The Federal Trade Commission announced Tuesday plans to ban the use of four payment methods favored by con artists and scammers. The changes to the Telemarketing Sales Rule would:
• Stop telemarketers from dipping directly into consumer bank accounts by using unsigned checks and “payment orders” that have been “remotely created.” These instruments can make it easy for unscrupulous telemarketers to debit bank accounts without permission, according to the FTC.
• Bar telemarketers from getting paid with traditional “cash-to-cash” money transfers, as well as “cash reload” mechanisms, that scammers rely on to get money quickly and anonymously from consumer victims.
The FTC is seeking public comment on the proposed amendments.
The FTC has found that telemarketers rely on these payment methods because they are largely unmonitored and provide consumers with fewer protections against fraud. The FTC’s proposed changes to the Telemarketing Sales Rule would make it a violation for telemarketers and sellers to accept any of these payment methods in any telemarketing transaction.
The proposed changes also would expand the ban on telemarketing “recovery services” in exchange for an advance fee. Telemarketers who call consumers offering to help recover losses they suffered through an earlier fraud are often engaged in deceptive practices, the FTC has determined. Currently limited to offers to recoup losses suffered in a prior telemarketing transaction, the existing ban would be expanded to include offers to recoup losses suffered in any previous transaction.
Adopted by the FTC in August 1995, the Telemarketing Sales Rule requires certain disclosures and prohibits misrepresentations during telemarketing calls. It also bars abusive practices, including charging upfront fees for certain services such as credit repair, recovery services and loan or credit offers presented as “guaranteed” or having a high likelihood of success.
Previous amendments created the National Do Not Call Registry, curtailed telemarketing calls that deliver prerecorded messages and combatted deceptive and abusive telemarketing of debt relief services.