The Rule requires most sellers and telemarketers to keep certain records that relate to their telemarketing activities. The Rule’s recordkeeping requirements do not apply to sellers and telemarketers of nondurable office and cleaning supplies. The following records must be maintained for two years from the date that the record is produced:
- advertising and promotional materials
- information about prize recipients
- sales records
- employee records
- all verifiable authorizations or records of express informed consent or express agreement.
Explanations of these categories follow.
Advertising and Promotional Materials
Sellers and telemarketers must keep at least one specimen copy of all substantially different advertising, brochures, telemarketing scripts, and promotional materials. It is not required to keep copies of documents that are virtually identical except for immaterial variations or minor alterations. Obviously, if no scripts or advertising or promotional materials are used in connection with the telemarketing activity, no materials need to be retained.
Information about Prize Recipients
The Rule requires sellers and telemarketers to maintain the name and last known address of each prize recipient, as well as the prize awarded, for all prizes represented to be worth at least $25. The value of a prize is determined by what you directly state or imply to a consumer. If you represent to a consumer, directly or by implication, that a prize is worth $25 or more, you must keep records about the prize recipients, even if the actual value of the prize is less than $25. On the other hand, when there are no direct or implied representations about the value of a prize, you must keep records for prizes that cost you $25 or more to purchase.
Sales Records
The Rule requires sellers and telemarketers to maintain the following information about your sales: the name and last known address of each customer; the goods or services purchased; the date the goods or services were shipped or provided; and the amount the customer paid for the goods or services. Only records relating to actual sales need to be maintained; you are not required to keep records of all customer contacts when customers do not make a purchase.
Consumer credit products: For offers of consumer credit products subject to the Truth in Lending Act (TILA) and Regulation Z, compliance with the recordkeeping requirements under those regulations is sufficient for compliance with the TSR recordkeeping requirement.
Magazine sales: For the sale of magazines through a fulfillment house, where sellers and telemarketers do not know or have control over the dates of shipment, you may comply with the requirement to keep a record of the shipment date by keeping a record of the date the order was placed with the fulfillment house or the date that the service is to begin. |
Employee Records
Sellers and telemarketers must keep employee records for all current and former employees directly involved in telephone sales. These records include the name (and any fictitious name used), the last known home address and telephone number, and the job title(s) of each employee. If fictitious names are used by employees, the Rule requires that each fictitious name be traceable to a specific employee. Businesses must maintain up-to-date information on current employees and last-known information on former employees. Sellers and telemarketers are not required to update information on former employees. In addition, records of individuals not directly involved in telephone sales do not have to be kept for purposes of the Rule. Nevertheless, such information may be required under other state or federal laws.
Verifiable Authorizations or Records of Express Informed Consent or Express Agreement
When the method of payment is not a credit card (subject to the protections of the Truth in Lending Act and Regulation Z), or a debit card (subject to the protections of the Electronic Fund Transfer Act and Regulation E), sellers and telemarketers must obtain a consumer’s express verifiable authorization before causing billing information to be submitted for payment. The Rule requires you to maintain a record of all verifiable authorizations that must be provided or received under the Rule. This requirement does not apply to conventional checks, written, signed, and mailed to you by the consumer, or to certain other methods, listed in the section on express verifiable authorization.
Sellers and telemarketers should retain records of the verifiable authorization for each transaction, in any form, manner, or format consistent with the methods of authorization permitted under the Rule. For example, if you obtain a written authorization from the consumer, a copy of it must be maintained; if authorization is via audio recording, a copy of the recording must be maintained. While the recording may be retained in any format, it must include all the information that must be disclosed to the consumer, as well as the consumer’s oral authorization. If a consumer gives written confirmation, you must maintain all the information provided in the confirmation.
For records of express informed consent and express agreement (required by the unauthorized billing provision of the Rule [Section 310.4(a)(6)] and the National Do Not Call Registry provision [Section 310.4(b)(1)(iii)(B)(i)]), you must create and maintain records of consent and agreement for each required transaction, and keep them in much the same way you keep such records in the ordinary course of business.
Maintaining Records
The Rule is not intended to impose any new recordkeeping procedures on sellers and telemarketers. You may maintain the records in any manner, format, or place that you keep such records in the ordinary course of business, including in electronic storage, on microfiche, or on paper.
Who Must Keep Records?
Sellers and telemarketers do not have to keep duplicative records if they have a written agreement allocating responsibility for complying with the recordkeeping requirements.Without a written agreement between the parties, or if the written agreement is unclear as to who must maintain the required records, telemarketers must keep employee records, while sellers must keep the advertising and promotional materials, information on prize recipients, sales records, and verifiable authorizations. In the event of
dissolution or termination of the business of a seller or telemarketer, the principal of the business must maintain all records of the business. In the event of a sale, assignment, or other change in ownership of the seller or telemarketer’s business, the successor business must maintain the records.
| Does the Rule require that other information be maintained concerning the verifiable authorizations? No, but it is sound policy for sellers and telemarketers who use the written confirmation method of authorization for non-debit and credit card payments to maintain records showing that the confirmation was sent to the customer before the customer’s billing information was submitted for payment. In addition, you may want to keep records of any refunds you provide to consumers who claim that the written confirmation was inaccurate. If law enforcement authorities get consumer complaints about unauthorized billing, they may ask the seller or telemarketer to produce the information to show that the Rule requirements were followed. |
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