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Telemarketing Sales Rule May Be Expanded to Cover B2B Conduct

FTC likely to eliminate the exemption

The Federal Trade Commission (“FTC”) is considering a proposed amendment to the Telemarketing Sales Rule (“TSR”) that would broaden the rule’s scope by prohibiting material misrepresentations and false or misleading statements in business-to-business (“B2B”) transactions.

The original TSR exempted nearly all B2B calls except those selling office and cleaning supplies to other businesses. The FTC decided not to exempt office and cleaning supply sales calls because, at the time those calls were by far the most significant B2B problem. But the FTC reserved the right to reconsider that position if additional B2B telemarketing activities became problematic.

Under that reservation of rights, the FTC now states that deceptive B2B telemarketing comes in many forms and should be curtailed more proactively. These deceptions include schemes to sell business directory listings, web hosting and design services, search engine optimization and market-specific advertising opportunities as well as schemes that impersonate the government. For example, in 2016, the FTC filed suit against a company that impersonated government officials by employing telemarketers who identified themselves as having government affiliation. The company deceived owners and operators of tractor-trailer trucks and other commercial vehicles into paying them fees for filing federal and state motor carrier registrations.

In light of these emerging concerns, the FTC has issued a notice of proposed rulemaking indicating that it is considering removing the B2B exemption from the TSR, possibly in its entirety. The FTC believes that a prohibition on deceptive B2B conduct will not burden marketers because the FTC Act already prohibits businesses from making misrepresentations and false or misleading statements. Businesses have until August 2, 2022 to submit comments to the FTC concerning this proposal.

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