FTC issues NPRM to extend TSR coverage for inbound calls on elder fraud

Agency Rule-Making & Guidance TSR Civil Money Penalties

On April 16, the FTC published an NPRM for the Telemarketing Sales Rule (TSR) in the Federal Register to extend the TSR’s coverage to inbound telemarketing calls by consumers to include technical support service – i.e., calls that consumers would make in response to an advertisement. The FTC noted this extension of the TSR would allow the FTC to “obtain stronger relief,” such as civil penalties and consumer redress, when consumers would be affected by tech support scams. The FTC argued that this proposed expansion of the TSR would be necessary given the rise in consumer complaints regarding tech support scams, explaining that consumer complaints rose from 40,000 complaints in 2017 to nearly 115,000 complaints in 2021.  Additionally, the FTC explained that in 2018, consumers reported losses totaling over $55 million from these scams and noted that the scams disproportionately affected consumers over 60 years old. The proposed rule would define technical support services as a program or service that would be marketed to repair, maintain or improve the performance and security of electronic devices. The FTC explained that this broad definition will be necessary because scammers purport to offer such services as they evolve with changes to technology and consumer behavior; additionally, scammers would aim to profit from a consumer’s problems or unfamiliarity with technology. In sum, the proposed rule would add “tech support services” to the list of categories excluded from the TSR exemptions for inbound calls, specifically when such calls are in response to an advertisement “through any medium”; this exclusion will also extend to inbound calls in response to “a direct mail solicitation” including email. The FTC will seek comments on its proposed rule, including on nine specific questions, and comments must be received by June 17.