The amendments include prohibiting four specific payments methods used by telemarketers and changes related to the National Do Not Call Registry.
The prohibited payment methods include:
- Cash-to-Cash money transfers – where cash is received from one person and transferred to another person in a different location and received in cash. This includes services like Moneygram or Western Union.
- Cash reload mechanisms – where a person can reload a prepaid card remotely and without swiping the card. Most vendors, such as Green Dot, have already removed this capability.
- Remotely created payment order & Remotely created checks – this does not include payment orders cleared through and ACH Network or subject to Truth in Lending requirements.
In addition, the Rule updates several provisions to the National Do Not Call (DNC) Registry. These include, that if the consumer is on the DNC, the credit union must:
- Have an existing business relationship with the consumer, and the consumer has not informed the credit union that they do not want calls, or
- Have a signed agreement form allowing the calls.
The amendments also clarify five existing Telemarketing Sales Rules:
- Any recording made to memorialize a customer’s express verifiable authorization (required for telemarketing transactions if payment is not made by credit or debit card) must include an accurate description of the goods or services.
- The telemarketing exemption for calls to businesses covers only calls inducing a sale or contribution from the business.
- It is the telemarketer who bears the burden of demonstrating that the seller has an existing business relationship with a customer whose number is listed on the DNC Registry.
- It remains unlawful to deny or interfere in any way with a consumer’s right to be placed on an entity-specific do-not-call list.
- The prohibition against telemarketers sharing the cost of accessing the DNC Registry is absolute.
Effective Dates:
February 12, 2016 Restrictions on sales calls to members on the Do Not Call Registry
June 13, 2016 Prohibitions on payment methods
These restrictions may cut down on credit union staff time in dealing with disputed transactions created by unscrupulous telemarketers.
Credit unions should have processes in place to screen the DNC Registry and verify that any of its members on the DNC Registry have not indicated to the credit union that they do not want to receive marketing calls before calling.
