Telemarketing Sales Rule prohibited acts: what you cannot do

Last updated 2026-07-09

What is the Telemarketing Sales Rule and who does it cover?

The Telemarketing Sales Rule, or TSR, is a federal regulation the Federal Trade Commission issued under the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994 ^[1]. It lives at 16 CFR Part 310. It has been amended several times, most notably in 2003 when the national Do Not Call Registry launched, and again in 2010, 2012, and 2015 as the prerecorded call and debt relief rules tightened.

The TSR covers any "plan, program, or campaign" to sell goods or services through interstate phone calls ^[2]. That language reaches further than it looks. Dial from one state, reach a customer in another, you're covered. Use a lead vendor who dials for you, and you may be on the hook as the "seller" even if you never touch the phone.

Who gets a pass? Calls made in response to a consumer's request, most business-to-business calls (with a narrow exception for credit card merchant solicitations), and some regulated industries like banks and common carriers have partial exemptions. Those exemptions have sharp edges. A consumer who calls you to ask about a product hasn't handed you a license to pitch them a second, unrelated product on the same call.

The rule covers both sellers (the companies whose products get sold) and telemarketers (the people or firms placing the calls). The FTC holds both responsible. That's why handing your dialing to a third-party call center does not wall you off from liability ^[2].

What acts does the Telemarketing Sales Rule specifically prohibit?

The TSR's prohibited acts split into two buckets: deceptive acts and abusive acts. Section 310.3 covers deception. Section 310.4 covers abuse. Here's what each one actually says.

Deceptive acts under Section 310.3 ^[2]

The rule bans any false or misleading statement about the goods or services being sold. That covers price, quantity, material restrictions, refund policies, and the terms of any prize offer. It also bans misrepresenting the seller's affiliation with any government entity or charity. A telemarketer can't claim a call comes from the IRS, a veterans' charity, or a federal lottery when it doesn't.

The rule also bans "credit card laundering", which means submitting charges to a payment processor without the account holder's authorization.

Materially false statements about the nature of the offer, the total cost, restrictions on getting a refund, or the odds of winning a prize all count as deceptive acts.

Abusive acts under Section 310.4 ^[2]

This is where most outbound sales teams get burned. The abusive acts include:

1. Calling anyone on the National Do Not Call Registry without their express written agreement to hear from your specific company. 2. Calling before 8 a.m. or after 9 p.m. in the consumer's local time zone. 3. Abandoning more than 3 percent of calls answered by a live person in any 30-day period, per campaign (for calls placed with auto-dialers or prerecorded messages). 4. Failing to transmit caller ID. You can't block or spoof your number. 5. Threats, intimidation, or profane language. 6. Calling a person who already told you not to call them. 7. Using an auto-dialer or prerecorded message to call a cell phone, pager, or emergency line without prior express consent. 8. Demanding payment before delivering certain credit repair, debt relief, advance fee loan, or prize recovery services.

That last one catches a lot of firms in financial services and debt settlement. The TSR's fee ban for debt relief is near-absolute: you can't collect a dime until you've actually settled or resolved the debt ^[3].

For how cold calling plays out under these rules day to day, that article covers the operational side.

What are the TSR's rules on calling hours and abandoned calls?

Two of the most-violated TSR provisions are also the most mechanical, which means there's almost no excuse for blowing them.

Calling hours. Section 310.4(c) bans calls before 8:00 a.m. or after 9:00 p.m. in the consumer's local time. The word that matters is "local", meaning their time zone, not yours. A team dialing from New York can't ring a customer in California at 7:45 a.m. Eastern. That's 4:45 a.m. Pacific. Your dialer should pull time-zone data at the record level, not run one cutoff across your whole list ^[2].

Most compliant teams build in a buffer. They start at 8:05 or 8:10 local and stop at 8:50 p.m. so a call that runs long doesn't cross the line.

Abandoned call rate. Section 310.4(b)(1)(iv) lets auto-dialed campaigns abandon no more than 3 percent of answered calls in any rolling 30-day period, per campaign. A call counts as abandoned when the consumer answers and no live agent is available within two seconds of the consumer finishing their greeting. When you do abandon a call, you have to play a recorded message that states the seller's name and phone number and lets the consumer opt out of future calls ^[2].

Three percent sounds generous. Run high-volume dialing at a 5:1 dial-to-agent ratio and you can hit that ceiling fast. Serious compliance teams pull this report weekly, not monthly.

The abandoned call rule works differently for prerecorded calls. The FTC's position is that a prerecorded call playing without a live agent has to satisfy separate consent requirements, not lean on the 3 percent safe harbor.

How does the TSR's Do Not Call rule work, and what are the exceptions?

Section 310.4(b)(1)(iii)(B) of the TSR bans calling any number on the National Do Not Call Registry ^[2]. The FTC runs the registry and enforces it jointly with the FCC, which operates its own parallel DNC rules under the TCPA. For outbound teams, the two regimes overlap heavily, and violating one usually means violating both.

Three real exceptions let you call a number that sits on the DNC Registry.

Established business relationship (EBR). If the consumer bought something from you within the past 18 months, or made an inquiry within the past three months, you can keep calling. But the moment they tell you to stop, the EBR evaporates. One warning, then it's a violation.

Express written agreement. The consumer signed (on paper or electronically) an agreement that specifically authorizes your company to call. The TSR requires that agreement to include your company's name, the consumer's phone number, and the consumer's signature ^[2]. A checkbox buried in terms of service almost certainly doesn't qualify. Neither does consent collected by a lead aggregator if your company's name never appeared in the consent language.

Personal relationship. You know the person. This exemption is basically useless for business callers.

Internal DNC requests stack on top of the registry. If a consumer tells your agent not to call, you have to honor that within 30 days and keep the number on your internal suppression list for at least five years ^[2]. Most compliant teams suppress it the same day.

Building or auditing your cold call process? Scrub against both the national registry and your internal DNC list before every campaign. No exceptions.

What are the TSR's rules on prerecorded messages and robocalls?

The TSR and TCPA overlap most directly here, and the rules run strictest here too.

Section 310.4(b)(1)(v) of the TSR bans initiating a prerecorded call to any person without their "prior express written consent" ^[2]. The FTC uses that phrase the same way the FCC does under the TCPA: the consent has to be in writing, has to be signed, has to disclose that the consumer will get prerecorded calls, and has to include the number calls may go to.

There's no EBR exception for prerecorded calls. Past business with someone does not let you robo-call them. That's a bright line.

When a prerecorded call is allowed, Section 310.4(b)(1)(v) also requires the message to disclose who's selling, why they're calling, and offer an automated opt-out that works during the call, more than a callback ^[2]. If your message says "press 9 to be removed" and that function doesn't work, that's a separate violation.

AI outbound gets thornier. When a platform uses a synthetic or cloned voice, the FTC treats those calls under the same framework as prerecorded messages, and the FCC issued a declaratory ruling in February 2024 confirming that AI-generated voices in robocalls need prior express written consent ^[4]. The ruling states that calls using such technology are "regulated by the TCPA." If you're running AI cold calling, you need written consent before a single call goes out.

What are the TSR's payment and fee prohibitions?

Section 310.4(a) lists the payment acts that are flatly banned ^[2]. These bite hardest for companies in credit repair, debt settlement, mortgage relief, advance-fee lending, and prize promotion.

Debt relief services. A telemarketer selling debt relief can't collect any fee until two things happen: the debt has been settled or resolved, and the consumer has made at least one payment to the creditor under that settlement. This took effect in October 2010, and the FTC enforces it hard. Companies that charged monthly account maintenance fees before settling anything have drawn enforcement actions ^[3].

Credit repair services. Section 310.4(a)(2) bans collecting payment for credit repair until the promised results actually land.

Advance fee loans. Promising to get a consumer a loan in exchange for an upfront fee is banned. The ban covers any fee charged before the loan is delivered.

Prize promotions. You can't require payment before delivering a prize, and you can't misrepresent the odds. Saying "you've been selected" implies certainty where there is none.

These payment rules stand apart from any deception. Even if every other representation you make is dead accurate, charging an upfront fee in these categories is itself a violation. That's what makes Section 310.4(a) a strict liability provision in practice.

What are the TSR's caller ID and identity disclosure requirements?

Section 310.4(a)(8) requires telemarketers to promptly disclose, truthfully and clearly, who the seller is, that the call's purpose is to sell goods or services, and what those goods or services are ^[2].

Separately, Section 310.4(b)(1)(ii) bans blocking or misrepresenting caller ID. You have to transmit accurate caller ID, including a number the consumer can call back to reach you or opt out. A fake number, a rotation of spoofed numbers, or a blocked number all break this provision.

The Truth in Caller ID Act, enforced by the FCC under 47 USC 227(e), adds its own penalty structure at the federal level. Spoofing caller ID with intent to defraud, cause harm, or wrongfully obtain something of value can draw fines the FCC sets by rule, running into tens of thousands of dollars per violation ^[5].

Practical version: your outbound caller ID should show a real number that routes to your business, an agent, or at least a compliant callback message. If your dialing platform defaults to blocking caller ID, fix that setting before you run a single campaign.

What fines and penalties apply to TSR violations?

The FTC can seek civil penalties up to $51,744 per TSR violation ^[6]. That figure gets adjusted for inflation under the Federal Civil Penalties Inflation Adjustment Act, so the current number may read slightly higher by the time you see this. Always confirm the live figure on the FTC's civil penalties page.

Each illegal call typically counts as one violation. Run a campaign that makes 10,000 calls to numbers on the Do Not Call Registry and the theoretical maximum exposure is $517 million. The FTC rarely chases the theoretical ceiling. It has pulled nine-figure settlements from large violators.

State attorneys general can sue under the TSR too, and can add their own civil penalties under state law on top. Section 310.7 authorizes state AG actions for violations affecting residents of their state ^[2].

Private individuals can't sue directly under the TSR the way they can under the TCPA, which grants a private right of action at 47 USC 227(c)(5) for DNC violations. But a TSR violation often rides alongside a TCPA violation, and TCPA plaintiffs can use TSR violations as evidence of willfulness, which pushes statutory damages from $500 per call to $1,500 per call ^[7].

The chart below shows the key thresholds every outbound team should have memorized.

How does the TSR interact with the TCPA?

The TSR and the TCPA are separate laws with heavy overlap. Knowing where they split matters for how you build compliance.

The TCPA (47 USC 227) is enforced by the FCC and grants a private right of action ^[7]. The TSR is enforced by the FTC and state AGs; consumers can't sue directly. A call that breaks both laws exposes you to FTC enforcement plus private TCPA litigation at once. That's the worst case plaintiff attorneys hunt for.

Here's where they diverge most.

Auto-dialer rules. The TCPA's definition of an "automatic telephone dialing system" (ATDS) got fought over in court for years, with the Supreme Court narrowing it in Facebook v. Duguid in 2021 ^[10]. The TSR's auto-dialer provisions center on the abandoned call rate and caller ID rules and skip the ATDS analysis entirely.

Consent standards. Both laws require "prior express written consent" for prerecorded calls to cell phones, but the FCC's and FTC's versions carry slightly different technical requirements. Consent that satisfies both at once is the safe play.

Business-to-business calls. The TCPA has limited B2B exemptions. The TSR's are somewhat broader, though still not unlimited.

Inbound calls. The TCPA can reach inbound calls that trigger auto-responses. The TSR generally doesn't apply to inbound calls from consumers.

Want the full picture of how cold calling sits between these two regimes? That linked guide runs both in parallel.

What records does the TSR require you to keep?

Section 310.5 of the TSR requires sellers and telemarketers to keep specific records for 24 months ^[2]. Those records include:

• Advertising and promotional materials for any good or service offered
• Sales records, including the name and address of every consumer who bought
• Employee records for people involved in telemarketing
• Verifications of sales (the TSR requires sellers of certain goods to confirm the transaction with the consumer and record that confirmation)
• Consumer complaints and refund requests
• Documentation of express written agreements obtained for prerecorded calls or DNC exceptions

The 24-month clock runs from the date the record was created or the date the last telemarketing activity happened, whichever is later. In practice, many compliance teams hold records three to five years, because TCPA private suits can land long after the call and state statutes of limitation vary.

Verification records deserve a spotlight. Selling something in a high-risk category (credit repair, debt settlement, investment opportunities)? The TSR requires you to record the consumer's express oral authorization before you process payment. That recording is more than good hygiene. It's legally required, and it's your first line of defense in an FTC investigation.

LeadCompliant's compliance kit includes a records-retention checklist mapped to Section 310.5, which works as a starting template when you build your documentation process.

What's the best way to audit your outbound process against the TSR?

A TSR audit doesn't have to be a slog. The whole exercise answers one question: can I prove, for every call we made, that it was legal? If the answer is no for any category of calls, that's your gap.

Start with list hygiene. Pull a sample of 500 numbers you dialed in the last 30 days and check them against the National DNC Registry. The FTC gives registry access to telemarketers at donotcall.gov ^[8]. If any of those numbers sit on the registry and you can't document an EBR or express written consent for each, you have real exposure.

Next, check your dialer settings. What time-zone logic does your platform run? What's your reported abandoned call rate for the last 30 days? Is caller ID transmitting accurately on every call? Get your dialer vendor to hand you these logs in writing.

Then look at consent documentation. For any customer who got a prerecorded call, or whose number was on the DNC Registry, where's the signed consent record? Who collected it, when, and what exactly did it say? Using lead vendors? Request copies of the consent language they show consumers before they resell the lead to you.

Finally, review your scripts. The FTC has pursued cases where agents made technically true but misleading statements about pricing or restrictions. Running your cold calling scripts through a compliance review once a quarter is a cheap way to catch deceptive phrasing before the FTC does.

For a structured start, LeadCompliant offers a free TSR compliance checklist at leadcompliant.com covering list scrubbing, consent documentation, dialer settings, and recordkeeping in one place.

Are there TSR provisions specifically about prize promotions and upselling?

Yes, and they're worth knowing even if you never run sweepstakes, because some upsell structures accidentally look like prize promotions.

Section 310.3(a)(1) of the TSR bans misrepresenting the odds of winning a prize or the conditions required to claim one ^[2]. Tell a consumer they've "won" something that everyone who answers gets, then require a purchase to receive it, and that's a prohibited misrepresentation.

Section 310.4(d) goes further. It requires prompt disclosures before the consumer pays anything: the odds of winning, that no purchase is necessary, and how to obtain the prize without a purchase ^[2].

On upselling: Section 310.3(a)(1) bans misrepresenting the cost of any good or service. If an agent quotes one price on the call and a different charge hits the consumer's card, that's a TSR violation regardless of what the fine print said. Courts have found that oral representations during a sales call can create binding terms that override written terms the consumer never meaningfully read.

The FTC's guidance on all this is clearer than most people expect. The commission's business guidance on the Telemarketing Sales Rule at ftc.gov walks through each category with examples ^[3].

Frequently asked questions

Can I call cell phones under the TSR?

The TSR itself doesn't ban calling cell phones the way the TCPA does, but the TCPA applies at the same time and bans auto-dialed or prerecorded calls to cell phones without prior express written consent. In practice, most cell-phone calls by outbound sales teams have to satisfy both the TSR and TCPA. Manual, human-dialed calls to cell phones carry less TCPA risk but still must obey TSR rules on hours, DNC, and disclosure.

What is the TSR's definition of a 'telemarketer' versus a 'seller'?

The TSR defines a seller as any person who provides goods or services in exchange for payment. A telemarketer is any person who, on behalf of a seller, initiates or receives calls to sell those goods or services. A company can be both at once. The FTC holds sellers liable for their telemarketers' violations even when the dialing is outsourced, so vetting your call center vendors is part of your own compliance obligation.

Does the TSR apply to B2B calls?

Mostly not. The TSR exempts calls between businesses within an established business relationship. But the exemption has limits. Credit card merchant solicitations made to businesses are covered. Calls that look B2B but actually reach consumers at home or on personal lines can be covered too. When in doubt, treat the call as consumer-facing until you can confirm otherwise.

How does the TSR's established business relationship exception work?

An EBR exists when a consumer bought from you within the past 18 months, or made an inquiry within the past three months. It lets you call that consumer even if their number sits on the DNC Registry. The EBR ends the second the consumer tells you to stop. After that, any further call is a violation. You also have to honor internal DNC requests within 30 days and keep that suppression for at least five years.

What must an outbound call disclose under the TSR?

Promptly on an outbound call, the TSR requires the telemarketer to disclose the seller's identity, that the purpose is to sell goods or services, and the nature of those goods or services. For prize promotions, Section 310.4(d) also requires disclosing the odds of winning and any purchase requirements. These disclosures have to be clear and truthful, not buried at the end of a long pitch.

What happens if a lead vendor provides a number that's on the DNC list?

You're still liable. The TSR and TCPA put the compliance obligation on the seller, more than the telemarketer or lead vendor. If you dial a number on the DNC Registry and can't show express written consent or a valid EBR, the fact that a lead vendor handed you the number is not a defense. Scrub any lead list against the national registry and your internal DNC file yourself before dialing.

What is the TSR's abandoned call rule and what counts as an abandoned call?

A call counts as abandoned when a consumer answers and no live agent connects within two seconds of the consumer finishing their greeting. The TSR caps abandoned calls at 3 percent of all calls answered by a live person in any 30-day period, measured per campaign. When a call is abandoned, you must play a recorded message identifying the seller and giving an opt-out number. Crossing the 3 percent line is an abusive act under Section 310.4(b).

Can the FTC pursue individuals personally for TSR violations?

Yes. The FTC regularly names company owners, officers, and managers as individual defendants in TSR actions when those people had authority to control the violating practices. Personal liability means personal assets are at risk, more than the company's. That's one reason TSR compliance needs buy-in from leadership, more than the compliance team.

Does the TSR cover text messages?

The TSR was written for voice calls and doesn't explicitly cover SMS. Text compliance is governed mainly by the TCPA and the FCC's implementing rules. That said, the TSR's deception and payment prohibitions can reach marketing done by text if the text is part of a broader telemarketing plan. For SMS compliance, the TCPA and FCC consent rules are the primary framework to follow.

How often is the TSR's civil penalty amount updated?

The FTC adjusts civil penalty maximums annually under the Federal Civil Penalties Inflation Adjustment Act. The maximum for TSR violations is $51,744 per violation as of recent FTC filings, but the number changes each January. Check the FTC's civil penalties page at ftc.gov before you rely on any specific figure for legal or budgeting purposes.

What's the difference between the TSR and the TCPA for outbound callers?

The TCPA is enforced by the FCC and allows private lawsuits at $500 to $1,500 per call. The TSR is enforced by the FTC and state AGs, with no direct private right of action. Both require written consent for prerecorded calls to cell phones, and both ban calling DNC numbers without an exception. A single call can break both, stacking exposure from the FTC, a state AG, and private TCPA plaintiffs at the same time.

What records do I need to keep to prove TSR compliance?

Section 310.5 requires keeping advertising materials, sales records, employee records, consumer complaint logs, and consent documentation for 24 months. For prerecorded calls and DNC exceptions, you also need the signed consent documents showing the consumer's name, phone number, and your company's name. Most experienced compliance teams keep everything at least three years to cover state variation in statutes of limitation.

Are nonprofit organizations subject to the TSR?

Nonprofit solicitations by the nonprofit itself are generally exempt from the TSR. But if a for-profit telemarketer calls on behalf of a nonprofit, that telemarketer is covered even when the nonprofit is not. The FTC has pursued for-profit charity fundraisers heavily under this framework. If you're a call center making charitable solicitation calls for a nonprofit client, the TSR applies to you.

Sources

1. FTC, Telemarketing and Consumer Fraud and Abuse Prevention Act (15 USC 6101-6108): The TSR was issued by the FTC under authority granted by the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994
2. FTC, 16 CFR Part 310 - Telemarketing Sales Rule (full rule text): TSR prohibited acts including calling hours, DNC, abandoned calls, caller ID, consent for prerecorded calls, and recordkeeping requirements
3. FTC, Business Guidance on the Telemarketing Sales Rule: Debt relief services covered by the TSR cannot collect fees until the debt is settled and the consumer has made at least one payment under the settlement
4. FCC, Truth in Caller ID Act rules and enforcement (47 USC 227(e)): Spoofing caller ID with intent to defraud can draw FCC fines running into tens of thousands of dollars per violation
5. FTC, Civil Penalty Amounts: Civil penalty maximum for TSR violations is $51,744 per violation, adjusted for inflation under the Federal Civil Penalties Inflation Adjustment Act
6. Legal Information Institute (Cornell Law), 47 USC 227 - Telephone Consumer Protection Act: The TCPA grants a private right of action at 47 USC 227(c)(5) for DNC violations with statutory damages of $500 to $1,500 per call
7. FTC, National Do Not Call Registry: The FTC offers registry access to telemarketers for DNC scrubbing
8. FTC, Cases and Proceedings database: FTC enforcement actions against TSR violators including penalty amounts in select cases
9. US Supreme Court, Facebook Inc. v. Duguid, 592 U.S. 395 (2021): The Supreme Court narrowed the TCPA definition of an automatic telephone dialing system in Facebook v. Duguid in 2021