Late last year, the Federal Trade Commission approved new telemarketing rules designed, in part, to prevent fraud in the financial marketplace via the prohibition of a handful of “suspect” payment methods: remotely created checks, remotely created payment orders, cash-to-cash transfers and cash reload mechanisms. 

You can read more about the amendments to the Telemarketing Sales Rule, here and here. The payment prohibitions became effective in June 2016.

The Commission has also recently announced adjustments to the maximum civil penalties for a variety of violations, including Section 5 of the FTC Act.  Section 5(l) of the FTC Act, 15 U.S.C. 45(l) (violations of cease and desist orders issued under Federal Trade Commission Act section 5(b)) – increase from $16,000 to $40,000.  The maximums will be adjusted for inflation each January from now on.

The new maximum penalty amounts will take effect on August 1, 2016. 

Note that for continuing violations, each day is a separate violation.  As a result, the maximum civil penalty may be multiplied by the number of days for each violation of the applicable statute or order.  When the FTC seeks any civil penalty it will consider mitigating factors, such as harm to the public, benefit to the violator, good or bad faith of the violator, the violator's ability to pay, deterrence of future violations, and vindication of the FTC's authority.

You can read more about the adjustment to civil monetary penalty amounts, here.

This article should be of interest to any company or individual engaging in lead generation and telemarketing, including corporate counsel. Please contact an FTC defense lawyer if you are interested in discussing the design and implementation of preventative compliance controls, or if you are the subject of a regulatory investigation or enforcement action.

This article is provided for informational purposes only and does not constitute, nor should it be relied upon, as legal advice. No person should act or rely on any information in this article without seeking the advice of an attorney.