[Code of Federal Regulations] [Title 16, Volume 1] [Revised as of January 1, 2003] From the U.S. Government Printing Office via GPO Access [CITE: 16CFR310.3] [Page 375-376] TITLE 16--COMMERCIAL PRACTICES CHAPTER I--FEDERAL TRADE COMMISSION PART 310--TELEMARKETING SALES RULE--Table of Contents Sec. 310.3 Deceptive telemarketing acts or practices. (a) Prohibited deceptive telemarketing acts or practices. It is a deceptive telemarketing act or practice and a violation of this Rule for any seller or telemarketer to engage in the following conduct: (1) Before a customer pays \1\ for goods or services offered, failing to disclose, in a clear and conspicuous manner, the following material information: --------------------------------------------------------------------------- \1\ When a seller or telemarketer uses, or directs a customer to use, a courier to transport payment, the seller or telemarketer must make the disclosures required by Sec. 310.3(a)(1) before sending a courier to pick up payment or authorization for payment, or directing a customer to have a courier pick up payment or authorization for payment. --------------------------------------------------------------------------- (i) The total costs to purchase, receive, or use, and the quantity of, any goods or services that are the subject of the sales offer; \2\ --------------------------------------------------------------------------- \2\ For offers of consumer credit products subject to the Truth in Lending Act, 15 U.S.C. 1601 et seq., and Regulation Z, 12 CFR part 226, compliance with the disclosure requirements under the Truth in Lending Act, and Regulation Z, shall constitute compliance with Sec. 310.3(a)(1)(i) of this Rule. --------------------------------------------------------------------------- (ii) All material restrictions, limitations, or conditions to purchase, receive, or use the goods or services that are the subject of the sales offer; (iii) If the seller has a policy of not making refunds, cancellations, exchanges, or repurchases, a statement informing the customer that this is the seller's policy; or, if the seller or telemarketer makes a representation about a refund, cancellation, exchange, or repurchase policy, a statement of all material terms and conditions of such policy; (iv) In any prize promotion, the odds of being able to receive the prize, and if the odds are not calculable in advance, the factors used in calculating the odds; that no purchase or payment is required to win a prize or to participate in a prize promotion; and the no purchase/no payment method of participating in the prize promotion with either instructions on how to participate or an address or local or toll-free telephone number to which customers may write or call for information on how to participate; and (v) All material costs or conditions to receive or redeem a prize that is the subject of the prize promotion; (2) Misrepresenting, directly or by implication, any of the following material information: (i) The total costs to purchase, receive, or use, and the quantity of, any goods or services that are the subject of a sales offer; (ii) Any material restriction, limitation, or condition to purchase, receive, or use goods or services that are the subject of a sales offer; (iii) Any material aspect of the performance, efficacy, nature, or central characteristics of goods or services that are the subject of a sales offer; (iv) Any material aspect of the nature or terms of the seller's refund, cancellation, exchange, or repurchase policies; (v) Any material aspect of a prize promotion including, but not limited to, the odds of being able to receive a prize, the nature or value of a prize, or that a purchase or payment is required to win a prize or to participate in a prize promotion; (vi) Any material aspect of an investment opportunity including, but not limited to, risk, liquidity, earnings potential, or profitability; or (vii) A seller's or telemarketer's affiliation with, or endorsement by, any government or third-party organization; (3) Obtaining or submitting for payment a check, draft, or other form of negotiable paper drawn on a person's checking, savings, share, or similar account, without that person's express verifiable authorization. Such authorization shall be deemed verifiable if any of the following means are employed: (i) Express written authorization by the customer, which may include the customer's signature on the negotiable instrument; or (ii) Express oral authorization which is tape recorded and made available upon request to the customer's bank and which evidences clearly both the customer's authorization of payment for the goods and services that are the subject of the sales offer and the customer's receipt of all of the following information: [[Page 376]] (A) The date of the draft(s); (B) The amount of the draft(s); (C) The payor's name; (D) The number of draft payments (if more than one); (E) A telephone number for customer inquiry that is answered during normal business hours; and (F) The date of the customer's oral authorization; or (iii) Written confirmation of the transaction, sent to the customer prior to submission for payment of the customer's check, draft, or other form of negotiable paper, that includes: (A) All of the information contained in Secs. 310.3(a)(3)(ii)(A)- (F); and (B) The procedures by which the customer can obtain a refund from the seller or telemarketer in the event the confirmation is inaccurate; and (4) Making a false or misleading statement to induce any person to pay for goods or services. (b) Assisting and facilitating. It is a deceptive telemarketing act or practice and a violation of this Rule for a person to provide substantial assistance or support to any seller or telemarketer when that person knows or consciously avoids knowing that the seller or telemarketer is engaged in any act or practice that violates Secs. 310.3 (a) or (c), or Sec. 310.4 of this Rule. (c) Credit card laundering. Except as expressly permitted by the applicable credit card system, it is a deceptive telemarketing act or practice and a violation of this Rule for: (1) A merchant to present to or deposit into, or cause another to present to or deposit into, the credit card system for payment, a credit card sales draft generated by a telemarketing transaction that is not the result of a telemarketing credit card transaction between the cardholder and the merchant; (2) Any person to employ, solicit, or otherwise cause a merchant or an employee, representative, or agent of the merchant, to present to or deposit into the credit card system for payment, a credit card sales draft generated by a telemarketing transaction that is not the result of a telemarketing credit card transaction between the cardholder and the merchant; or (3) Any person to obtain access to the credit card system through the use of a business relationship or an affiliation with a merchant, when such access is not authorized by the merchant agreement or the applicable credit card system.