For example, consent would not meet the requirement that it be informed if the consumer does not receive all the TSR’s required material disclosures – both the prompt oral disclosures for outbound calls and the disclosures of all material information required in all telemarketing transactions. Consent is an affirmative statement that the consumer agrees to purchase the goods or services (or to make the charitable contribution) and is aware that the charges will be billed to a particular account.
Free-to-pay conversion offers, sometimes known as free-trial offers, are offers or agreements where customers receive a product or service for free for an initial period and then incur an obligation to pay unless they take affirmative action to cancel before the end of the period
Pre-acquired account information is any information that enables sellers and telemarketers to place a charge against a consumer’s account without getting the account information directly from the consumer during the transaction for which the account will be charged. The use of pre-acquired account information radically changes the usual dynamic in sales transactions, which requires that a telemarketer obtain the customer’s acceptance of the $1000 personal loan bad credit offer, as well as the customer’s account number to be charged. Telemarketers using pre-acquired account information are able to cause a charge to a consumer’s account without getting the account number from the consumer during the transaction. The TSR establishes safeguards to protect consumers in all telemarketing transactions in which sellers and telemarketers have pre-acquired account information.
The TSR establishes separate requirements for pre-acquired account information transactions involving free-to-pay conversion offers. That’s because when used together with free-to-pay conversion offers, pre-acquired account information has resulted in significant numbers of unauthorized charges to consumers who think they can’t be charged at the end of a free trial because they haven’t provided their account information. The TSR specifies what sellers and telemarketers must do to prevent this from occurring and to get a consumer’s express informed consent.
- obtain from the customer at least the last four digits of the account number to be charged.
- obtain the customer’s express agreement to be charged for the goods or services and to be charged using the account number for which the customer has provided at least the last four digits.
- make and maintain an audio recording of the entire telemarketing transaction.
Obtaining the last four digits from the customer: To meet the requirement that sellers and telemarketers obtain from the customer at least the last four digits of the account number to be charged, you must ask the customer to provide this information, and the customer must provide it to demonstrate an understanding that by doing so, she is agreeing to make a purchase. You must inform the customer that you have the customer’s account number or the ability to charge the account without getting the full account number from the consumer. Reading the information to the customer and asking for confirmation of the digits is not complying with the TSR. In addition, it is not adequate to reuse digits that a customer may have provided for identification purposes during another portion of the call – such as in an inbound call where you ask the customer to provide his or her account number by pressing digits on the telephone keypad.
Neither is it sufficient to read the digits to the customer, and then ask the customer to recite them back
Express Agreement to be Charged: To meet the requirement that telemarketers get a customer’s express agreement to be charged for the goods and services – and to be charged using the account number for which she has provided at least four digits – you must ensure that the consumer expressly and unambiguously agrees both to the purchase and the means of payment. The four digits the customer provides must actually be the last four digits of the account to be charged. If the four digits the customer provides aren’t the last four digits of the account, the customer hasn’t expressly agreed to be charged, and the transaction is void for lack of express verifiable authorization.
