary to fall within the exemption for
direct mail solicitations.
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Prior to April 2021, the Commission routinely relied upon section
13(b) of the FTC Act, 15 U.S.C. 53(b), to obtain monetary relief for
consumers injured by conduct that fell outside the scope of the Rule,
such as the conduct described in the preceding paragraph. The Supreme
Court's decision in AMG Capital Management, LLC v. FTC, held the
Commission could not obtain monetary relief under section 13(b).\44\ As
a result, the Commission is now constrained in its ability to redress
consumers harmed by tech support scams whose deceptive business
practices arguably fall beyond the reach of the Rule. Amending the
Rule, by adding tech support services to the list of exclusions from
the inbound call exemption, will clarify that all tech support scams
are potentially subject to the Rule, and allow the Commission to
redress consumer injuries under section 19(a)(1) of the FTC Act, 15
U.S.C. 57b(a)(1).
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\44\ See AMG Cap. Mgmt., LLC v. FTC, 141 S. Ct. 1341, 1352
(2021).
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B. Overview of Public Comments
The Commission has carefully reviewed and analyzed the record
developed in this proceeding. The Commission received 25 comments, 24
of which were either from individual consumers or anonymous commenters.
Of the individual and anonymous comments, one comment from a former
tech support employee supported the proposal and noted that it does not
burden employees.\45\ The rest of the 24 individual and anonymous
comments did not respond to the questions in the 2024 NPRM. The
comments ranged from requesting a complete ban of telemarketing, to
consumers expressing frustration at the volume of unwanted
telemarketing calls they receive.
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\45\ We cite public comments by the name of the commenting
organization or individual. See Kilmer 2024-27.
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The Electronic Privacy and Information Center and the National
Consumer Law Center (on behalf of its low-income clients) (``EPIC and
NCLC'') submitted a comment that recommended several additional
amendments to the Rule and requested several clarifications.\46\ First,
EPIC and NCLC recommended that the definition of tech support be
modified to explicitly include repair to software programs or
applications in addition to electronic devices.\47\ The Commission's
definition of tech support, which applies to ``any device on which code
can be downloaded, installed, run, or otherwise used,'' is intended to
include problems with software or applications on those devices. The
definition is not limited to the physical device itself, or the
hardware components of the device, and the Commission's law enforcement
experience shows that tech support scammers often tell consumers that
problems exist with the programs on their electronic devices. For
example, some tech support scams tell consumers that particular
software programs are malfunctioning.\48\ Other tech support scams warn
consumers that they have inadvertently installed malicious programs on
their computers.\49\ Still other scams begin with an offer to help
consumers with software applications, such as help resetting email
passwords.\50\ To avoid any potential confusion, the Commission will
modify the definition to explicitly include software, as discussed
below.
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\46\ See EPIC and NCLC 2024-25 (``EPIC and NCLC'').
\47\ EPIC and NCLC at 4.
\48\ See Click4Support at 4.
\49\ See Inbound Call Experts at 11.
\50\ See Complaint, FTC v. Elite IT Partners, Inc., No. 2:19-cv-
125 (D. Utah Feb. 25, 2019), available at <a href="https://www.ftc.gov/system/files/documents/cases/elite_dkt_1_complaint_3-7-19.pdf">https://www.ftc.gov/system/files/documents/cases/elite_dkt_1_complaint_3-7-19.pdf</a> (last
visited Sept. 5, 2024) (``Elite IT'').
---------------------------------------------------------------------------
Second, EPIC and NCLC suggested that the definition of tech support
be modified to note that the term device ``specifically include[s] the
performance or security of both hardware components and firmware used
in conjunction with the device, even if the telemarketer does not
reference the device through which those components may be used.'' \51\
The Commission does not believe that EPIC and NCLC's proposed change is
necessary because the unmodified term ``device'' includes all parts of
the device such as hardware or firmware regardless of whether those
components are specifically referenced.
---------------------------------------------------------------------------
\51\ EPIC and NCLC at 4.
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Third, EPIC and NCLC suggested that the definition of tech support
be modified to include ``offers for insurance, extended warranty, or
similar plans for device software.'' \52\ Many tech support scams sell
consumers long-term and continuity programs that will purportedly
repair devices in the future if other problems arise.\53\ The
definition
[[Page 99072]]
of tech support encompasses such products because it includes a
``plan'' or ``program'' to ``repair, maintain, or improve the
performance or security of any device.'' To the extent EPIC and NCLC
suggest that the Commission explicitly extend the definition to cover
insurance or warranty plans that replace the device rather than repair,
maintain or improve the device, the Commission declines to do so. The
Commission has not encountered tech support scams that sell only
insurance or warranties to replace a device rather than repair a
device. As such, the Commission does not believe the record supports
such an extension or that one is necessary. The Commission notes,
however, that the current definition does reach warranties or similar
plans that are offered to repair, maintain, or improve the performance
of devices.\54\
---------------------------------------------------------------------------
\52\ EPIC and NCLC at 4.
\53\ Complaint, FTC v. Pecon Software Ltd., No 12-cv-7186
(S.D.N.Y. Sep 24, 2012), available at <a href="https://www.ftc.gov/sites/default/files/documents/cases/2012/10/121003peconcmpt.pdf">https://www.ftc.gov/sites/default/files/documents/cases/2012/10/121003peconcmpt.pdf</a> (last
visited Sept. 5, 2024); Elite IT at 13.
\54\ EPIC and NCLC also requested that the Commission make
additional clarifications to the FTC's Business Guidance,
``Complying with the Telemarketing Sales Rule'' available at <a href="https://www.ftc.gov/business-guidance/resources/complying-telemarketing-sales-rule">https://www.ftc.gov/business-guidance/resources/complying-telemarketing-sales-rule</a> (last visited Sept. 5, 2024). The Commission will not
respond to these suggestions because the content of the business
guidance is not related to the ongoing rulemaking.
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III. Final Amended Rule
A. Definition of Technical Support Service
The final rule defines technical support service 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. This definition has one modification
from the definition proposed in the 2024 NPRM. It adds the phrase ``any
software or application run on such device'' to avoid any potential
confusion as to whether tech support services or products that are
related only to software or applications are covered by the Rule.
This definition is drafted broadly because, in the Commission's
experience, tech support scams have evolved with changes in consumer
behavior and technology, and will continue to evolve. While drafted to
be flexible to evolving schemes, the definition's focus on a type of
plan or service marketed in a particular manner provides specificity
regarding its coverage.
The definition of tech support also excludes ``any plan, program,
software, or service in which the person providing the repair,
maintenance, or improvement obtains physical possession of the device
being repaired.'' In the Commission's experience, tech support scams
typically do not involve situations where the repair includes physical
interaction with the device, such as replacing a computer hard drive or
repairing a broken phone screen.\55\ Whether this interaction involves
face-to-face contact between the consumer and the person providing the
repair, or the consumer shipping the device to the repair person and
waiting for a return shipment, the Commission believes that tech
support scams rarely involve physical repair of electronic devices.\56\
The Rule currently exempts calls in which payment is not required until
``after a face-to-face sales or donation presentation by the seller.''
\57\ In creating that exemption, the Commission explained that the
``occurrence of a face-to-face meeting limits the incidence of
telemarketing deception and abuse'' because the ``paradigm of
telemarketing fraud involves an interstate telephone call in which the
customer has no other direct contact with the caller.'' \58\ Here too,
the ``paradigm'' of tech support scams involves consumers speaking with
third parties with whom they have limited contact and often at a time
when they have been misled to believe that they have a problem with
their electronic device. Physical in-person repair does not involve the
same pressures as remote tech support, and it is less conducive to
scams.
---------------------------------------------------------------------------
\55\ Tech support scammers sometimes obtain remote access to a
computer or electronic device. ``Physical possession'' does not
include such remote access.
\56\ The Commission's lawsuit against Office Depot is an
exception to this pattern. See FTC v. Office Depot Inc., 9:19-cv-
80431 (S.D. Fla. Mar. 29, 2019) (alleging that Office Depot and
<a href="http://Support.com">Support.com</a> deceived consumers who brought their computers into
Office Depot stores for support services).
\57\ 16 CFR 310.6(b)(3).
\58\ Original TSR, 60 FR 43860.
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B. Requirements for Technical Support Telemarketing Calls
The final rule adds ``technical support services'' to the
categories of calls excluded from the TSR's exemptions for inbound
calls ``in response to an advertisement through any medium'' and
inbound calls in response to ``a direct mail solicitation,'' including
email.\59\ The Commission created these exemptions in the Rule based on
its consideration of four factors: whether Congress intended certain
types of sales activity to be exempt under the Rule; whether the
conduct or business in question ``already is regulated extensively by
Federal or State law''; whether the conduct ``lends itself easily to
the forms of deception or abuse that the Act is intended to address'';
and whether requiring business to comply the Rule would be ``unduly
burdensome weighed against the likelihood that sellers or telemarketers
engaged in fraud would use an exemption to circumvent Rule coverage.''
\60\
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\59\ 16 CFR 310.6(b)(5) and (6). For ``direct mail
solicitations'' to qualify for the exemption, the solicitations must
``clearly, conspicuously, and truthfully disclose[ ] all material
information listed in Sec. 310.3(a)(1)'' and contain ``no material
misrepresentation regarding any item contained in Sec. 310.3(d).''
\60\ Original TSR, 60 FR 43859.
---------------------------------------------------------------------------
The Commission decided to create exemptions from the Rule for calls
in response to advertisements and direct mail solicitation because, in
the Commission's experience, calls in response to these solicitations
``do not typically involve the forms of deception and abuse the Act
seeks to stem.'' \61\ At the same time, the Commission recognized that
``some deceptive sellers or telemarketers use mass media or general
advertising to entice their victims to call, particularly in relation
to the sale of investment opportunities, specific credit-related
programs'' and other areas.\62\ The Commission decided to exclude
certain categories of calls from the exemptions given its ``experience
with the marketing of these deceptive telemarketing schemes.'' \63\ The
Commission's experience with tech support schemes also supports
excluding tech support calls from the exemptions for inbound calls in
response to advertisements and direct mail solicitations.\64\
---------------------------------------------------------------------------
\61\ Id. 43860.
\62\ Id.
\63\ Id.
\64\ See supra, notes 37-39.
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The final rule minimizes the burden on tech support businesses that
do not engage in deceptive practices. First, tech support calls ``that
are not the result of any solicitation by a seller, charitable
organization, or telemarketer'' are still exempt under Sec.
310.6(b)(5). Under this exemption, as long as the call is not
solicited, a telephone call initiated by a consumer to the consumer's
computer manufacturer for technical support or a home security company
about a disruption to their service due to a device malfunction would
not be subject to the Rule unless, as part of that transaction, the
company also engaged in an upsell.\65\
---------------------------------------------------------------------------
\65\ 16 CFR 310.6(b)(4).
---------------------------------------------------------------------------
Second, excluding tech support where the person providing the
service takes physical possession of the device will also limit the
breadth of the Rule. For
[[Page 99073]]
example, consumer calls to a local repair shop or to the manufacturer
of their device seeking physical repairs will not be subject to the
Rule.
IV. Paperwork Reduction Act
The Rule contains various provisions that constitute information
collection requirements as defined by 5 CFR 1320.3(c), the definitional
provision within the Office of Management and Budget (``OMB'')
regulations implementing the Paperwork Reduction Act (``PRA''). 44
U.S.C. chapter 35. OMB has approved the Rule's existing information
collection requirements through April 30, 2027 (OMB Control No. 3084-
0097). The amendment newly requires certain inbound tech support calls
to comply with the Rule's recordkeeping and disclosure requirements.
This will increase the PRA burden for sellers or telemarketers as
detailed below. Accordingly, FTC staff is simultaneously submitting
this final rule and associated Supporting Statement to OMB for review
under the PRA.\66\
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\66\ This PRA analysis focuses specifically on the information
collection requirements created by or otherwise affected by the
amendment.
---------------------------------------------------------------------------
A. Estimated Annual Hours Burden
The Commission estimates the PRA burden of the proposed amendments
based on its knowledge of the telemarketing industry and data compiled
from the Do Not Call Registry. The annual hours of burden for sellers
or telemarketers will consist of two components: the time required to
make disclosures and the costs of complying with the Rule's
recordkeeping requirements.
First the Commission estimates that the disclosure burden will take
18,318 hours. The Commission uses the same methodology it has used in
the past to calculate the disclosure burden for categories of calls
that are excluded from the TSR's exemptions for inbound calls.\67\ The
Commission estimates that there are 63,900,000 inbound tech support
calls per year. To arrive at this figure, the Commission estimates that
there are 1.8 billion inbound telemarketing calls annually that result
in sales.\68\ To estimate how many of those calls are for tech support,
the Commission uses the ratio of tech support complaints to the total
number of telemarketing complaints it receives, based on the assumption
that the percentage of total complaints also reflects the percentage of
total calls. In 2023, there were 91,196 complaints about tech support
and 2,566,261 fraud complaints.\69\ Thus the Commission estimates 3.55%
of the inbound calls were related to tech support, i.e., 91,196 /
2,566,261. That translates to 63,900,000 inbound tech support calls,
i.e., 3.55% of 1.8 billion.
---------------------------------------------------------------------------
\67\ See, e.g., Agency Information Collection Activities;
Proposed Collection; Comment Request; Extension. 87 FR 23179 (Apr.
19, 2022).
\68\ Id.
\69\ See FTC, Consumer Sentinel Network Data Book 2023 at 9, 88.
---------------------------------------------------------------------------
Staff assumes that there will be no disclosure burden for non-
fraudulent calls because those calls likely already disclose the
information required by the Rule. Thus, the Rule would create a new
disclosure burden only on fraudulent calls. Staff estimates that 12.90%
of telemarketing calls are fraudulent. This estimate is based on
dividing a Congressional estimate of annual consumer injury from
telemarketing fraud ($40 billion) \70\ by available data on total
consumer and business-to-business telemarketing sales ($310.0 billion
projected for 2016).\71\ Thus, staff estimates that 12.90% of the
63,900,000 tech support calls are fraudulent, which amounts to
8,243,100 calls. Staff further assumes that the disclosures take 8
seconds per call. Thus, the total burden is the number of fraudulent
calls multiplied by the disclosure burden per call and converted to
hours (8,243,100 calls x 8 seconds per call / 3,600 to convert to
hours), or 18,318 hours.
---------------------------------------------------------------------------
\70\ 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 Federal Bureau of
Investigation (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>.
\71\ Direct Marketing Association (DMA) 2013 Statistical Fact
Book (Jan. 2013) at 5 (providing projections up through 2016).
---------------------------------------------------------------------------
Second, the estimated recordkeeping burden is 92,250 hours.
Estimating this burden requires estimating how many new telemarketing
entities will be subject to the TSR when the amendment goes into
effect. Staff first estimates the number of existing telemarketing
entities that engage in tech support sales. In calendar year 2023,
10,350 telemarketing entities accessed the Do Not Call Registry;
however, 566 were ``exempt'' entities obtaining access to data.\72\ Of
the non-exempt entities, 6,318 obtained data for a single State. Staff
assumes that these 6,318 entities are operating solely intrastate, and
thus would not be subject to the TSR. Therefore, staff estimates that
approximately 3,466 telemarketing entities (10,350 - 566 exempt - 6,318
intrastate) are currently subject to the TSR. To estimate the
percentage of those entities that sell tech support products and
services, staff again divides the number of telemarketing fraud
complaints for tech support by the total number of telemarketing fraud
complaints, i.e., 91,196 / 2,566,261 = 3.55%. Staff then multiplies
that percentage by the number of telemarketing entities (3,466) to
produce the estimate that 123 telemarketing entities sell tech support
products and services.
---------------------------------------------------------------------------
\72\ See National Do Not Call Registry Data Book for Fiscal Year
2023 (``Data Book''), available at <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/Do-Not-Call-Data-Book-2023.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/Do-Not-Call-Data-Book-2023.pdf</a> (last visited Sept. 5,
2024). 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.
---------------------------------------------------------------------------
When the amendment goes into effect, additional businesses will
likely be covered by the TSR. For example, tech support companies that
advertise their products through general advertisements and do not
engage in upselling may be subject to the Rule for the first time.\73\
On the other hand, companies that market through a combination of
advertisements and outbound telemarketing are already subject to the
Rule. Companies that receive inbound calls from consumers with
questions about their products and that engage in upsells of technical
support services are also already subject to the Rule. The Commission
estimates that the amendment will increase the number of telemarketing
entities that receive inbound tech support calls by a factor of 5,
which would mean that an additional 615 entities (123 x 5) will be
covered by the Rule.
---------------------------------------------------------------------------
\73\ 16 CFR 310.6(b)(5).
---------------------------------------------------------------------------
The Commission estimates that complying with the TSR's current
recordkeeping requirements requires 150 hours for new entrants to
develop recordkeeping systems that comply with the TSR, for a total
annual recordkeeping burden of 92,250 hours (150 x 615).
B. Estimated Annual Labor Costs
The Commission estimates annual labor costs by applying appropriate
hourly wage rates to the burden hours described above. The Commission
estimates that the annual labor cost for disclosures will be $323,130.
This total is the product of applying an assumed hourly wage of $17.64
for 18,318 hours
[[Page 99074]]
of disclosures.\74\ The Commission estimates that the annual labor cost
for recordkeeping will be $2,947,388. This is calculated by applying a
skilled labor rate of $31.95/hour \75\ to the estimated 150 burden
hours for the estimated 615 entities that will now be covered by the
Rule ($31.95 x 150 x 615).
---------------------------------------------------------------------------
\74\ This figure is derived from the mean hourly wage shown for
Telemarketers. See ``Occupational Employment and Wages--May 2023,''
U.S. Department of Labor, (Apr. 3, 2024) Table 1 (``National
employment and wage data from the Occupational Employment Statistics
survey by occupation, May 2023''), available at <a href="https://www.bls.gov/oes/current/oes_nat.htm">https://www.bls.gov/oes/current/oes_nat.htm</a> (last visited Sept. 5, 2024).
\75\ This figure is derived from the mean hourly wage shown for
Computer Support Specialists from the U.S. Department of Labor
source set out in the prior footnote.
---------------------------------------------------------------------------
C. Estimated Annual Non-Labor Costs
The Commission estimates that the annual non-labor costs per entity
for recordkeeping are $55 a year, which is derived from $5 for
electronically storing audio files, and $50 for storing the required
records. The Commission thus estimates that the annual non-labor costs
will be $33,855 (615 entries x $55).
V. Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA''), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996, requires that the
Commission conduct an analysis of the anticipated economic impact of
the amendment on small entities.\76\ The RFA requires that the
Commission provide a Final Regulatory Flexibility Analysis (``FRFA'')
with a final rule unless the Commission certifies that the rule will
not have a significant economic impact on a substantial number of small
entities.\77\
---------------------------------------------------------------------------
\76\ 5 U.S.C. 601 through 612.
\77\ 5 U.S.C. 605.
---------------------------------------------------------------------------
The Commission believes that the final rule will not have a
significant economic impact upon small entities, nor will it affect a
substantial number of small businesses. In the Commission's view, the
final rule should not significantly increase the costs of small
entities that are sellers or telemarketers. Therefore, based on
available information, the Commission certifies that the final rule
will not have a significant economic impact on a substantial number of
small entities, and hereby provides notice of that certification to the
Small Business Administration (``SBA''). Nevertheless, because the
Commission included an IFRA in the NPRM, the Commission has also
performed an FRFA below.
A. Statement of the Need for, and Objective of, the Rule
The legal basis for the amendment is the Telemarketing Act, which
authorizes the Commission to issue rules to prohibit deceptive or
abusive telemarketing practices.\78\ The Commission is issuing the
final rule to expressly exclude tech support calls from the exemptions
for inbound calls by consumers in response to advertisements and direct
mail solicitations from tech support services. As described in section
II of this final rule, the amendment is intended to address the
widespread harm caused by deceptive tech support services, which
disproportionately impact older consumers compared to younger ones.
---------------------------------------------------------------------------
\78\ 15 U.S.C. 6102(a)(1).
---------------------------------------------------------------------------
B. Statement of the Significant Issues Raised by the Public Comments in
Response to the Initial Regulatory Flexibility Analysis, a Statement of
the Assessment of the Agency of Such Issues, and a Statement of Any
Changes Made in the Proposed Rule as a Result of Such Comments
The agency did not receive public comments that responded to the
initial regulatory flexibility analysis.
C. The Response of the Agency to Any Comments Filed by the Chief
Counsel for Advocacy of the Small Business Administration in Response
to the Proposed Rule, and a Detailed Statement of Any Change Made to
the Proposed Rule in the Final Rule as a Result of the Comments
The Small Business Administration did not file comments in response
to the proposed rule.
D. Description and Estimated Number of Small Entities to Which the Rule
Will Apply
The amendment to the Rule affects sellers and telemarketers that
sell technical support services through inbound telemarketing calls
that are made in response to advertisements and direct mail
solicitations. As noted in section IV of this final rule (Paperwork
Reduction Act), staff estimates that there are 615 such entities that
would be covered by the Rule. For telemarketers, a small business is
defined by the SBA as one whose average annual receipts do not exceed
$25.5 million.\79\ Commission staff are unable to determine a precise
estimate of how many sellers or telemarketers constitute small entities
as defined by SBA. The Commission sought comment on this issue but did
not receive any information from commenters.
---------------------------------------------------------------------------
\79\ Telemarketers are typically classified as ``Telemarketing
Bureaus and Other contact Centers,'' (NAICS Code 561422). See Table
of Small Business Size Standards Matched to North American Industry
Classification System Codes, available at <a href="https://www.sba.gov/sites/sbagov/files/2023-06/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%282%29.pdf">https://www.sba.gov/sites/sbagov/files/2023-06/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%282%29.pdf</a> (last visited, Sept. 5, 2024).
---------------------------------------------------------------------------
E. Projected Reporting, Recordkeeping, and Other Compliance
Requirements, Including Classes of Small Entities and Professional
Skills Needed To Comply
The amendment will require sellers and telemarketers that sell
technical support services through inbound telemarketing calls made in
response to advertisements and direct mail solicitations to comply with
the TSR's disclosure and recordkeeping requirements. The small entities
potentially covered by the amendment will include all such entities
subject to the Rule. The Commission has described the skills necessary
to comply with these recordkeeping requirements in section IV of this
final rule (Paperwork Reduction Act).
F. Significant Alternatives to the Amendment
The Commission believes that there are no significant alternatives
to the amendment. The Commission has over many years pursued
alternatives to the amendment in the form of law enforcement and
consumer outreach. The continued injury caused by these scams shows
that the amendment to the Rule is necessary. See section II.A of this
final rule for more details.
Additionally, the final rule modified the scope of the definition
of technical support services by adding the phrase ``any software or
application run on such device,'' in order to avoid any potential
confusion as to whether tech support services or products that are
related only to software or applications are covered by the Rule. This
definition is still otherwise drafted broadly because, in the
Commission's experience, tech support scams have evolved with changes
in consumer behavior and technology and will continue to evolve. But
while drafted to be flexible to evolving schemes, the definition of
technical support services focuses on a type of plan or service
marketed in a particular manner provides specificity regarding its
coverage. See section III.A of this final rule for more details.
Lastly, the final rule minimizes the burden on tech support
businesses that do not engage in deceptive practices. First, tech
support calls ``that are not the result of any solicitation by a
seller, charitable organization, or telemarketer'' are still exempt
under Sec. 310.6(b)(5).
[[Page 99075]]
Second, excluding tech support where the person providing the service
takes physical possession of the device will also limit the breadth of
the Rule. See section III.B of this final rule for more details.
VI. Congressional Review Act
Pursuant to the Congressional Review Act, 5 U.S.C. 801 et seq., the
Office of
Information and Regulatory Affairs designated these rule amendments
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).
List of Subjects in 16 CFR Part 310
Advertising, Consumer protection, Telephone, Trade practices.
For the reasons stated above, the Federal Trade Commission amends
part 310 of title 16 of the Code of Federal Regulations as follows:
PART 310--TELEMARKETING SALES RULE
0
1. The authority for part 310 continues to read as follows:
Authority: 15 U.S.C. 6101-6108.
0
2. Amend Sec. 310.2 by:
0
a. Redesignating paragraphs (gg) through (ii) as paragraphs (hh)
through (jj); and
0
b. Adding new paragraph (gg).
The addition reads as follows:
Sec. 310.2 Definitions.
* * * * *
(gg) Technical support service means 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.
* * * * *
0
3. Amend Sec. 310.6 by revising paragraphs (b)(5)(i) and (b)(6)(i) to
read as follows:
Sec. 310.6 Exemptions.
* * * * *
(b) * * *
(5) * * *
(i) Calls initiated by a customer or donor in response to an
advertisement relating to investment opportunities, debt relief
services, technical support services, business opportunities other than
business arrangements covered by the Franchise Rule or Business
Opportunity Rule, or advertisements involving offers for goods or
services described in Sec. 310.3(a)(1)(vi) or Sec. 310.4(a)(2)
through (4);
* * * * *
(6) * * *
(i) Calls initiated by a customer in response to a direct mail
solicitation relating to prize promotions, investment opportunities,
debt relief services, technical support services, business
opportunities other than business arrangements covered by the Franchise
Rule or Business Opportunity Rule, or goods or services described in
Sec. 310.3(a)(1)(vi) or Sec. 310.4(a)(2) through (4);
* * * * *
By direction of the Commission, Commissioner Ferguson dissenting.
April J. Tabor,
Secretary.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix A--Concurring Statement of Commissioner Melissa Holyoak
Older American adults are squarely in the crosshairs of
fraudsters that use technical support scams.\1\ So are our
veterans.\2\ Unfortunately, these ``older adults [are]
disproportionately impacted by [technical support] scams and are
five times more likely than younger adults to report losing money to
them.'' \3\ And financial losses due to such scams have been
increasing in recent years.\4\ I believe the Commission is at its
best when it works to address such fraud--the central focus of our
consumer protection mission, which will continue to be one of my key
priorities while I serve at the Commission. And the Telemarketing
Sales Rule (TSR), as amended today, is an extension of the
Commission's focus on fraud and will ensure that we can protect some
of America's most vulnerable consumers through more robust
enforcement. Because today's amendment is sound and will help
protect some of America's most vulnerable consumers, I concur.\5\
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\1\ See Report, Fed. Trade Comm'n, Protecting Older Consumers
2023-2024, at 12-13, 15, 21 (2024), <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-commission-protecting-older-adults-report_102024.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-commission-protecting-older-adults-report_102024.pdf</a>.
\2\ See id. at 15; see also Oral Remarks of Commissioner Melissa
Holyoak, Open Commission Meeting, at 1 (Nov. 14, 2024), <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/holyoak-ocm111424remarks.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/holyoak-ocm111424remarks.pdf</a>.
\3\ Report, supra note 1, at 12.
\4\ Id.
\5\ I thank the Commission's Division of Marketing Practices for
their efforts.
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Elections have consequences. But it is hardly novel policy to
lawfully amend the long-standing, bipartisan TSR--which Congress,
not the current Chair, decided the Commission should promulgate and
enforce--to cover an ongoing and increasing threat to some of the
most vulnerable in America. And even if this amendment were somehow
novel policy, it is entirely consistent with President-elect Trump's
past aggressive anti-fraud policies, along with his ``relentless
commitment to keep America's seniors safe.'' \6\
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\6\ Cf., e.g., Remarks by President Trump in Roundtable
Discussion on Fighting for America's Seniors, The White House (June
15, 2020) (describing then-President Trump's ``ironclad commitment
to protecting and caring for America's seniors'' and work to protect
them from fraud), <a href="https://trumpwhitehouse.archives.gov/briefings-statements/remarks-president-trump-roundtable-discussion-fighting-americas-seniors/">https://trumpwhitehouse.archives.gov/briefings-statements/remarks-president-trump-roundtable-discussion-fighting-americas-seniors/</a>. To my knowledge, no other Commissioner believes
this amendment is poor policy or inconsistent with our legal
authorities, or would do anything but help older Americans--
including those that played a pivotal role in President-elect
Trump's recent victory. See, e.g., Susan Milligan, How Older Voters
Powered Trump's Election Engine, AARP (Nov. 7, 2024), <a href="https://www.aarp.org/politics-society/government-elections/info-2024/election-analysis-older-voters.html">https://www.aarp.org/politics-society/government-elections/info-2024/election-analysis-older-voters.html</a>.
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Since joining the Commission, I have not hesitated to dissent
when the Majority has gone beyond what Congress has authorized or
otherwise acted wrongly,\7\ including when I have stood alone in
articulating such concerns.\8\ While it is true that the current
Majority has prioritized controversial and unlawful rulemakings over
the last four years, as we turn the page I believe the Commission
should redirect its efforts and resources toward enforcement against
fraud and, only where appropriate, rulemakings that ensure the
Commission can robustly prosecute fraud and provide consumers
redress. Today's amendment is consistent with this new direction I
believe the Commission should chart. And it is sound policy that
fits squarely within the Commission's storied past and its mission
to protect the American people from fraudsters and scammers.
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\7\ See, e.g., Dissenting Statement of Commissioner Melissa
Holyoak, Joined by Commissioner Andrew N. Ferguson, In re the Non-
Compete Clause Rule, Matter No. P201200 (June 28, 2024), <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/2024-6-28-commissioner-holyoak-nc.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/2024-6-28-commissioner-holyoak-nc.pdf</a>.
\8\ See, e.g., Dissenting Statement of Commissioner Melissa
Holyoak, Negative Option Rule, FTC Matter No. P064202 (Oct. 16,
2024), <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/holyoak-dissenting-statement-re-negative-option-rule.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/holyoak-dissenting-statement-re-negative-option-rule.pdf</a>; Dissenting
Statement of Commissioner Melissa Holyoak, In re Pharmacy Benefit
Managers Report, Matter No. P221200 (July 9, 2024), <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/Holyoak-Statement-Pharmacy-Benefit-Managers-Report.pdf">https://www.ftc.gov/system/files/ftc_gov/pdf/Holyoak-Statement-Pharmacy-Benefit-Managers-Report.pdf</a>.
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Dissenting Statement of Commissioner Andrew N. Ferguson
I dissent from this rulemaking not because it is bad policy, but
because the time for rulemaking by the Biden-Harris FTC is over. The
American people have roundly rejected its regulatory assault on
American business. They delivered a resounding victory for President
Trump and a decisive mandate for his vision for the most pro-
innovation, pro-competition, pro-worker, and pro-consumer
administration in the history of our country. The proper role of
this lame-duck Commission is not to announce new policies,
[[Page 99076]]
but to hold down the fort, conduct routine law enforcement, and
provide for an orderly transition to the Trump Administration. I
will vote against all new rules not required by statute, and any
enforcement action that advances an unprecedented theory of
liability until that transition is complete.
[FR Doc. 2024-28399 Filed 12-9-24; 8:45 am]
BILLING CODE 6750-01-P
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