FTC Calls for Reform
The FTC has recently called for reforms to the Federal Telemarketing Sales Rule and as a result has issued a Notice of Proposed Rule Making. The proposed amendments would prohibit the use of certain novel payment methods by telemarketers and extend the ban on recovery services. If the amendments are approved remotely created checks and remotely created money orders as well as cash to cash money transfers and cash reloaded mechanisms, would be permanently banned.
After filing several lawsuits against payment card processors for their deceptive practices of accepting payments using remotely created checks or payment orders, the payment processors were forbidden from ever processing payments, but other payment processor were free to continue these deceptive practices. As a result, the FTC issued a NPRM if enacted would expand the rule making authority of the FTC concerning any deceptive practices by telemarketers and prevent the novel payment method.
The FTC finds payment processors are liable for ensuring the consumer is not subject to fraud and for monitoring merchants responsible for committing frauds against the consumer. If the TSR is amended the FTC would expect all payment card processors to comply with the new changes. The new amendment would only apply to the telemarketing merchant. Other non-telemarketing merchants can continue to use these payment methods for legitimate purposes only.
Contact us Now or Call Us Now at 855-204-3838 and see how we can help you! Do it Now!