Research
The rules on a sales call, and the ones that stop when you dial
A federal rule tells a caller what it must disclose before you agree to pay and when it may call at all. Most of it switches off when you are the one who called, with one exception that matters.
What has to be said before you agree to pay
The core of the rule is a disclosure list, and its timing is the important part. The obligations bite "Before a customer consents to pay" for the goods or services offered.
Four items on that list apply to almost any consumer health purchase.
First, "The total costs to purchase, receive, or use, and the quantity of, any goods or services that are the subject of the sales offer".
Second, "All material restrictions, limitations, or conditions" on purchasing, receiving or using them.
Third, the refund position. If the seller has a policy of not making refunds, cancellations, exchanges or repurchases, it must give "a statement informing the customer that this is the seller's policy". If it makes any representation about such a policy, it must state all material terms and conditions of it.
Fourth, where the offer has a negative option feature, all material terms of it. Those include "the fact that the customer's account will be charged unless the customer takes an affirmative action to avoid the charge(s)". They also include the dates the charges will be submitted, and the specific steps needed to avoid them.
All of it has to be truthful, clear and conspicuous, and it has to come before consent to pay rather than after.
What a caller must say in the first breath
Separately from the payment disclosures, an outbound call carries oral disclosure duties that must be met promptly.
The caller must disclose the identity of the seller.
It must disclose "That the purpose of the call is to sell goods or services".
It must disclose the nature of the goods or services.
And where a prize promotion is offered, that no purchase or payment is necessary to win or participate, and that buying will not improve the odds, disclosed before or alongside the description of the prize.
The same duties attach to an upsell during a call, which is the hinge that the rest of this article turns on.
When a company may call, and what it may not do about your refusal
Timing is fixed. Without prior consent, calling a person's residence "at any time other than between 8:00 a.m. and 9:00 p.m. local time at the called person's location" is an abusive practice.
The rule also names harassment directly: "Causing any telephone to ring, or engaging any person in telephone conversation, repeatedly or continuously with intent to annoy, abuse, or harass" the person at the called number.
The provision on refusals is the most useful one to know, because it lists specific evasions by name.
Interfering with a person's right to be placed on a do-not-call registry is prohibited, and the rule spells out what interference includes.
Harassing the person who asks. Hanging up on them. Failing to honor the request. "requiring the person to listen to a sales pitch before accepting the request". Charging a fee for honoring it. Requiring the person to call a different number. And requiring them to identify the seller on whose behalf the call was made.
Each of those describes something that actually happens, which is presumably why each is written down.
Consent to be charged, and the recording rule
A separate paragraph governs the charge itself. Submitting billing information for payment "without the express informed consent of the customer or donor" is an abusive practice.
The seller must obtain consent both to be charged for the goods or services and to be charged using the identified account.
The rule then tightens where the seller already has your account details from some earlier transaction, which it calls preacquired account information.
Where preacquired information is combined with a free trial that converts to a paid arrangement, three things are required. The seller must obtain at least the last four digits of the account number from the customer. It must obtain the customer's express agreement to be charged, on that account. And it must "Make and maintain an audio recording of the entire telemarketing transaction."
In other transactions using preacquired information, the seller must identify the account with enough specificity for the customer to understand what will be charged, and obtain express agreement to be charged on it.
Two payment methods are barred outright in telemarketing: a remotely created payment order, and a cash-to-cash money transfer or cash reload mechanism.
The exemption most consumers walk straight into
Almost everything above applies to a call the seller made. The exemptions section changes the picture when the call goes the other way.
Two exemptions matter. Calls initiated by a customer that are not the result of any solicitation are exempt from the part. So are "Telephone calls initiated by a customer or donor in response to an advertisement" through any medium other than direct mail.
That second one is the common case. Seeing a number in an advertisement, on a website or in a video and calling it puts the call largely outside this rule.
The exemption is not total. It does not apply to advertisements for certain categories, including investment opportunities, debt relief services, technical support services and some business opportunities, nor to the two barred payment methods.
And it does not apply to any upselling during the call. An upsell inside an exempt inbound call is still covered by the rule.
The practical reading is uncomfortable and worth stating plainly. The protections are strongest when a stranger calls you, and weakest at the moment you call a number you saw in an advertisement, except for whatever they try to add to your order.
What the caller has to keep, and for how long
Recordkeeping is where a rule stops being aspirational, and this one is detailed.
A seller or telemarketer must keep the listed records "for a period of 5 years from the date the record is produced" unless otherwise specified.
Advertising, brochures, scripts, promotional material and each unique prerecorded message are kept for five years from when they stop being used.
A record of each call is required, and its contents run to ten items. The telemarketer and the seller. The good, service or purpose. Whether the consumer is an individual or a business. Whether the call was outbound.
Whether a prerecorded message was used. The calling number, called number, date, time and duration. The scripts and any prerecorded message used on the call.
The caller identification number and transmitted name, with any contracts or proof of authorization to use them and the period that authorization covers. And the disposition of the call.
That last set is what makes a spoofed or borrowed caller identification traceable back to whoever authorized it.
Reading this against a health purchase
Three things are worth carrying into any phone conversation about a health product.
Total cost, material restrictions and the refund policy are supposed to be disclosed before you consent to pay, not read to you afterward or left on a web page.
A recurring charge has its own disclosure requirements, including the affirmative step you would have to take to avoid the next charge and the dates it will be taken.
And a request not to be called again cannot lawfully be met with a sales pitch first, a fee, a different number to ring, or a demand that you name the seller.
The online equivalent of the recurring charge rules is a different statute, covered separately on this site, and the two overlap without being the same.
Two limits belong here. Only part 310 was read, and the definitions section was deliberately left to the page that already covers it. No seller's calling practice was examined, and whether any particular company's activity meets the rule's definition of telemarketing was not determined.
Key takeaways
- Total cost, material restrictions and the refund policy must be disclosed before a customer consents to pay.
- A negative option must be disclosed with the affirmative step required to avoid a charge and the dates it will be taken.
- Outbound calls to a residence are limited to between eight in the morning and nine at night, local time.
- A request not to be called cannot be met with a sales pitch, a fee, a different number, or a demand to name the seller.
- Charging an account requires express informed consent to the charge and to the account used.
- A free trial converting to paid on preacquired account details requires an audio recording of the whole transaction.
- Calls made in response to an advertisement are largely exempt, but upselling during them is not.
- Records including scripts, call details and caller identification authorizations are kept for five years.
Frequently asked questions
What must a seller tell me before I agree to pay on a call?
Truthfully and clearly, before consent to pay: the total costs and quantity of the goods or services, all material restrictions, limitations or conditions, and the refund position. If the seller has a no-refund policy it must say so; if it makes any representation about refunds, cancellations, exchanges or repurchases, it must state all material terms and conditions. Where there is a negative option feature, it must disclose all material terms including that the account will be charged unless the customer acts, the dates of the charges, and the steps to avoid them.
When can a company call me?
Without prior consent, calls to a residence are limited to between eight in the morning and nine at night, local time where the called person is. Separately, causing a telephone to ring or engaging someone in conversation repeatedly or continuously with intent to annoy, abuse or harass is prohibited.
What can a caller not do when I ask to be left alone?
The rule lists the evasions by name. It prohibits harassing the person who asks, hanging up on them, and failing to honor the request. It also prohibits requiring the person to listen to a sales pitch before accepting the request, or charging a fee for honoring it. And it prohibits requiring them to call a different number, or to identify the seller on whose behalf the call was made.
Do these rules apply if I called them?
Mostly not. Calls a customer initiates that are not the result of any solicitation are exempt, and so are calls made in response to an advertisement through any medium other than direct mail. The exemption does not cover certain advertised categories, such as investment opportunities, debt relief services and technical support services. It also does not cover two barred payment methods, or any upselling that happens during the call.
What is preacquired account information?
Account details the seller already has rather than ones you give during the call. Charging billing information without express informed consent is prohibited generally. Where preacquired information is combined with a free trial that converts to paid, three things are required. The seller must obtain at least the last four digits of the account number from the customer, and obtain express agreement to be charged on that account. It must also make and maintain an audio recording of the entire transaction.
Is there a record of the call?
There is supposed to be. Sellers and telemarketers must keep records for five years from production. Scripts and promotional materials are kept for five years after they stop being used. A record of each call lists the telemarketer and seller, the subject, whether it was outbound, and whether a prerecorded message was used. It also lists the numbers, date, time and duration, the scripts used, the caller identification number and name transmitted with proof of authorization to use them, and the disposition of the call.
How does this relate to online subscriptions?
They are different instruments that overlap. The online recurring charge statute has its own disclosure and consent requirements and borrows its definition of a negative option feature from this rule's definitions section. That statute is covered separately on this site. This rule governs telephone transactions, including the oral disclosures and the calling restrictions, which have no online equivalent.
Sources
Each document below is named as it names itself, with the date printed on that document rather than the day it was read.
- Title 16 Code of Federal Regulations section 310.3, Deceptive telemarketing acts or practices, read for the pre-consent disclosure list — Electronic Code of Federal Regulations, Office of the Federal Register, April 2024
- Title 16 Code of Federal Regulations section 310.4, Abusive telemarketing acts or practices, read for the consent and preacquired account provisions, the pattern of calls provisions, the calling time restriction and the required oral disclosures — Electronic Code of Federal Regulations, Office of the Federal Register, April 2024
- Title 16 Code of Federal Regulations section 310.5, Recordkeeping requirements, read for the five-year period and the per-call record contents — Electronic Code of Federal Regulations, Office of the Federal Register, April 2024
- Title 16 Code of Federal Regulations section 310.6, Exemptions, read in full for the customer-initiated and advertisement-response exemptions and their carve-outs — Electronic Code of Federal Regulations, Office of the Federal Register, December 2024