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Following a public comment period, the Â鶹´«Ã½ Trade Commission has approved final amendments to its Telemarketing Sales Rule (TSR), including a change that will help protect consumers from fraud by prohibiting four discrete types of payment methods favored by con artists and scammers.

“Con artists like payments that are tough to trace and hard for people to reverse,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The FTC’s new telemarketing rules ban payment methods that scammers like, but honest telemarketers don’t use.”

The TSR changes will stop telemarketers from dipping directly into consumer bank accounts by using certain kinds of checks and “payment orders” that have been “remotely created” by the telemarketer or seller. These two payment mechanisms make it easy for unscrupulous telemarketers to debit bank accounts without consumers’ permission, and can make it difficult to reverse the transactions with consumers’ banks.

In addition, the amendments will bar telemarketers from receiving payments through traditional “cash-to-cash” money transfers – provided by companies like MoneyGram, Western Union, and RIA. Scammers rely on cash transfers as a quick, anonymous, and irretrievable method to extract money from consumer victims – once it is picked up by the recipient, the money is gone.

The TSR changes also will prohibit telemarketers from accepting as payment “cash reload” mechanisms – such as MoneyPak, Vanilla Reload, or Reloadit packs used to add funds to existing prepaid cards. Scammers use the cash reload mechanism to apply the funds to their own prepaid debit cards and disappear with the money. In 2015, major cash reload providers replaced cash reload mechanisms with a swipe reload process, a safer alternative not affected by the TSR amendments.

As detailed in the Â鶹´«Ã½ Register notice announcing the Final Rule, the amendments address changes in the financial marketplace to ensure consumers remain protected by the TSR’s antifraud provisions, but are narrowly tailored to allow for innovations with respect to other payment methods that are used by legitimate companies. According to the statement of basis and purpose accompanying the notice, the final rule also will:

• Expand the advance-fee ban on recovery services to include losses both in prior telemarketing and non-telemarketing transactions; and
• Require that a description of the goods or services purchased must be included in the tape recording of a consumer’s express verifiable authorization to be charged.

In addition, the TSR amendments update several provisions related to the National Do Not Call (DNC) Registry to, among other things:

• Expressly state that a seller or telemarketer has to demonstrate that it has an existing business relationship with, or has received an express written agreement from, a consumer it calls if the consumer’s number is on the DNC Registry;
• Illustrate the types of burdens that deny or interfere with a consumer’s right to be placed on a seller’s or telemarketer’s entity-specific do-not-call list;
• Specify that if a seller or telemarketer does not get the information needed to place a consumer’s number on its entity-specific do-not-call list, the seller or telemarketer is disqualified from the safe harbor for isolated or accidental violations; and
• Emphasize that sellers are prohibited from sharing the cost of the fees to access the DNC Registry

The Commission vote approving publication of the notice in the Â鶹´«Ã½ Register was 3-1, with Commissioner Maureen Ohlhausen voting no.

Chairwoman Edith Ramirez and Commissioners Julie Brill and Terrell McSweeny issued a Commission statement, which also was approved by a 3-1 vote, with Commissioner Ohlhausen voting no and issuing a separate statement, dissenting in part.

Most provisions of the final rule will become effective 60 days after publication.

The Â鶹´«Ã½ Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.