What is the Telemarketing Sales Rule? A plain-language definition

Last updated 2026-07-09

What is the Telemarketing Sales Rule, exactly?

The Telemarketing Sales Rule, almost always abbreviated TSR, is a federal regulation issued by the Federal Trade Commission under the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994 (15 U.S.C. 6101-6108). The rule lives at 16 CFR Part 310. It debuted in 1995 and has been amended several times since, most significantly in 2003, 2010, 2012, and 2021.^[1]

At its core, the TSR does three things. It requires telemarketers to say who they are and what they're selling before asking for money. It bans a specific list of deceptive and abusive tactics. And it creates and enforces the National Do Not Call Registry, which gives consumers a federal right to stop most unsolicited sales calls.

The rule covers outbound telephone calls to consumers meant to induce a purchase, a charitable donation, or an investment. It also covers inbound calls that come in response to ads and end in a sale. What the TSR does NOT cover: purely business-to-business calls where no consumer is on the receiving end, some calls from sellers with an established business relationship (subject to strict limits), and genuinely non-commercial calls like political canvassing or informational surveys.

Run any outbound sales operation calling U.S. consumers, and the TSR almost certainly applies to you. That stays true even when you work through a third-party call center. Both the seller and the telemarketer can be held liable for the same violation.^[1]

How is the TSR different from the TCPA?

People confuse these two constantly. They overlap, but they're different laws enforced by different agencies.

The Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, is a 1991 statute enforced by the FCC and through private lawsuits. It focuses on technology: it restricts autodialers, prerecorded voice messages, and unsolicited fax advertising. The TCPA is why you can sue a company for $500 to $1,500 per robocall without any government involvement.^[2]

The TSR is an FTC regulation. The FTC enforces it directly. Private citizens generally cannot sue under the TSR, though state attorneys general can. The TSR cares less about the technology and more about the conduct: what you say, when you call, what you disclose, and whether the number sits on the Do Not Call list.

One bad call can violate both. A prerecorded sales call placed with an autodialer to a number on the DNC list may trigger TCPA liability (private lawsuit, $500 to $1,500 per call), TSR liability (FTC enforcement, up to $51,744 per violation), and state law claims on top. If you run a serious outbound team, knowing the cold calling rules under both regimes isn't optional.

Here's the split in one line. TCPA governs the technology and hands consumers a private right of action. TSR governs the conduct and hands the FTC its enforcement teeth.

Who does the Telemarketing Sales Rule cover?

The TSR covers two kinds of businesses: sellers and telemarketers. A "seller" is any person who provides goods or services to a customer for payment, or who solicits such a transaction. A "telemarketer" is any person who, on a seller's behalf, initiates or receives calls to or from a consumer. Both can be held liable even when one is a vendor of the other.^[1]

Exemptions exist. They're narrower than most people assume.

Category	TSR Coverage?	Notes
For-profit outbound sales calls to consumers	Yes, fully	Core scope of the rule
Inbound calls from consumer-initiated response to ad	Yes, if a sale occurs	Even if you didn't place the call
Business-to-business calls (true B2B, no consumer)	Generally exempt	Certain provisions still apply
Calls from a prior established business relationship	Partial exemption	EBR exempts from DNC only; other TSR rules still apply
Non-profit charitable solicitations	Partial	For-profit telemarketers calling for charities ARE covered
Political and survey calls	Exempt	No commercial transaction involved
Calls covered entirely by FTC's credit rule	Partial overlap	Check whether TSR or other rules govern

The established business relationship (EBR) exemption gets misused the most. It lets you call a prior customer who hasn't asked to be on the DNC list, but only for 18 months after their last transaction and only 3 months after a completed inquiry. It does not excuse you from the disclosure requirements, the calling hours rules, or the ban on misrepresentation.^[1]

One category surprises people. If a seller uses a third-party call center and that call center breaks the TSR, the seller can be on the hook when the seller knew or should have known about the violations. The FTC has pursued exactly this theory in enforcement.^[3]

What does the TSR actually require telemarketers to disclose?

The TSR requires specific disclosures early in every outbound call, before you ask for payment. Skip them and you've committed a violation even if the rest of the call is clean.^[1]

Required disclosures in outbound calls:

1. The identity of the seller. You must say who you're calling on behalf of. 2. That the purpose of the call is to sell goods or services (or to solicit a charitable contribution). 3. The nature of the goods or services. 4. If a prize is mentioned, the odds of winning and the fact that no purchase is required.

For sales that close on the call, more disclosures kick in before you take payment information:

• Total cost of the goods or services.
• All material restrictions, limitations, or conditions.
• Refund, cancellation, exchange, or repurchase policies (if you promote them as a benefit).
• For negative option offers (subscriptions, free trials that auto-bill), a clear disclosure of the recurring charge.

The 2021 TSR amendments tightened the negative option disclosure rules after the FTC found widespread abuse in subscription marketing.^[4] If your product involves any recurring billing, the current rule requires affirmative consent to the negative option feature specifically, separate from consent to the overall purchase.

Prerecorded messages carry their own disclosure layer. The message has to state promptly who's calling and give a toll-free number the consumer can call to be added to the seller's internal DNC list. Leaving out that opt-out mechanism is a standalone TSR violation.^[1]

What practices does the TSR prohibit outright?

Beyond disclosure failures, the TSR carries a flat prohibition list. These aren't soft guidelines. Each item is a per-call violation.

Prohibited practices under 16 CFR 310.4:

• Calling anyone on the National DNC Registry (with narrow exceptions for consent and EBR).
• Calling before 8 a.m. or after 9 p.m. local time at the consumer's location.
• Abandoning more than 3% of calls that connect to a live person (measured per campaign, per day). Abandonment means the caller hangs up or fails to connect a sales rep within 2 seconds of the person picking up.^[1]
• Using threats, intimidation, or obscene language.
• Causing any phone to ring, or engaging a person in conversation, repeatedly or continuously with intent to annoy, abuse, or harass.
• Making false or misleading statements to get a consumer to pay.
• Misrepresenting affiliation with a government agency or charitable organization.
• Processing any payment without the consumer's express verifiable authorization.
• Billing a consumer without their knowledge (unauthorized billing).

The FTC has enforced the call abandonment rule hard against high-volume predictive dialers. If your dialer drops a connected call because no agent is free, that counts as abandoned. At 3% you're at the limit. Above it, every abandoned call is a potential violation.^[3]

For anyone asking about what is cold calling in sales specifically, the TSR's prohibited practices list is the compliance framework to learn before you pick up the phone.

What is the National Do Not Call Registry and how does the TSR enforce it?

The National Do Not Call Registry launched in 2003 as a joint project of the FTC and FCC. Consumers register their residential and mobile numbers at donotcall.gov. Once a number has been on the registry for 31 days, telemarketers are barred from calling it.^[5]

The FTC runs the registry and licenses access to telemarketers. Companies making outbound sales calls have to access the registry at least every 31 days and scrub their call lists against it. The fee is $75 per area code per year (as of 2024), with the first five area codes free for small operations.^[5]

Not scrubbing is the single most common TSR violation cited in FTC complaints. The registry holds more than 249 million active registrations as of the FTC's fiscal year 2023 report, which means the default assumption for any random consumer number is that it's registered.^[5]

The TSR provides two main exceptions to the DNC requirement. First, express written consent: a consumer who signed a written agreement (paper or electronic) authorizing calls from a specific seller isn't protected against that seller's calls. Second, the established business relationship: a seller can call a prior customer for 18 months after a purchase and 3 months after a completed inquiry, as long as the consumer hasn't asked to be on the seller's internal DNC list.

Sellers also have to keep their own internal DNC list. If a consumer asks not to be called during any call, the seller must add that number to its internal list within 30 days and honor it for at least 5 years. Calling a number on your own internal DNC list is a violation separate from the national registry rules.^[1]

What are the penalties for violating the TSR?

The FTC can seek civil penalties up to $51,744 per violation, per day.^[6] That figure gets adjusted periodically for inflation under the Federal Civil Penalties Inflation Adjustment Act. It was $43,792 in 2020 and reached $51,744 effective January 2024.

In high-volume calling operations, those per-violation penalties stack fast. The FTC's 2020 action against Health Insurance Innovations ended in a $195 million judgment for TSR and other violations.^[3] The 2022 action against Vonage, a business calling platform, included a $100 million settlement tied to facilitation of illegal robocalls and TSR violations.^[7]

The FTC also has authority to seek injunctive relief, consumer redress, and in some cases disgorgement of ill-gotten gains. State attorneys general can bring their own TSR enforcement actions and pile state-law claims on top.

One nuance matters here. The TSR creates no private right of action. Individual consumers can't sue under the TSR the way they can under the TCPA. But state AGs and the FTC can act on behalf of harmed consumers, and a single FTC civil investigative demand is expensive to answer even if you eventually win.

Here's the financial exposure across the two federal telemarketing regimes:

Regime	Max Per-Violation Penalty	Private Lawsuit?	Enforcer
TSR (FTC)	$51,744 per violation	No	FTC + State AGs
TCPA (FCC)	$500-$1,500 per call (private)	Yes	FCC + Private plaintiffs

Small teams sometimes assume the FTC only chases large companies. Wrong. The agency has settled actions against solo operators and small call centers. If the conduct is egregious, size buys you no protection.^[3]

What is the franchise Telemarketing Sales Rule and does it apply to franchisees?

"Franchise Telemarketing Sales Rule" isn't a separate regulation. It's the standard TSR applied to franchise systems, and it comes up because of a common misconception: franchisees sometimes assume their franchisor's compliance program covers them, or that the FTC treats a franchise network as a single entity.

Neither assumption holds.

Each franchisee is an independent business. If a franchisee runs outbound sales calls to consumers, the franchisee has to comply with the TSR on its own. The franchisor's DNC scrubbing contract doesn't automatically extend its protection to the franchisee. The franchisee must be a named subscriber to the National DNC Registry (or be covered under a verifiable enterprise-level subscription that lists them) and must keep its own internal DNC list.

The FTC has addressed franchise systems in informal guidance, noting that a telemarketer calling on behalf of multiple sellers (including franchisees) must keep a separate entity-level list for each seller, or a combined registry that satisfies the opt-out obligations for each.^[1]

The franchise TSR issue shows up most in home services, insurance, and real estate franchise networks where individual franchisees do their own lead follow-up calls. If you're the franchisor, your franchise disclosure document (FDD) and franchisee operations manual should spell out TSR compliance obligations. If you're the franchisee, don't assume the umbrella covers you without written confirmation of exactly what the franchisor's registry subscription includes.

Does the TSR cover text messages and internet-based calls?

Short answer: yes, with some qualifications.

The TSR covers telephone solicitations, and the FTC reads "telephone" to include calls made over voice over internet protocol (VoIP). Use a VoIP dialer to make outbound sales calls to consumers, and the TSR applies exactly as it would for a traditional phone call.^[1]

Text messages are more nuanced. The FTC's 2003 amendments clarified that the TSR covers "any plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones." A standalone SMS marketing campaign with no voice call has historically been treated as outside TSR scope, with the TCPA and the CAN-SPAM Act carrying more weight for text-based marketing.

The FTC has said publicly that it watches text-based fraud closely and may apply TSR principles through other authority. Don't read "SMS is outside the TSR" as "SMS is unregulated." The TCPA's consent requirements for texts are, if anything, stricter than the TSR's requirements for voice calls.

For AI cold calling specifically, the FCC issued a declaratory ruling in February 2024 finding that AI-generated voices in robocalls are "artificial" voices under the TCPA, requiring prior express written consent.^[8] That ruling, combined with TSR prerecorded call rules, means AI voice agents making outbound sales calls face dual-regime compliance obligations.

Building a call script for compliance? See our cold calling scripts resource and cold call script templates that fold in TSR disclosure language.

How does the TSR interact with state telemarketing laws?

The TSR is a federal floor, not a ceiling. States can impose stricter rules, and they frequently do.^[9]

California, Florida, New York, and Texas all have state telemarketing statutes that add requirements beyond the TSR. Common state additions:

• Shorter calling hour windows (some states restrict calls to 8 a.m. to 8 p.m. rather than the TSR's 8 a.m. to 9 p.m.)
• State-level DNC registries (Florida and several other states keep their own lists that must be scrubbed in addition to the national registry)
• Registration or bonding requirements for telemarketers doing business in the state
• Private rights of action for state telemarketing law violations (which the TSR itself doesn't provide)

Florida's Telephone Solicitation Act, amended in 2021, deserves specific attention. It set one of the strictest consent standards in the country, requiring prior express written consent for calls and texts made with an automated system, and it created a private right of action with $500 per-call statutory damages.^[10]

Call nationally, and you can't simply comply with the TSR and call it done. The practical approach for small teams: comply with the strictest state rules you call into, which for most B2C outbound operations means Florida and California set your baseline.

LeadCompliant publishes a free state-by-state cold calling rules checker if you want to see which states pile on requirements beyond the TSR baseline.

What does a TSR-compliant outbound call actually look like?

Compliance isn't a checklist you file away. It's the actual structure of each call. Here's what a compliant outbound call includes, in order.

Before the call is dialed: the number has been scrubbed against the national DNC registry within the past 31 days, scrubbed against your internal DNC list, and checked for state-specific registry registration. The call is scheduled to go out between 8 a.m. and 9 p.m. local time at the consumer's location.

At the start of the call, within the first sentence: the agent states (1) their own name, (2) the name of the company they represent, and (3) that the purpose of the call is to sell something or discuss a commercial offer. No waiting until the consumer is engaged to reveal the commercial purpose.

During the call: no false statements about price, availability, government affiliation, or the consumer's current account status. No threatening language. No pressure tactics that cross into harassment. If the consumer says "don't call me again," the agent notes it, confirms it, and the number goes on your internal DNC list within 30 days.

At close: if payment information is collected, the agent reads back or confirms the total amount, the billing frequency, any material restrictions, and the cancellation terms. For any negative option, the agent gets explicit verbal consent to the recurring charge and records that consent.

For cold call operations, the cold calling definition that matters under the TSR is this: any outbound call to a consumer who hasn't previously initiated contact with you for a purchase is a cold call and is fully subject to TSR disclosure and DNC requirements.

If your operation uses a predictive dialer, watch your abandonment rate daily. The 3% cap applies per day, per campaign. Let it drift above that threshold for even a single day and you create per-call violations for every abandoned call above the line.^[1]

How do you get and stay compliant with the TSR?

Sustainable TSR compliance has four operational pieces: registry access, list hygiene, call recording and documentation, and training.

Registry access: register at donotcall.gov as a subscription organization. At $75 per area code per year, a national operation covering all 288 area codes pays roughly $21,450 annually. The first five area codes are free. You can also reach the registry through approved third-party list hygiene vendors, which is the more practical route for teams that don't want to wrangle raw registry files.^[5]

List hygiene: scrub your dialing list against the national DNC registry at minimum every 31 days. Scrub against your internal DNC list before every campaign run. Document each scrub with a timestamp and the registry version date.

Call recording and documentation: the TSR requires sellers to keep records that show compliance for set periods. Under 16 CFR 310.5, sellers must keep advertising materials for 24 months, sales scripts for 24 months, records of prize promotions for 24 months, and records verifying DNC compliance for 24 months.^[1] In an enforcement investigation, if you can't produce these records, the absence itself becomes evidence against you.

Training: every agent needs to know the required disclosures, the calling hours, what to do when a consumer requests DNC status, and what counts as an abandonment. Informal training that leaves agents guessing is no defense.

LeadCompliant offers a one-time compliance kit with a TSR disclosure checklist, a DNC scrub log template, and a call script framework. It's a useful starting point. Nothing here or there replaces actual legal counsel if your operation is large or your exposure is significant.

For the fuller cold calling compliance picture beyond the TSR, including TCPA consent requirements and state law wrinkles, see the linked resource.

Frequently asked questions

What does TSR stand for in telemarketing?

TSR stands for Telemarketing Sales Rule. It's the Federal Trade Commission's regulation at 16 CFR Part 310, issued under the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994. The TSR sets disclosure requirements, calling hour restrictions, Do Not Call obligations, and a list of prohibited practices for outbound telemarketing calls to consumers in the United States.

Is the Telemarketing Sales Rule the same as the TCPA?

No. The TCPA (47 U.S.C. 227) is enforced by the FCC and allows private lawsuits. It focuses on autodialer and prerecorded call technology. The TSR is an FTC regulation focused on conduct: disclosures, DNC compliance, and prohibited practices. One call can violate both. Penalties differ: the TCPA gives consumers $500 to $1,500 per call via private suits; the TSR carries up to $51,744 per violation in FTC civil penalties.

Who enforces the Telemarketing Sales Rule?

The FTC is the primary enforcer. State attorneys general also have authority to bring TSR civil actions in federal court on behalf of state residents. Unlike the TCPA, the TSR gives individual consumers no private right to sue. The FTC can seek civil penalties, injunctions, consumer redress, and disgorgement. State AGs can add state-law claims that carry their own penalties.

What are the TSR's calling hour restrictions?

The TSR bans outbound telemarketing calls before 8 a.m. or after 9 p.m. local time at the consumer's location, not yours. This is a per-call rule based on where the consumer's phone is registered or located. Some states impose stricter windows. Florida, for example, restricts calls under its Telephone Solicitation Act to 8 a.m. to 8 p.m. Always use the stricter of federal and applicable state rules.

Does the TSR apply to B2B calls?

Generally, no. The TSR targets calls to consumers. Purely business-to-business calls where both parties are businesses and no consumer is involved fall outside the TSR's main provisions. Some TSR provisions, including the ban on misrepresentation and certain payment protections, can still apply in B2B contexts. If your list includes any residential or mobile numbers belonging to individuals, those calls count as consumer calls.

What is the call abandonment rate limit under the TSR?

The TSR allows a maximum 3% call abandonment rate, measured per campaign per day. An abandoned call is one that connects to a live person but isn't transferred to a sales representative within 2 seconds of the consumer's greeting. Abandoned calls above the 3% threshold are per-call violations. If your predictive dialer drops connections because no agent is free, each one counts toward the limit.

How often must you scrub your list against the National DNC Registry?

At minimum every 31 days. The FTC requires telemarketers to access a current version of the registry no more than 31 days before any call to a listed number. You must also scrub your internal DNC list before every campaign run. Document each scrub with a date and registry version. Failure to scrub is the most commonly cited TSR violation in FTC enforcement actions.

Does the franchise Telemarketing Sales Rule exempt franchisees from compliance?

No. Franchisees are independent businesses under the TSR and must comply individually. A franchisor's registry subscription doesn't automatically cover franchisees unless each franchisee is explicitly named. Each franchisee must keep its own internal DNC list and honor consumer opt-out requests. Franchisors should address TSR obligations in their FDD and operations manual, but the compliance responsibility sits with each franchisee making calls.

What records does a telemarketer need to keep for TSR compliance?

Under 16 CFR 310.5, sellers and telemarketers must retain advertising and promotional materials, sales scripts, prize promotion records, and records showing DNC list compliance for at least 24 months. In a civil investigation, missing records aren't neutral; their absence can support an inference of violation. Keeping timestamped DNC scrub logs and call recordings is the practical minimum for a defensible compliance posture.

Can consumers sue under the Telemarketing Sales Rule?

No. The TSR creates no private right of action for consumers. Only the FTC and state attorneys general can bring TSR enforcement suits. This is a major difference from the TCPA, which lets individual consumers file suit. If a TSR violation also involves state telemarketing law violations (Florida and several other states), those state laws may provide private rights of action with per-call statutory damages.

What is the TSR's definition of an 'established business relationship'?

An established business relationship (EBR) exempts a seller from the DNC Registry restriction only. It applies for 18 months after a consumer's last purchase, delivery, or payment, or 3 months after a completed consumer inquiry. If the consumer asks to be on the seller's internal DNC list at any point, the EBR exemption ends immediately for that number. The EBR doesn't exempt the caller from any other TSR requirement, including disclosure rules and calling hours.

How much does it cost to access the National DNC Registry?

As of 2024, the FTC charges $75 per area code per year for registry access. The first five area codes are free. A company calling all 288 U.S. area codes would pay roughly $21,450 per year for full national access. Annual subscriptions run through the FTC's donotcall.gov portal, or through approved third-party list scrubbing vendors who often bundle the cost into broader data hygiene services.

Do AI voice calls need to comply with the TSR?

Yes. AI-generated outbound sales calls to consumers fall under the TSR just as human-agent calls do, including DNC scrubbing, calling hours, disclosure requirements, and the call abandonment rule. In February 2024, the FCC also ruled that AI-generated voices in robocalls are 'artificial' voices under the TCPA, requiring prior express written consent. An AI cold calling system making outbound sales calls faces obligations under both federal regimes at once.

What is the maximum civil penalty for a TSR violation?

As of January 2024, the FTC can seek civil penalties up to $51,744 per violation. Each individual call or instance of prohibited conduct is a separate violation. In large-volume campaigns, penalties stack quickly: a campaign making 10,000 calls to DNC-registered numbers carries theoretical maximum exposure over $500 million, which is why major FTC settlements routinely reach eight figures even after negotiated reductions.

Sources

1. FTC, 16 CFR Part 310 - Telemarketing Sales Rule (full rule text): TSR disclosure requirements, prohibited practices, calling hours, DNC obligations, internal DNC list rules, and recordkeeping requirements under 16 CFR 310
2. FTC, Telemarketing Sales Rule enforcement cases and press releases: FTC pursued seller liability for third-party call center TSR violations; Health Insurance Innovations $195 million judgment (2020); enforcement against operators of all sizes
3. FTC, Negative Option Rule and 2021 TSR Amendments: 2021 TSR amendments tightened negative option disclosure and affirmative consent requirements for subscription and free-trial offers
4. FTC, National Do Not Call Registry - donotcall.gov: Registry has over 249 million active registrations; $75 per area code per year access fee; first five area codes free; 31-day scrub requirement
5. FTC, Rules and civil penalty inflation adjustments (Federal Civil Penalties Inflation Adjustment Act): Maximum civil penalty under the TSR is $51,744 per violation as adjusted effective January 2024
6. FTC, Vonage settlement and enforcement press releases (2022): $100 million settlement against Vonage for facilitating illegal robocalls and TSR violations by customers; platform liability theory
7. FTC, Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. 6101-6108: TSR is a federal floor; states may impose stricter telemarketing requirements under the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. 6101-6108
8. Florida Legislature, Florida Telephone Solicitation Act, Sec. 501.059 F.S.: Florida Telephone Solicitation Act (2021 amendments) requires prior express written consent for automated calls/texts and creates private right of action with $500 per-call statutory damages
9. FTC, Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. 6101-6108: Statutory authority for the TSR; enacted 1994; grants FTC rulemaking authority over telemarketing practices and civil penalty enforcement