June 29, 2022

Volume XII, Number 180

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EARTH SHATTERING CHANGE?: FTC Proposes Huge (and Potentially Crippling) New Document Retention Requirements on Marketers–Here’s How to Get Involved to Limit the Damage

Editors note: For my thoughts as to why this is unconstitutional click here. 

Massive massive massive news out of the FTC.

The FTC considering a new NPRM–that’s a new rule applicable to marketers governed by the TSR–that would impose HUGE new document retention protocols on folks (including a COMPLETE makeover of your internal DNC list folks!)

But its not too late to get involved. (If only there was a buyer-side trade organization of responsible direct-to-consumer marketers to lead the charge… ugh, sorry its not up and running yet folks. Soon, I promise. I’m just focused on this whole “new law firm” thing right now.)  Read this article, then reach out to me and let’s help the FTC understand just how bad an idea some of this is.

In the new NPRM–found here— the FTC proposes requiring the retention of the following new categories:

(1) a copy of each unique prerecorded message; (2) call detail records of telemarketing campaigns; (3) records sufficient to show a seller has an established business relationship with a consumer; (4) records sufficient to show a consumer is a previous donor to a particular charitable organization; (5) records of the service providers that a telemarketer uses to deliver outbound calls; (6) records of a seller or charitable organization’s entity specific do-not-call registries; and (7) records of the Commission’s DNC Registry that were used to ensure compliance with this Rule.

The FTC is accepting comments from those who are concerned about the reach and breadth of this new ruling. Questions such as–how long should records be kept? What format? What does “unique” mean in this setting? And the like are currently on the table and YOU can weigh in if you want. (Happy to help with that process.)

Digging a bit deeper, when it comes to “call detail records” here is what marketers will need to hold onto if the rule passes:

for each call that a telemarketer places or receives, the calling number; called number; time, date, and duration of the call; and the disposition of the call, such as whether the call was answered, dropped, transferred, or connected. If the call was transferred, the record should also include the phone number or IP address that the call was transferred to as well as the company name, if the call was transferred to a company different from the seller or telemarketer that placed the call.

What do you think? Easy to hold onto these logs for 5 years?

And then if you want to prove an EBR now you have to prove:

for each consumer with whom a seller asserts it has an established business relationship, the seller must keep a record of the name and last known phone number of that consumer, the date the consumer submitted an inquiry or application regarding that seller’s goods or services, and the goods or services inquired about.

Notice that the rule implies that an inquiry might be limited to the express good or service inquired about! But, more basically, the record keeping requirement being imposed here is quite extensive.

A similar rule is proposed for previous donors in the context of donations:

the telemarketer must keep a record, for each such consumer, of the name and last known phone number of that consumer, and the last date that the consumer donated to the particular non-profit charitable organization. 

And there are INCREDIBLY IMPORTANT new rules proposed related to DNC compliance:

For the entity-specific do-not-call registry, the Commission proposes requiring telemarketers and sellers to retain records of: (1) the consumer’s name, (2) the phone number(s) associated with the DNC request, (3) the seller or charitable organization from which the consumer does not wish to receive calls, (4) the telemarketer that made the call; (5) the date the DNC request was made; and (6) the good or service being offered for sale or the charitable purpose for which contributions are being solicited.

This goes beyond the current rules that the number needs to be added to the list for a 5 year period. None of the rest of this information presently needs to be maintained. You HAVE to be paying attention here folks.

And how about the new proposed rules on DNC scrubs?

For the FTC’s DNC Registry, the Commission proposes requiring telemarketers or sellers
to keep records of every version of the FTC’s DNC Registry the telemarketer or seller
downloaded to ensure compliance with the TSR.

How weird is this? You have to keep the entire DNC registry you downloaded stored. Not even sure what to make of that in the context of companies that scrub–but do not take possession of the entire DNCR.

And how about consent records? The folks over at Jornaya and Active Prospect may have just come up big considering the requirement that FORMAT now is captured as proof of consent:

Specifically, for each consumer from whom a seller or telemarketer states it has obtained consent, the Commission proposes requiring sellers or telemarketers to maintain records of that consumer’s name and phone number, a copy of the consent requested in the same manner and format that it was presented to that consumer, a copy of the consent provided, the date the consumer provided consent, and the purpose for which consent was given and received.

I mean, gees. I wish I owned stock in a third-party verification service right now. My goodness.

But failing to keep records is no big deal. The FTC just proposes that every single failure is an independent violation of the TSR. That’s grim folks. Here’s the language:

The Commission proposes clarifying that the failure to keep each record required by Section 310.5 in a complete and accurate manner constitutes a violation of this Rule. The Commission wants to state clearly that a violation does not mean a failure to keep all records, but instead that failure to keep each required record constitutes a separate violation. To do otherwise would create a perverse incentive for deceptive telemarketers to choose not to comply with the recordkeeping provisions when the only consequence would be a liability for a single violation of the TSR. Such an outcome would negate the entire purpose of implementing recordkeeping requirements.

So if you make 1,000,000 calls but don’t keep your transactional logs every one of those calls just violated the TSR–even if the call was otherwise perfectly legal.

Yeah. This NPRM just assured that telecom compliance lawyers will have full-time employment into the next millennium. Good things I just started my own law firm to focus on–wait for it–telecom compliance.

Did I know this was coming? 

Probably not.

So anyhoo, these are just a handful of the (really neat and easy to comply with) changes proposed in the massive new NPRM. If you want to get involved  check out this website.

This is just massive folks.

© 2022 Troutman FirmNational Law Review, Volume XII, Number 142
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About this Author

Eric Troutman TCPA Lawyer Troutman Law Firm Orange County, CA
Founder

Eric J Troutman is known as one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. Eric also helps industry participants build TCPA-compliant processes, policies, and systems.

Eric's perspective allows him to...

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