FTC Telemarketing Sales Rule: a plain-language overview

Last updated 2026-07-10

What is the FTC Telemarketing Sales Rule and what does it actually cover?

The Telemarketing Sales Rule, codified at 16 CFR Part 310, is the Federal Trade Commission's main regulation for outbound telephone sales. Congress handed the FTC authority to write it through the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994, and the rule took effect in 1995. It has been amended several times since. The most significant recent change was finalized in 2024, and it addresses AI-generated voice calls for the first time ^[1].

The TSR applies whenever a seller or telemarketer places an outbound call to a consumer to induce a purchase of goods or services, or to solicit a charitable contribution. That scope is broad. If your team dials consumers to sell anything, the TSR almost certainly applies. The rule also reaches inbound calls that consumers make in response to an outbound solicitation, so a direct-mail piece or an email that drives someone to call your sales line can pull that inbound call under TSR coverage.

What the TSR does not cover matters just as much. It exempts calls to businesses in most situations, which is why B2B-focused teams often treat it as less of a daily worry than the TCPA. It also generally exempts catalog sellers who receive inbound calls and certain financial institutions already regulated under other federal schemes. But the "business" exemption is narrower than people assume. If a business call is really aimed at a consumer who happens to own a business, or if the goods are bought for personal use, the TSR can still apply ^[1][2].

For a fuller picture of what cold calling means under federal law and how the TSR sits alongside the TCPA, the linked article breaks down both frameworks side by side.

What are the TSR's core calling rules, including the 8 a.m. to 9 p.m. restriction?

The rule that bites first is calling hours. Under 16 CFR 310.4(c), telemarketers may not call consumers before 8 a.m. or after 9 p.m. local time at the consumer's location ^[2]. That's the consumer's clock, not yours. A team based in New York calling a list of California numbers has to stop at 9 p.m. Pacific, which is midnight Eastern. This trips up outbound teams constantly.

For more on how the 8-to-9 window interacts with TCPA quiet hours and what to do with consumers in unknown time zones, see the full breakdown at FTC Telemarketing Sales Rule 8 a.m. to 9 p.m. local time: what it means for your team.

Beyond calling hours, the TSR bans a set of specific practices:

• Abandoning calls. A call is "abandoned" under the TSR if a live representative is not connected within two seconds of the consumer answering. Abandonment rates have to stay at or below 3 percent of all answered calls, measured per campaign per day ^[2].
• Calling someone who has asked not to be called again. Once a consumer makes that request, you honor it immediately and keep the number on a company-specific do-not-call list.
• Calling numbers on the National Do Not Call Registry. If a number has been on the Registry for 31 days or more and you don't have a prior business relationship or written consent, calling it violates the TSR ^[2][3].
• Using automatic telephone dialing equipment to deliver prerecorded messages without prior written consent from the consumer.

The prerecorded-message rule was already strict. The 2024 amendments tightened it by making clear that AI-generated voices count as prerecorded messages under the TSR, whether the audio was recorded in advance or synthesized in real time ^[1].

See our AI cold calling article for what this means for teams weighing voice AI tools.

What disclosures does the TSR require on every outbound call?

The TSR requires telemarketers to make a set of disclosures promptly and clearly at the start of every call, plus more before any payment is taken. These aren't suggestions. Missing one is its own violation.

At the start of a call, the telemarketer has to disclose ^[2]:

1. The identity of the seller. 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 being offered.

Those three come before the sales pitch begins. Plenty of teams front-load them into a quick opener, which satisfies the rule. What doesn't satisfy it is burying identity at the end after a long pitch, which the FTC has cited in enforcement actions.

Before taking billing information or completing a sale, the telemarketer also has to disclose ^[2]:

• The total cost to purchase.
• All material restrictions, limitations, or conditions on the offer.
• The seller's refund, cancellation, or exchange policy if a refund is part of the pitch.
• In prize promotions, the odds of winning, the no-purchase-necessary alternative, and any conditions for getting the prize.

For upsell calls, where a second offer comes during the same call, the TSR requires the consumer to affirmatively agree to hear the upsell, and the same disclosures apply to that upsell offer on its own.

The disclosure rules touch cold calling scripts directly. If your script doesn't open with seller identity and purpose, it's noncompliant on its face.

What does the TSR require sellers to do before accepting payment?

This is where a lot of violations happen. The TSR bars telemarketers from misrepresenting any material aspect of the offer, and it lists the prohibited misrepresentations at 16 CFR 310.3 ^[2]. Those include false statements about cost, the nature of the product, earnings claims, government endorsements, and the seller's affiliation with any organization.

For free-trial offers specifically, the TSR requires the telemarketer to get express informed consent before charging the consumer. "Express informed consent" means the consumer is clearly told the amount that will be charged and the date the charge will hit before any billing information is submitted. Recording that consent isn't technically required by the rule itself, but it's the only practical way to defend against a complaint. Sellers who couldn't produce evidence of consent have generally lost enforcement cases.

The TSR also bans certain payment methods outright. Sellers may not accept payment through remotely created checks (also called demand drafts) or remotely created payment orders when a consumer initiates an inbound call in response to a prerecorded message ^[2]. Cash-to-cash money transfers and certain reloadable cards are restricted for specific offer categories too. The FTC added these after watching fraud patterns built on payment methods that are hard for consumers to reverse.

One more thing that catches teams off guard: the TSR's ban on billing without authorization is absolute. A "soft authorization" where the rep says "unless you tell me not to, we'll charge you" does not satisfy the rule. The consumer has to affirmatively agree.

How does the TSR's do-not-call system work, and how does it relate to the National DNC Registry?

The TSR set up the National Do Not Call Registry framework alongside the FCC's TCPA rules, and the two systems run in parallel ^[3]. The practical result: if a number is on the National Registry, you scrub it under both the TSR (enforced by the FTC) and the TCPA (enforced by the FCC and through private lawsuits). The TSR also requires sellers to keep their own company-specific DNC list.

Here's how the TSR's DNC obligations break down:

• National Registry: Sellers must subscribe to the Registry (through telemarketing.donotcall.gov), download the relevant area code data, and scrub their call lists against it no more than 31 days before placing any call ^[3].
• Company-specific list: Any consumer who asks not to be called again has to be added to your internal list within a reasonable time (the FTC expects immediate logging) and cannot be called again. This obligation doesn't expire.
• Safe harbor: A seller has a safe harbor from a Registry violation if it can show it has written DNC procedures, trains its staff on those procedures, uses a version of the Registry downloaded no more than 31 days before the call, and the call was the result of error ^[2].

The safe harbor is narrow. "We didn't know" is not enough. You need documented procedures, documented training, and a documented scrubbing process.

For a closer look at managing cold calling lists and DNC scrubbing workflows, that linked article covers the operational side in detail.

What are the TSR penalties, and how does the FTC actually enforce it?

The FTC enforces the TSR through civil actions in federal court. The maximum civil penalty is $51,744 per violation as of 2024, adjusted annually for inflation under the Federal Civil Penalties Inflation Adjustment Act ^[4]. Each individual call to a number on the DNC Registry is a separate violation. A campaign that dials 10,000 Registry numbers could, in theory, face more than $500 million in penalties. Real settlements land far lower, but the multiplier is the thing that should get your attention.

The FTC has brought hundreds of TSR enforcement actions since 1995. Targets have ranged from a lone telemarketer working out of a spare bedroom to call centers placing millions of calls a month. Common patterns in these cases include ^[4][5]:

• Mass DNC Registry violations combined with abandoned calls above the 3 percent threshold.
• Free-trial offers that enrolled consumers in subscriptions without clear disclosure.
• Deceptive prize-promotion schemes.
• Operations that kept calling after consumers explicitly asked to be removed.

The FTC also has authority under Section 5 of the FTC Act to pursue unfair or deceptive practices that fall outside the TSR's specific text. That gives the agency room to go after novel fraud schemes even when the exact conduct isn't spelled out in the rule.

State attorneys general can bring TSR enforcement actions too, and many have. A state AG action and a parallel FTC action for the same conduct are legally possible, though rare. More often, an AG brings a separate state consumer-protection claim alongside or instead of a TSR claim.

For a side-by-side look at TSR penalties versus TCPA exposure, see the section below.

How does the TSR compare to the TCPA, and which one applies to your team?

This is the question almost every compliance owner asks first. The honest answer: usually both apply, but they have different enforcers and different teeth.

Feature	FTC Telemarketing Sales Rule (TSR)	TCPA (47 USC 227)
Enforcer	FTC (government only)	FCC + private plaintiffs
Private right of action	No	Yes, $500-$1,500 per call
Max per-violation penalty	$51,744 (government action)	$1,500 per call (willful, private)
Calling hours	8 a.m. to 9 p.m. local	8 a.m. to 9 p.m. local (FCC rule)
DNC Registry	Yes, required scrub	Yes, required scrub
Applies to B2B calls	Generally no	Generally no (autodialer/prerecord)
AI voice calls	Explicitly covered (2024)	Covered as prerecorded messages
Consent for prerecorded calls	Prior written consent required	Prior express written consent required

The TCPA's private right of action is what drives most litigation. Any individual consumer can sue under the TCPA without going through the government, and plaintiffs' attorneys file these cases at scale. The TSR has no equivalent private-suit mechanism. Only the FTC or a state AG can bring a TSR enforcement action ^[6].

That asymmetry means TCPA violations produce more lawsuits per incident, while TSR violations can produce larger government-driven penalties when the FTC decides to act. A smart compliance program treats both frameworks as mandatory, not as alternatives you pick between.

For B2B cold calling, the picture gets a little simpler: the TSR's B2B exemption is real, but read that article before assuming your calls qualify, because the line between B2B and B2C isn't always obvious.

What did the 2024 TSR amendments change, specifically for AI voice calls?

The FTC finalized amendments to the TSR in 2024 that make up the biggest change to the rule in years ^[1]. The central addition: explicit treatment of AI-generated voice calls.

Before the 2024 update, the TSR banned prerecorded messages without prior written consent, but "prerecorded" was understood to mean audio recorded in advance and played back. AI voice tools that synthesize speech in real time sat in a gray zone. The 2024 amendments closed that gap by defining AI-generated voice calls as equivalent to prerecorded messages for TSR purposes, whether the audio was recorded beforehand or synthesized live.

The practical effect is simple. If your team uses or is weighing an AI voice platform for outbound sales calls to consumers, those calls require prior written consent under the TSR, the same as a prerecorded robocall. "Prior written consent" means written consent obtained before the call, not a verbal yes during the call itself.

The 2024 amendments also addressed call abandonment for AI-driven campaigns, clarifying that the two-second connection rule and the 3-percent abandonment cap apply whether a human or an AI agent runs the call.

See the dedicated article on the FTC Telemarketing Sales Rule, B2B calls, and AI voice in 2024 for a detailed breakdown of what changed and what teams need to do now.

Nobody has full data on how many enforcement actions will follow from the AI provisions specifically. The FTC has flagged AI fraud as a priority in its 2024 and 2025 policy statements, but case filings under the new provisions are still accumulating ^[4][5].

Does the TSR apply to B2B calls, and where is the line?

Generally no. The TSR exempts calls "in which the consumer is not present" and calls between businesses ^[2]. In plain terms: a salesperson at Company A calling the purchasing department at Company B to sell software licenses is usually outside the TSR's reach.

But the exemption has edges that matter:

• If the "business" is a sole proprietor who is also the consumer, the call may still be covered, especially if the product serves personal as well as business purposes.
• If an outbound call to a business line is really an attempt to reach individual employees about personal financial products (common in some insurance and benefit offerings), the TSR can apply.
• The TSR's fraud prohibitions at 16 CFR 310.3 reach business-to-business transactions in some circumstances, particularly sales of business services where deceptive misrepresentation occurs.

Here's the cleaner rule of thumb. If you're selling to a decision-maker at a real company, and the product serves a genuine business purpose, you're likely outside the TSR. If there's any doubt about whether the buyer is acting as a consumer or a business, treat the call as TSR-covered.

This matters because what is cold calling in sales looks meaningfully different depending on whether your list is B2B or B2C. The B2B exemption affects your scrubbing obligations, your disclosure requirements, and your consent obligations all at once.

What records does the TSR require you to keep, and for how long?

The TSR's recordkeeping requirements sit at 16 CFR 310.5. Sellers and telemarketers have to keep the following for 24 months from the date the record is produced ^[2]:

• Advertising and promotional materials.
• Records of all consumer complaints and refund requests.
• Names and addresses of all prize recipients and the prize awarded.
• The name and address of each credit card processor or payment processor used.
• A copy of all scripts, outlines, and materials used by telemarketers.
• Records of all verifiable authorization (signed or electronically signed authorizations, voice recordings of authorization).

That 24-month window is a floor, not a ceiling. If you're in litigation or reasonably expect it, you are legally required to preserve records past that period. Destroying records after an FTC investigative demand is a separate legal problem.

Practically, this means your CRM needs to log call disposition, and your team needs a process for retaining consent documentation. A call recording that proves consent is only useful if you can find it two years later tied to a specific phone number and date. Most teams that lose enforcement cases don't lose because they failed to get consent. They lose because they can't prove they had it.

LeadCompliant's compliance kit includes a recordkeeping checklist template that maps to 16 CFR 310.5's requirements, which is a reasonable place to start if you're building this from scratch.

What should a small outbound team actually do right now to be TSR-compliant?

If you're running a small team calling consumers, here's what matters most, in descending order of urgency.

First, subscribe to the National DNC Registry and scrub your lists before every campaign. This is non-negotiable and the most common source of TSR violations. The FTC's telemarketing.donotcall.gov portal is where you register and download data ^[3]. You pay per area code above the free tier for small organizations. If your list has 50,000 numbers and you scrub monthly, the cost is modest. Skipping it can cost $51,744 per call.

Second, enforce your calling hours in your dialer settings, more than in a policy document. Dialers that ignore the consumer's local time zone create violations automatically. Map every number to its time zone before it loads into your dialer.

Third, write a company-specific DNC policy, train your reps on it, and document both. The TSR's safe harbor for Registry violations requires written procedures and documented training. Without them, the safe harbor doesn't apply.

Fourth, audit your call scripts against the disclosure requirements. Seller identity, call purpose, and nature of the offer belong at the start of the call. If your opener is a hook that delays disclosure until after the consumer is engaged, revise it. A compliant opener doesn't have to sound robotic. It just has to identify who you are and why you're calling before you start pitching.

Fifth, if you're using or piloting AI voice tools for outbound consumer calls, treat them as prerecorded messages under both the TSR and the TCPA. Get written consent before calling. There is no workaround under current law.

For a broader operational checklist covering both TSR and TCPA, LeadCompliant's free compliance kit is a practical starting point. Use the free DNC checker tools to spot-verify numbers before campaigns go out.

What the telemarketing sales rule is designed to do, and what it costs to ignore it

The TSR exists because outbound telephone sales created a specific pattern of consumer harm that older law didn't handle well: high-pressure tactics, deceptive claims, and payment methods built to be hard to reverse, all delivered straight to people in their homes ^[1]. Congress gave the FTC authority to write conduct rules rather than rely on case-by-case enforcement, because the scale of the problem needed something more systematic.

The rule's design reflects that history. Every major provision maps to a documented harm. Calling-hour limits address harassment. DNC obligations address unwanted contact. Disclosure requirements address deception. Payment restrictions address fraud. Understanding why each rule exists makes it easier to build a program that actually works instead of one that games the letter of the text.

What it costs to ignore the rule: the financial exposure is real, but for small teams the reputational hit may matter more. An FTC enforcement action is public. It shows up in press releases and in the FTC's case database. For a small sales operation, being named in an FTC telemarketing action ends customer trust and often the business itself. The per-call penalties are the headline number, but the real cost of a serious TSR action, once you add legal defense, remediation, and lost business, runs into the hundreds of thousands even on settlements that look modest on paper ^[4][5].

For more on what the rule is built to accomplish, see the dedicated piece on what the telemarketing sales rule is designed to do.

This article is for informational purposes only and is not legal advice. If you face a specific compliance question or an FTC investigation, consult a licensed attorney.

Frequently asked questions

Does the FTC Telemarketing Sales Rule apply to text messages?

The TSR covers "telephone solicitations," and its text was written around voice calls. The FTC has not formally extended the TSR's full framework to SMS, though deceptive text-based offers can be reached under Section 5 of the FTC Act. The TCPA and FCC rules are the primary federal framework for SMS compliance. If you're running text campaigns, treat TCPA as the governing law.

Is the TSR the same as the TCPA?

No. They're separate laws with separate enforcers. The TSR is an FTC regulation under the Telemarketing and Consumer Fraud and Abuse Prevention Act. The TCPA is a federal statute (47 USC 227) enforced by the FCC and through private lawsuits. Both require DNC scrubbing and limit calling hours, but the TCPA lets individual consumers sue for $500 to $1,500 per call. The TSR has no private right of action.

What is the current maximum TSR civil penalty per violation?

As of 2024, the FTC can seek civil penalties up to $51,744 per violation, adjusted for inflation annually under the Federal Civil Penalties Inflation Adjustment Act. Each unlawful call counts as a separate violation, so a campaign with thousands of improper calls can generate penalties that multiply fast, though actual settlements are typically far below the theoretical maximum.

Can I call a number on the National DNC Registry if I have a prior business relationship?

Under the TSR, a prior business relationship (within 18 months of the consumer's last purchase or transaction, or within 3 months of a consumer inquiry) gives you a limited exemption from the National Registry. But if the consumer has asked to be placed on your company-specific DNC list, that overrides the prior business relationship exemption. You cannot use the relationship as cover after an opt-out request.

What counts as "abandoning" a call under the TSR?

A call is abandoned under 16 CFR 310.4(b) if you fail to connect the consumer to a live sales representative within two seconds of the consumer completing their greeting. Your abandonment rate has to stay at or below 3 percent of all answered calls, calculated per campaign per day. Exceeding that threshold across thousands of calls creates significant per-call penalty exposure.

Does the TSR cover nonprofit fundraising calls?

Calls made by or on behalf of a charitable organization to solicit donations are partially covered. The TSR's ban on deceptive practices and specific misrepresentations applies to charitable solicitation calls, but nonprofits calling their own prior donors have some exemptions. Telemarketing firms hired by nonprofits to make fundraising calls face fuller TSR coverage, which is why many charities negotiate specific representations into their vendor contracts.

Do I need to honor a do-not-call request made during a call, or only written requests?

Oral requests during a call are fully valid under the TSR. If a consumer says "don't call me again" at any point during a solicitation call, you must honor it. Log the number on your company-specific DNC list immediately and don't call again. The TSR does not require the request to be in writing. Many teams record calls partly to document these requests when they happen.

Are cold calls between businesses (B2B) covered by the TSR?

Generally no. The TSR exempts calls between businesses when the call is made to induce a purchase of goods or services for a genuine business purpose. But the exemption is not unlimited. Calls to sole proprietors about personal products, calls that reach individual employees about personal financial products, and deceptive B2B practices can still fall under the TSR. When in doubt, apply TSR standards.

What records do I need to keep to show TSR compliance, and for how long?

The TSR requires sellers and telemarketers to retain advertising materials, scripts, consumer complaint records, authorization records, and payment processor information for 24 months from the date of creation. This is a federal floor; litigation holds can extend it further. Consent documentation should be tied to specific phone numbers and call dates so you can retrieve it if challenged.

Can the FTC fine individual sales reps rather than the company?

Yes. The FTC has pursued individual liability in TSR enforcement actions, particularly when individual owners or managers were directly involved in or had authority to control the violating conduct. Being a "small team" doesn't protect individuals. In several documented enforcement actions, company principals were named personally alongside the corporate entity and became personally liable for penalty amounts.

How does the 2024 TSR amendment treat AI voice calls specifically?

The 2024 FTC amendments clarified that AI-generated voice in outbound sales calls is treated as equivalent to a prerecorded message under the TSR, whether the voice is synthesized in real time or played from a recording. This means prior written consumer consent is required before placing AI-voiced outbound sales calls to consumers. The two-second connection rule and 3-percent abandonment cap also apply to AI-driven call campaigns.

What is the safe harbor from TSR violations for DNC Registry errors?

The TSR offers a safe harbor if the seller can demonstrate: it has written procedures for complying with the Registry; it trains personnel on those procedures; it accessed the Registry no more than 31 days before the call; and the violation resulted from error despite these procedures. You must have all four elements documented before the call in question, not assembled after a complaint arrives.

Does the TSR require me to record calls?

The TSR does not explicitly require call recording. It does require you to keep records of verifiable consumer authorization for 24 months. In practice, recorded authorization during a call is the most defensible evidence when a consumer disputes consent. Teams that don't record often cannot prove consent, which is effectively the same as not having it in an enforcement context.

How often do I need to re-scrub my call lists against the National DNC Registry?

The TSR requires your call list to be scrubbed against the National Registry no more than 31 days before each call. This is per call, not per campaign launch. If a campaign runs for 60 days, numbers dialed in days 32 through 60 need a fresh scrub against an updated Registry download. Most compliant teams scrub monthly on a rolling basis.

Sources

1. FTC, Telemarketing Sales Rule Regulatory History and 2024 Amendments: The TSR was first effective in 1995 and was amended in 2024 to explicitly address AI-generated voice calls as equivalent to prerecorded messages.
2. eCFR, 16 CFR Part 310 Telemarketing Sales Rule: TSR calling hours (8 a.m. to 9 p.m. local), 3-percent abandonment cap, two-second connection rule, disclosure requirements, prohibited practices, payment restrictions, and 24-month recordkeeping requirements.
3. FTC, National Do Not Call Registry (donotcall.gov): Sellers must subscribe to the National DNC Registry, download data by area code, and scrub call lists no more than 31 days before initiating calls.
4. FTC, Legal Library (Rules and Enforcement Actions): Maximum TSR civil penalty is $51,744 per violation as of 2024, adjusted annually for inflation under the Federal Civil Penalties Inflation Adjustment Act.
5. FTC, Cases and Proceedings: The FTC has brought hundreds of TSR enforcement actions; common patterns include mass DNC violations, undisclosed free-trial subscriptions, and calls continuing after opt-out requests.
6. FTC, Complying with the Telemarketing Sales Rule (Business Guidance): The TSR has no private right of action; only the FTC or state attorneys general may bring TSR enforcement cases, distinguishing it from the TCPA which allows individual consumer lawsuits.
7. Congress.gov, Telemarketing and Consumer Fraud and Abuse Prevention Act (15 USC 6101 et seq.): Congress granted the FTC authority to promulgate the Telemarketing Sales Rule through the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994.
8. FTC, Complying with the Telemarketing Sales Rule (Business Guidance): The TSR's safe harbor for DNC Registry violations requires written procedures, documented staff training, and Registry access within 31 days of the call.
9. FTC, Complying with the Telemarketing Sales Rule (Recordkeeping): TSR requires sellers to retain scripts, authorization records, complaint records, and payment processor records for 24 months from the date of creation under 16 CFR 310.5.