TSR - Supporting Statement - 2019 - FINAL

Supporting Statement for
Information Collection Provisions of
The Telemarketing Sales Rule
16 C.F.R. Part 310
(OMB Control No. 3084-0097)
(1)

Necessity for Collecting the Information

The Telemarketing Sales Rule (“TSR” or “Rule”), 16 C.F.R. § 310, implements the
Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101-6108
(“Telemarketing Act”), as amended by the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act (“USA PATRIOT Act”), Pub. L. 107056
(Oct. 25, 2001). The Act seeks to prevent deceptive or abusive telemarketing practices in
telemarketing, which, pursuant to the USA PATRIOT Act, includes calls made to solicit charitable
contributions by third-party telemarketers. As required by 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.
In 2003, the Commission amended the TSR to include certain new disclosure requirements and
to expand the Rule in other ways. See 68 Fed. Reg. 4580 (Jan. 29, 2003). Specifically, the Rule was
amended to cover “upsells”1 (not only in outbound calls, but also in inbound calls) and the solicitation by
telephone of charitable donations by third-party telemarketers. Finally, the amendments established the
National Do Not Call Registry (“Registry”), permitting consumers to register, via either a toll-free
telephone number or the Internet, their preference not to receive certain telemarketing calls. 2
Accordingly, under the TSR, most sellers and telemarketers are required to refrain from calling
consumers who have placed their numbers on the Registry. 3 Moreover, sellers and telemarketers must

1
An “upsell” is the solicitation in a single telephone call of the purchase of goods or services after an initial
transaction occurs. The solicitation may be made by or on behalf of a seller different from the seller in the initial
transaction, regardless of whether the initial transaction and the subsequent solicitation are made by the same
telemarketer (“external upsell”). Alternatively, it may be made by or on behalf of the same seller as in the initial
transaction, regardless of whether the initial transaction and subsequent solicitation are made by the same
telemarketer (“internal upsell”).
2

68 Fed. Reg. 4580 (Jan. 29, 2003). The Registry applies to any plan, program, or campaign to sell goods or services
through interstate phone calls. This includes telemarketers who solicit consumers, often on behalf of third-party
sellers. It also includes sellers who provide, offer to provide, or arrange to provide goods or services to consumers in
exchange for payment. It does not limit calls by political organizations, charities, or telephone surveyors.
3

16 C.F.R. § 310.4(b)(1)(iii)(B).

periodically access the Registry to remove from their telemarketing lists the telephone numbers of those
consumers who have registered. 4
In 2008, the Commission promulgated amendments to the TSR regarding prerecorded calls, 16
C.F.R. § 310.4(b)(1)(v), and call abandonment rate calculations, 16 C.F.R. § 310.4(b)(4)(i). 5 The
amendment regarding prerecorded calls added certain information collection requirements. 6
Specifically, the amendment authorized sellers and telemarketers to place outbound prerecorded
telemarketing calls to consumers only if: (1) the seller has obtained written agreements from those
consumers to receive prerecorded telemarketing calls after a clear and conspicuous disclosure of the
purpose of the agreement; and (2) the call discloses and provides an automated telephone keypress or
voice-activated opt-out mechanism at the outset of the call. 7
In 2010, the Commission published additional amendments taking effect that year to require
specific new disclosures in the sale of a “debt relief service,” as that term is defined in Section 310.2(m)
to include for-profit credit counseling services, debt settlement, and debt negotiation services. The
amendments result in Paperwork Reduction Act (“PRA”) burden for all covered entities -- both new
and existing respondents -- that engage in telemarketing of these services. The amendments, among
other things: (1) applied the TSR to inbound telemarketing of debt relief services; and (2) added new
required disclosures and prohibited representations to curb deceptive practices prevalent in the
telemarketing of debt relief services.
(a) Recordkeeping
The Rule expressly requires that certain records be kept by covered entities. Specifically,
records evidencing various aspects of each covered transaction must be kept for a period of 24
months. 8 These records include marketing material, telemarketing scripts, identifying information for
prize recipients, identifying information for customers and the goods or services that customers
purchased, identifying information for employees engaged in telemarketing, and documents evidencing
customers’ authorization to be billed.
4
16 C.F.R. § 310.4(b)(3)(iv). Effective January 1, 2005, the Commission amended the TSR to require telemarketers to
access the Registry at least once every 31 days. See 69 Fed. Reg. 16,368 (Mar. 29, 2004).
5

See 73 Fed. Reg. 51,164 (Aug. 29, 2008).

6
By contrast, the revised standard for measuring the call abandonment rate did not impose any new or affect any
existing reporting, recordkeeping or third-party disclosure requirements within the meaning of the PRA. That
amendment relaxed the prior requirement that the abandonment rate be calculated on a “per day per campaign” basis
by permitting, but not requiring, its calculation over a 30-day period, as industry requested.
7

The prerecorded call amendment provided the first explicit authorization in the TSR for sellers and telemarketers to
place prerecorded telemarketing calls to consumers. The pre-amendment call abandonment prohibition of the TSR
implicitly barred such calls by requiring that all telemarketing calls be connected to a sales representative, rather than
a recording, within two seconds of the completed greeting of the person who answers. The requirements apply not
only to prerecorded calls that are answered by a consumer, but also to prerecorded messages left on consumers’
answering machines or voicemail services.

8

16 C.F.R. § 310.5(a).

2

(b) Disclosures
The TSR deems the failure to make specified disclosures of material information a deceptive act
or practice. These include the failure to disclose the “total costs to purchase, receive, or use, and the
quantity of, any goods or services that are the subject of the sales offer;”9 failing to disclose “[a]ll
material restrictions, limitations, or conditions to purchase, receive, or use the goods or services that are
the subject of the sales offer;”10 failing to disclose “[a]ll material costs or conditions to receive or
redeem a prize that is the subject of the prize promotion;”11 and failing to disclose all material conditions
related to negative option offers. 12 The prerecorded call amendment also requires that all prerecorded
calls disclose at the outset of the message the key to press or what to say to terminate the call and be
placed automatically on the seller’s do-not-call list. The other disclosure required by the amendment is
designed to ensure that consumers who are asked to agree to receive prerecorded calls clearly
understand the agreement they are making.
(2)

Use of the Information
(a) Recordkeeping

The recordkeeping requirements are essential to the Commission’s ability to monitor compliance
with the TSR. The Rule requires the production of records on a case-by-case basis, and the records are
used to establish whether the company or persons affiliated with the company have violated the Rule. In
addition, the FTC, other governmental agencies, or private litigants may use the records as evidence in
administrative or court proceedings, to identify witnesses, and to identify consumers who may be
entitled to redress in connection with any law enforcement actions. Without the required records, it
would be difficult to ensure that entities are complying with the Rule’s requirements and to redress injury
that may have resulted from violations of the Rule.
(b) Disclosures
The Rule’s disclosure requirements for live telemarketing calls help prevent deceptive or abusive
telemarketing acts or practices by ensuring that consumers are informed about the purpose of the call
and the terms and conditions of the potential sale or solicitation. Consumers use the disclosed
information in making purchasing decisions. The Rule’s disclosure requirements are also intended to
prevent fraud by making it more difficult for telemarketing companies to mislead consumers and easier
for law enforcement officials to identify and take action against those engaged in deceptive or abusive
telemarketing practices. The debt relief provisions similarly require disclosures to curb deceptive
9

16 C.F.R. § 310.3(a)(1)(i).

10

16 C.F.R. § 310.3(a)(1)(ii).

11

16 C.F.R. § 310.3(a)(1)(v).

12

16 C.F.R. § 310.3(a)(1)(vii).

3

practices prevalent in the telemarketing of debt relief services. The disclosure requirements for
prerecorded telemarketing calls protect consumer privacy by ensuring that consumers have the same
ability as in a live telemarketing call to ask to be placed on a seller’s company-specific do-not-call list
and terminate the call.
(3)

Consideration of Using Improved Information Technology to Reduce Burden

The TSR’s recordkeeping provisions permit sellers and telemarketers to keep records in
whatever form, manner, format, or location they choose. Accordingly, the Rule’s recordkeeping
provisions are consistent with the requirements of the Government Paperwork Elimination Act
(“GPEA”). 13 The disclosures required by the TSR for the most part are made orally and, secondarily,
by direct mail. Thus, electronic disclosures for purposes of implementing the provisions of the GPEA
are either inapplicable or impracticable.
Neither the 2008 nor the 2010 amendments altered the TSR’s recordkeeping requirements, and
each is designed to encourage the use of electronic means of compliance. As previously noted, the
prerecorded call amendment expressly permits the use of electronic means to record the written
agreements required by the amendment, as well as the use of electronic media for making required
disclosures.
(4)

Efforts to Identify Duplication

The TSR’s recordkeeping requirements involve the preparation and retention of records
demonstrating compliance with the Rule. Other federal and state government agencies may also require
the retention of some records that the TSR requires to be retained (e.g., personnel, sales, or donation
information). The debt relief and prerecorded call provisions create an obligation under the TSR’s
existing recordkeeping requirements for sellers to retain electronic or other records of consumers’
written agreements to receive such calls, and the scripts used in such calls. Staff is aware of
substantially identical Federal Communications Commission (“FCC”) prerecorded call and call
abandonment requirements 14 and some state law requirements for the calculation of call abandonment
rates. 15 To the extent that the recordkeeping requirements of the TSR may duplicate the information
collection requirements of other federal or state government agencies, the TSR does not require that a
duplicate set of records be maintained.
Many state laws require the same or similar disclosures that the TSR mandates. Staff knows of
no instance, however, under which the TSR or any other law or regulation governing telemarketing
requires that a specific disclosure be made in duplicative ways.
13

Pub. L. No. 105-277, Title XVII, 112 Stat. 2681-749 (1998) codified at 44 U.S.C. § 3501 et seq.

14

47 C.F.R. §§ 64.1200(a)(1)-(3), 64.1200(a)(7), and 64.1200(b)(3). The FCC’s opt-out requirements took effect on
January 14, 2013. The written agreement requirements took effect on October 13, 2013.

15

E.g., California Public Utilities Commission, Interim Opinion, Rulemaking 02-02-020 (June 27, 2002) at 20.

4

(5)

Efforts to Minimize Burden on Small Businesses

The TSR’s disclosure and recordkeeping requirements are generally consistent with the business
practices that most telemarketing organizations would choose to follow, regardless of legal
requirements. Moreover, the Rule has been designed to minimize the burdens on all business entities,
including small businesses. For example, the Rule contains an exemption that allows a seller and its
telemarketer to place live telemarketing calls to consumers with whom the seller has an established
business relationship, even if the consumer has placed his or her telephone number on the National
Registry. The effect of this exemption is that businesses—and in particular small businesses—do not
need to check their lists of existing customers against the National Registry for live telemarketing calls.
In addition, the burden placed on small charities is minimized by the fact that for-profit firms that make
fundraising calls on behalf of charitable organizations are not required to ensure that they exclude
consumers who have placed their telephone numbers on the National Registry. 16 Rather, they only have
to honor individual consumer requests not to be called by the particular charity. 17 Furthermore, the
TSR permits all entities accessing the National Registry to obtain the first five area codes of data for
free, limiting the burden placed on businesses that only require access to a small portion of the National
Registry.
The prerecorded call provisions of the TSR are not likely to have a significant impact on
legitimate small business for several reasons. By their nature, most small businesses serve local
customers, develop personal relationships with their clientele, and are therefore likely to be able to
obtain their customers’ agreements to receive useful prerecorded telemarketing messages. Moreover,
purely informational prerecorded messages are not covered by the TSR, and the use of such messages
to schedule service calls, delivery times, and the like therefore will not be subject to the written
agreement requirement. In addition, to the extent that, in this Internet age, small businesses may no
longer be strictly local businesses, the option provided by the amendment to obtain written agreements
to receive prerecorded message calls pursuant to E-SIGN will place them on an equal footing with
other businesses.
Likewise, the Commission has taken care in developing the debt relief provisions to set
performance standards, which establish the objective results that must be achieved, but do not establish
a particular technology that must be employed in achieving those objectives. Moreover, the debt relief
disclosure requirements are format-neutral; sellers and telemarketers may make the disclosures in
writing or orally, as long as they are clear and conspicuous. In sum, the FTC has worked to minimize
any significant economic impact on small entities.

16

16 C.F.R. § 310.6(a).

17

16 C.F.R. § 310.4(b)(1)(iii).

5

(6)

Consequences of Conducting the Collection Less Frequently
(a) Recordkeeping

The TSR requires specified records to be retained for 24 months. 18 A record retention period
of less than two years would frustrate many investigations under the FTC’s enforcement program.
Consumers who complain to the FTC about transactions covered by the Rule often do not do so
immediately. Therefore, there may already be a substantial “lag time” between the time the alleged rule
violations occur and the time the FTC learns of the alleged violations. A two-year record retention
period allows Commission staff to gather the information needed to pursue enforcement actions and to
identify those persons who have most recently suffered injury from the alleged deceptive or abusive
telemarketing practices.
(b) Disclosures
All of the disclosures required by the Rule provide consumers with information necessary to
make informed purchasing decisions or are essential to protect their privacy. Moreover, the Rule’s
disclosure requirements address specific areas of recurring deception or abuse in telemarketing. They
have been narrowly crafted to address the specific problems identified in these transactions through law
enforcement efforts by the states and the FTC.
(7)

Circumstances Requiring Collection Inconsistent With OMB Guidelines

The collection of information in this Rule is consistent with all applicable guidelines contained in
5 C.F.R. § 1320.5(d)(2).
(8)

Consultation Outside the Agency

Dating back to the Rule’s inception, the Commission has had a long history of consultation with
outside parties, including affected entities and consumers. As noted above, in connection with the
Commission’s congressionally-mandated review of the Rule, 19 the TSR was amended in January 2003
to include certain new disclosure requirements and to expand the Rule’s parameters in other ways.
During the 2003 Rule review, representatives of the industry informed the FTC that the information
collection burdens the Rule imposes are minimal and that some have even lessened over time as
technology has improved. During this time, Commission staff also met with federal, state, and local law
enforcement agencies to determine, among other things, whether the TSR’s recordkeeping requirements
were sufficient to facilitate effective enforcement of the Rule.
The Commission also sought and received extensive comment from interested parties on the
prerecorded call, debt relief, and anti-fraud amendments. The comments factored significantly in the
18

16 C.F.R. § 310.5.

19

16 U.S.C. § 6108.

6

Commission’s tailoring of the amendments to minimize burden consistent with the amendments’
consumer protection and privacy objectives. However, no public comments addressed the FTC’s PRA
burden analyses in these rulemakings.
Most recently, Commission staff sought public comment in connection with its current PRA
clearance request for the TSR, in accordance with 5 C.F.R. § 1320.8(d). See 81 Fed. Reg. 22,082
(Apr. 14, 2016). The Commission received four comments, none of which addressed the questions
posed about the Commission’s PRA analysis.
Consistent with 5 C.F.R. § 1320.12(c), the FTC is providing an additional opportunity for
public comment contemporaneous with this submission.
(9)

Payments or Gifts to Respondents
Not applicable.

(10) & (11)

Assurances of Confidentiality/Matters of a Sensitive Nature

The collection of information in this Rule is consistent with all applicable guidelines contained in
5 C.F.R. § 1320.5(d)(2). To the extent that information covered by a recordkeeping requirement of
the Rule is collected by the Commission for law enforcement purposes, the confidentiality provisions of
Sections 6(f) and 21 of the Federal Trade Commission Act, 15 U.S.C. §§ 46(f) and 57b-2, will apply.
(12)

Burden Estimate
Estimated Annual Hours Burden: 1,233,817 hours

The estimated burden for recordkeeping compliance is 14,061 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 1,219,428 hours for all affected industry members. Estimated burden for
reporting requirements is 328 hours. Thus, the total PRA burden is 1,233,817 hours. These estimates
are explained below.
Number of Respondents:
In calendar year 2018, 18,714 telemarketing entities accessed the Do Not Call Registry;
however, 561 were “exempt” entities obtaining access to data. 20 Of the 18,153 non-exempt entities,
13,131 sellers and 5,022 telemarketers accessed the Registry. Of those, however, 8,447 sellers and
3,145 telemarketers obtained data for just one state. Staff assumes that these 11,592 entities are

20

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.

7

operating solely intrastate, and thus would not be subject to the TSR. 21 Therefore, Staff estimates that
6,561 telemarketing entities are currently subject to the TSR, of which 4,684 (13,131 – 8,447) are
sellers and 1,877 (5,022 – 3,145) are telemarketers. 22

21

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.

22

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.

8

(a)

Recordkeeping Hours

Staff estimates that the 6,561 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
6,561 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 23 is 14,061 hours.
(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 C.F.R. § 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. 24 Accordingly, staff has
continued to estimate that the hours burden for most of the Rule’s disclosure requirements is 25 percent
of the total hours.
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, 25 staff estimates that 2.3
23

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 entityspecific do-not-call list, this obligation extends both to live and prerecorded telemarketing calls, and is also subsumed
within the PRA estimates above.

24

78 Fed. Reg. at 19,485.

25

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.

9

billion outbound telemarketing calls are subject to FTC jurisdiction and attributable to direct orders, that
450 million of these calls result in direct sales, 26 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 27 for telemarketers to recite the required pre-sale disclosures plus 3
additional seconds 28 to disclose the information required in the case of an upsell. 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. 29
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. 30 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.
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

26

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.

27

See, e.g., 60 Fed. Reg. 32,682, 32,683 (June 23, 1995); 63 Fed. Reg. 40,713, 40,714 (July 30, 1998); 66 Fed. Reg. 33,701,
33,702 (June 25, 2001); 71 Fed. Reg. 28,698, 28,700 (May 17, 2006); 74 Fed. Reg. 11,952, 11,955 (Mar. 20, 2009); 78 Fed.
Reg. at 19,485.

28

71 Fed. Reg. 3302, 3304 (Jan. 20, 2006); 71 Fed. Reg. at 28,700; 78 Fed. Reg. at 19,485.

29

See, e.g., 60 Fed. Reg. at 32,683; 78 Fed. Reg. at 19,485.

30

This assumption originated with industry response to the Commission’s 2003 Final Amended TSR. See 68 Fed.
Reg. 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.

10

customer pays for goods or services. 31 These disclosures 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).
Staff estimates that the general sales disclosures for telemarketing calls require 352,513 hours
annually. This figure includes the burden for written disclosures (1,005 inbound telemarketing entities
estimated to use direct mail32 x 10 hours 33 per year x 25% burden = 2,513 hours), 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)] = 352,513 hours. 34
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. 35 Employing that analysis, as
modified in response to a public comment to account for inbound debt relief sales, 36 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. 37 Staff further assumes that each such
consumer will receive one outbound call and place one inbound call for these services.
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

31

16 C.F.R. § 310.3(a)(1)(i)-(iii).

32

Based on previous assumptions, staff estimates that of the 6,561 telemarketing entities, 3,015 conduct inbound
telemarketing. Consistent with its previous analyses, staff estimates that, of the 3,015 entities that conduct inbound
telemarketing, approximately one-third (1,005) 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.

33

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.

34

The percentage and unit of time measurements are FTC staff estimates. (For more information regarding the 25%
apportionment appearing above see supra note 17 and surrounding text.)

35

75 Fed. Reg. at 48,504-05.

36

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.

37

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.

11

data available, there are 165,015,000 decision-making units. 38 Of these, 119,140,830 have one or
more credit cards, 39 and there are 2,942,779 decision-making units with at least one delinquent credit
card account. 40
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 1,635 hours (2,942,779 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”), 41 credit repair, 42 loss recovery services, 43 and advance fee loans. 44
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. 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

38
U.S. Census Bureau, Income and Poverty in the United States: 2017 (September 2018), Table 1, available at
https://www.census.gov/content/census/en/library/publications/2018/demo/p60-263.html reflecting 127,586,000
households in 2017); U.S. Census Bureau, Sharing a Household: Household Composition and Economic Well
Being: 2007-2010 (June 2012), Table 2, p. 4, available at https://www.census.gov/prod/2012pubs/p60-242.pdf
(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.
39

The estimated number of consumers with one or more credit cards is derived by multiplying the estimated decision
making units (165,015,000) 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 www.bostonfed.org/economic/ppdp/2011/ppdp1101.pdf.
Commission staff have not found percentage updates of 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.
40

The estimated number of consumers with a delinquent account is derived by multiplying the estimate of
consumers with one or more credit cards (119,140,830) 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 https://www.federalreserve.gov/releases/chargeoff/delallsa.htm (reporting a 2.47% delinquency
rate for credit cards for the second quarter of 2018).
41

16 C.F.R. § 310.3(a)(1)(vi).

42

16 C.F.R. § 310.4(a)(2).

43

16 C.F. R. § 310.4(a)(3).

44

16 C.F.R. § 310.4(a)(4).

12

divides a Congressional estimate of annual consumer injury from telemarketing fraud ($40 billion) 45 by
available data on total consumer and business-to-business telemarketing sales ($310.0 billion projected
for 2016), 46 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.
Thus, for the 7,631 Sentinel complaints in 2018 about investment opportunities covered by the
TSR, or 0.5% of the 1,427,563 total fraud complaints reported that year, 48 the general sales
disclosure burden is 2,800 hours (1.8 billion inbound calls x 0.0007 [0.005 x 0.13] x 8 seconds ÷
3,600). Likewise, the burden for business opportunity sales (14,225 complaints), including complaints
for multi-level marketing/pyramids/chain letters 49 is 4,000 hours (1.8 billion x .001 [0.01 x 0.13] x 8
seconds ÷ 3,600); for advance fee loan sales (16,027 complaints) 50 is 4,000 hours (1.8 billion x 0.001
[0.011 x 0.13] x 8 seconds ÷ 3,600); for credit repair sales (2,928 complaints) 51 is 1,200 hours (1.8
billion x 0.0003 [0.002 x 0.13] x 8 seconds ÷ 3,600); 400 hours for loss recovery services (547
complaints) 52 (1.8 billion x 0.0001 [0.0004 x 0.13] x 8 seconds ÷ 3,600); and 40 hours for CCLP
sales (73 complaints) 53 (1.8 billion x 0.00001 [0.0001 x 0.13] x 8 seconds ÷ 3,600). The exceptions
to the TSR’s inbound call exemptions add an additional 12,440 hours to the general sales disclosure
burden.
47

Altogether, the general sales disclosure burden is 366,588 hours (352,513 hours for outbound
sales + 1,635 hours for debt relief inbound sales + 12,440 hours for non-exempt inbound sales).
45

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
https://www.fbi.gov/news/stories/2010/december/telemarketing_120810/telemarketing_120810. See also Internet
Crime Complaint Center, 2017 Annual Report on Internet Crime (citing $1.4 billion of losses claimed in consumer
complaints for 2017), available at https://pdf.ic3.gov/2017_IC3Report.pdf.
46

DMA 2013 Statistical Fact Book (January 2013) projection up through 2016, p. 5 (no associated DMA updates
made or otherwise found thereafter).

47

See FTC, Consumer Sentinel Network Data Book 2018 (March 2019) (“Sentinel Data”), Appendix B3, p. 86,
available at https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book2018/consumer_sentinel_network_data_book_2018_0.pdf. 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.
48

Sentinel Data at 8.

49

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.

50

Id.

51

Id.

52

Id.

53

Id.

13

Specific Transaction Disclosures
Additional specific disclosures are required if the call involves a prize promotion, 54 the sale of
credit card loss protection products, 55 an offer with a negative option feature, 56 or the sale of a debt
relief service. 57 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)].
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 4,088
hours (2,942,779 outbound debt relief calls x 10 seconds ÷ 3,600 x 25% burden = 2,044 hours) +
(2,942,779 inbound debt relief calls x 10 seconds ÷ 3,600 x 25% burden = 2,044 hours).
Thus, the total specific transaction disclosure burden is 26,451 hours annually (22,363 for nondebt-relief calls) + 4,088 (for debt relief calls).
Cumulatively, therefore, the total annual burden for all of the disclosures is 1,219,428 (826,389
hours pre-sales disclosures + 366,588 hours general sales disclosures + 26,451 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
54

16 C.F.R. § 310.3(a)(1)(iv)-(v).

55

16 C.F.R. § 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.

56

16 C.F.R. § 310.3(a)(1)(vii).

57

16 C.F.R. § 310.3(a)(1)(viii).

14

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. 58 Based
on the number of entities accessing the Registry that are subject to the TSR, this requirement will result
in 219 burden hours (6,561 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 109 burden hours. Accordingly, accessing the Registry will impose a total
burden of approximately 328 hours per year.
Thus, total recordkeeping, disclosure, and reporting burden is 1,233,817 hours (14,061 hours
+ 1,219,428 hours + 328 hours).

58

See 67 Fed. Eg.R 37,366 (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 C.F.R. § 1320.3(h)(1).

15

Estimated Annual Labor Cost: $17,181,914
(a)

Recordkeeping Labor Cost

As indicated above, staff estimates that existing telemarketing entities require 14,061 hours,
cumulatively, to maintain compliance with the TSR’s recordkeeping provisions. Applying a clerical
wage rate of $16.92/hour, 59 recordkeeping maintenance for existing telemarketing entities would
amount to an annual cost of approximately $237,912. 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
$27.86/hour, 60 cumulative labor costs for them would approximate $208,950 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 $446,862.
(b)

Disclosure Labor Cost

The estimated annual labor cost for disclosures for all telemarketing entities is $16,730,552.
This total is the product of applying an assumed hourly wage rate of $13.72 61 to the earlier stated
estimate of 1,219,428 hours pertaining to the pre-sale, general and specific disclosures.
(c)

Reporting Labor Cost

Estimated labor cost supplying basic identifying information to the Registry operator is $4,500
(328 hours x $13.72 per hour).
Thus, cumulatively for both new and existing telemarketing entities total labor costs are
$17,181,914 [($446,862 recordkeeping) + ($16,730,552 disclosure) + ($4,500 reporting)].
(13)

Estimated Annual Non-Labor Cost: $4,717,991

(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
59

This figure is derived from the mean hourly wage shown for Office Clerks, General. See “Occupational
Employment and Wages–May 2018,” Bureau of Labor Statistics, U.S. Department of Labor, released March 29, 2019,
Table 1 (“National employment and wage data from the Occupational Employment Statistics survey by occupation,
May 2018”), available at https://www.bls.gov/news.release/ocwage.nr0.htm.

60

This figure is derived from the mean hourly wage shown for “Computer Support Specialist.” See id.

61

This figure is derived from the mean hourly wage shown for Telemarketers. See supra note 57. It is applied
additionally to the ensuing calculation of reporting labor cost regarding the Registry operator.

16

estimated 6,561 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 $328,050.
(b) Disclosure
Applying the disclosure estimates of 1,219,428 hours to an estimated commercial calling rate of
6 cents per minute ($3.60 per hour), staff estimates a total of $4,389,941 in telephone charges. 62
Thus, total capital and/or other non-labor costs are $4,717,991 ($328,050 (office supplies) +
$4,389,941 (telephone charges)).
(14)

Estimated Cost to the Federal Government

The Commission has also amended the TSR several times in order to impose fees on entities
that must pay for access to the National Registry. 63 In the Do-Not-Call Registry Fee Extension Act of
2007, Congress directed the FTC to make a moderate reduction in the TSR’s fees for access to the
National Registry, and to expand the definition of “exempt” entities eligible to access the National
Registry without charge. 64 Accordingly, the Commission amended the Rule to comply with that
directive. Staff anticipates that, to the extent Registry and enforcement costs are not fully offset by the
fees collected, the FTC’s budget will cover the shortfall.
(15)

Adjustments

The instant cumulative burden estimate of 1,233,817 hours is slightly reduced from the FTC’s
prior cleared burden estimate in 2016 of 1,238,670 hours. Estimated annual non-labor cost is reduced

62

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.

63

The Do-Not-Call Implementation Act enacted by Congress shortly after the Commission amended the TSR in 2003
authorized the Commission to “promulgate regulations establishing fees sufficient to implement and enforce the
provisions relating to the ‘do-not-call’ registry of the [TSR].” Pub. L. 108–10, 117 Stat. 557 (2003) at § 2. After
receiving that authority, the Commission has conducted annual amendment proceedings to set and adjust the
National Registry access fees to cover the costs of the Registry and Do Not Call enforcement. See for example 68
Fed. Reg. 45,134 (July 31, 2003); 69 Fed. Reg. 45,580 (July 30, 2004); 70 Fed. Reg. 43,273 (July 27, 2005); 71 Fed. Reg.
43,040 (July 31, 2006).

64

Pub. L. 110–188, 122 Stat. 635 (2008). The Commission subsequently reduced the access fees in compliance with
the Act. See 73 Fed. Reg. 43,354 (July 25, 2008). The Act also requires that the National Registry access fees be
adjusted annually after fiscal year 2009 to reflect the amount by which the average monthly Consumer Price Index for
urban consumers for the most recently ended 12-month period ending on June 30 exceeds the CPI for the 12 month
period ending June 30, 2008, provided the increase is at least one percent. Accordingly, the Commission has issued
yearly notices of any fee adjustments made pursuant to the Act. See 74 Fed. Reg. 42,771 (Aug. 25, 2009); 75 Fed.
Reg. 55,269 (Sept 10, 2010); 76 Fed. Reg. 53,636 (Aug. 29, 2011); 77 Fed. Reg. 51,697 (Aug. 27, 2012); 78 Fed. Reg.
53,642 (Aug. 30, 2013); (79 Fed. Reg. 51,477 (Aug, 29, 2014); 80 Fed. Reg. 59,778 (Oct. 2, 2015); 81 Fed. Reg. 59,845
(Aug. 31, 2016); 82 Fed. Reg. 39,533 (Aug. 21, 2017); 83 Fed. Reg. 46,639 (Sept. 14, 2018).

17

from $4,757,647 to $4,717,991. These reductions are largely attributable to staff’s reduced estimates
for the number of telemarketing entities subject to the TSR, based on updated National Registry data.
(16)

Statistical Use of Information
There are no plans to publish any information for statistical use.

(17)

Exceptions for the Display of the Expiration Date for OMB Approval
Not applicable.

(18)

Exceptions to the “Certification for Paperwork Reduction Act Submissions”
Not applicable.

18