Federal Register, Volume 84 Issue 97 (Monday, May 20, 2019)

[Federal Register Volume 84, Number 97 (Monday, May 20, 2019)]
[Notices]
[Pages 22844-22848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10388]

[[Page 22844]]

=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

Information Collection Activities; Proposed Collection; Comment
Request

AGENCY: Federal Trade Commission (``Commission'' or ``FTC'').

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The FTC plans to ask the Office of Management and Budget
(``OMB'') to extend for an additional three years the current Paperwork
Reduction Act (``PRA'') clearance for information collection
requirements contained in the Telemarketing Sales Rule (``TSR''). That
clearance expires on August 31, 2019.

DATES: Comments must be submitted on or before July 19, 2019.

ADDRESSES: Interested parties may file a comment online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``TSR PRA Comment, FTC
File No. P094400'' on your comment, and file your comment online at
https://www.regulations.gov by following the instructions on the web-
based form. If you prefer to file your comment on paper, mail your
comment to the following address: Federal Trade Commission, Office of
the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex J),
Washington, DC 20580, or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Constitution Center,
400 7th Street SW, 5th Floor, Suite 5610 (Annex J), Washington, DC
20024.

FOR FURTHER INFORMATION CONTACT: Patricia Hsue, Staff Attorney,
Division of Marketing Practices, Bureau of Consumer Protection, Federal
Trade Commission, Room CC-8528, 600 Pennsylvania Ave. NW, Washington,
DC 20580, or by telephone to (202) 326-3132.

SUPPLEMENTARY INFORMATION: The TSR, 16 CFR 310, TSR, (OMB Control
Number 3084-0097) implements the Telemarketing and Consumer Fraud and
Abuse Prevention Act, 15 U.S.C. 6101-6108 (``Telemarketing Act''), as
amended by the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act
(``USA PATRIOT Act''), Public Law 107056 (Oct. 25, 2001). As required
by the Telemarketing Act, the TSR mandates certain disclosures for
telephone sales and requires telemarketers to retain certain records
regarding advertising, sales, and employees. The required disclosures
provide consumers with information necessary to make informed
purchasing decisions. The required records are to be made available for
inspection by the Commission and other law enforcement personnel to
determine compliance with the Rule. Required records may also yield
information helpful to measuring and redressing consumer injury
stemming from Rule violations.
In 2003, the Commission amended the TSR to include certain new
disclosure requirements and to expand the Rule in other ways. See 68 FR
4580 (Jan. 29, 2003). The Rule was amended to cover upsells \1\ (not
only outbound calls, but also inbound calls) and additional
transactions such as solicitation by telephone of charitable donations
by third-party telemarketers. The amendments established the National
Do Not Call Registry (``Registry''), permitting consumers to register,
via either a toll-free telephone number or the internet, their
preference not to receive certain telemarketing calls.\2\ Accordingly,
under the TSR, most sellers and telemarketers are required to refrain
from calling consumers who have placed their numbers on the
Registry.\3\ Moreover, sellers and telemarketers must periodically
access the Registry to remove from their telemarketing lists the
telephone numbers of those consumers who have registered.\4\
---------------------------------------------------------------------------

\1\ An ``upsell'' is the solicitation in a single telephone call
of the purchase of goods or services after an initial transaction
occurs. The solicitation may be made by or on behalf of a seller
different from the seller in the initial transaction, regardless of
whether the initial transaction and the subsequent solicitation are
made by the same telemarketer (``external upsell''). Or, it may be
made by or on behalf of the same seller as in the initial
transaction, regardless of whether the initial transaction and
subsequent solicitation are made by the same telemarketer
(``internal upsell'').
\2\ 68 FR 4580 (Jan. 29, 2003). The Registry applies to any
plan, program, or campaign to sell goods or services through
interstate phone calls. This includes telemarketers who solicit
consumers, often on behalf of third-party sellers. It also includes
sellers who provide, offer to provide, or arrange to provide goods
or services to consumers in exchange for payment. It does not limit
calls by political organizations, charities, or telephone survey
companies.
\3\ 16 CFR 310.4(b)(1)(iii)(B).
\4\ 16 CFR 310.4(b)(3)(iv). Effective January 1, 2005, the
Commission amended the TSR to require telemarketers to access the
Registry at least once every 31 days. See 69 FR 16368 (Mar. 29,
2004).
---------------------------------------------------------------------------

In 2008, the Commission amended the TSR regarding prerecorded
calls, 16 CFR 310.4(b)(1)(v), and call abandonment rate calculations,
16 CFR 310.4(b)(4)(i).\5\ The amendment regarding prerecorded calls
added additional information collection requirements.\6\ Specifically,
the amendment authorized sellers and telemarketers to place outbound
prerecorded calls to consumers only if: (1) The seller has obtained
written agreements from those consumers to receive prerecorded
telemarketing calls after a clear and conspicuous disclosure of the
purpose of the agreement; and (2) the call discloses and provides an
automated telephone keypress or voice-activated opt-out mechanism at
the outset of the call.
---------------------------------------------------------------------------

\5\ See 73 FR 51164 (Aug. 29, 2008).
\6\ By contrast, the revised standard for measuring the call
abandonment rate did not impose any new or affect any existing
reporting, recordkeeping or third-party disclosure requirements
within the meaning of the PRA. That amendment relaxed the prior
requirement that the abandonment rate be calculated on a ``per day
per campaign'' basis by permitting, but not requiring, its
calculation over a 30-day period, as industry requested.
---------------------------------------------------------------------------

In 2010, the Commission published additional amendments taking
effect that year to require specific new disclosures in the sale of a
``debt relief service,'' as that term is defined in Section 310.2(m) to
include for-profit credit counseling services, debt settlement, and
debt negotiation services. The amendments result in PRA burden for all
covered entities--both new and existing respondents--that engage in
telemarketing of these services.

Burden Statement

Estimated Annual Hours Burden: 1,233,817 Hours

The estimated burden for recordkeeping compliance is 14,061 hours
for all industry members affected by the Rule. The estimated burden for
the requisite disclosures for both live telemarketing calls and
prerecorded calls is 1,219,428 hours for all affected industry members.
Estimated burden for reporting requirements is 328 hours. Thus, the
total PRA burden is 1,233,817 hours. These estimates are explained
below.
Number of Respondents
In calendar year 2018, 18,714 telemarketing entities accessed the
Do Not Call Registry; however, 561 were ``exempt'' entities obtaining
access to data.\7\ Of the 18,153 non-exempt entities, 13,131 sellers
and 5,022 telemarketers accessed the Registry. Of those, however, 8,447
sellers and 3,145 telemarketers obtained data for just one state. Staff
assumes that these 11,592 entities are operating solely intrastate, and
thus would not be subject to the

[[Page 22845]]

TSR.\8\ Therefore, Staff estimates that 6,561 telemarketing entities
are currently subject to the TSR, of which 4,684 (13,131--8,447) are
sellers and 1,877 (5,022--3,145) are telemarketers.\9\
---------------------------------------------------------------------------

\7\ An exempt entity is one that, although not subject to the
TSR, voluntarily chooses to scrub its calling lists against the data
in the Registry.
\8\ These entities would nonetheless likely be subject to the
Federal Communications Commission's (``FCC'') Telephone Consumer
Protection Act regulations, including the requirement that entities
engaged in intrastate telephone solicitations access the Registry.
\9\ For purposes of these calculations, staff assumes that
telemarketers making prerecorded calls download telephone numbers
listed on the Registry, rather than conduct online searches, because
the latter may consume much more time. Other telemarketers not
placing the high-volume of automated prerecorded calls may elect to
search online, rather than to download.
---------------------------------------------------------------------------

(a) Recordkeeping Hours
Staff estimates that the 6,561 telemarketing entities subject to
the Rule each require approximately one hour per year to file and store
records required by the TSR for an annual total of 6,561 burden hours.
The Commission staff also estimates that 75 new entrants per year would
need to spend 100 hours each developing a recordkeeping system that
complies with the TSR for an annual total of 7,500 burden hours. These
figures, based on prior estimates, are consistent with staff's current
knowledge of the industry. Thus, the total estimated annual
recordkeeping burden for new and existing telemarketing entities \10\
is 14,061 hours.
---------------------------------------------------------------------------

\10\ The recordkeeping requirements for prerecorded calls are de
minimis, and are subsumed within the PRA estimates above for
existing and new telemarketing entities. As in its prior estimates,
staff continues to believe that any ongoing incremental burden on
sellers to create and retain electronic records of written
agreements by new customers to receive prerecorded calls should not
be material since the agreements may be obtained and recorded
electronically pursuant to the Electronic Signatures In Global and
National Commerce Act (commonly, ``E-SIGN''). Although telemarketers
(and telefunders) that place prerecorded calls on behalf of sellers
or charities must capture and transmit to the seller any requests
they receive to place a consumer's telephone number on the seller's
entity-specific do-not-call list, this obligation extends both to
live and prerecorded telemarketing calls, and is also subsumed
within the PRA estimates above.
---------------------------------------------------------------------------

(b) Disclosure Hours
Staff believes that in the ordinary course of business, a
substantial majority of sellers and telemarketers make the disclosures
the Rule requires because to do so constitutes good business practice.
To the extent this is so, the time and financial resources needed to
comply with disclosure requirements do not constitute ``burden.'' 5 CFR
1320.3(b)(2). Moreover, many state laws require the same or similar
disclosures as the Rule mandates. Thus, the disclosure hours burden
attributable solely to the Rule is far less than the total number of
hours associated with the disclosures overall. As when the FTC last
sought OMB clearance, staff estimates that most of the Rule disclosures
would be made in at least 75 percent of telemarketing calls even absent
the Rule.\11\ Accordingly, staff has continued to estimate that the
hours burden for most of the Rule's disclosure requirements is 25
percent of the total hours.
---------------------------------------------------------------------------

\11\ 78 FR at 19,485.
---------------------------------------------------------------------------

Pre-Sale Disclosures
Consistent with its past practice, staff necessarily has made
additional assumptions in estimating burden. Based on industry data and
further FTC extrapolations,\12\ staff estimates that 2.3 billion
outbound telemarketing calls are subject to FTC jurisdiction and
attributable to direct orders, that 450 million of these calls result
in direct sales,\13\ and that there are 1.8 billion inbound calls that
result in direct sales. Staff retains its longstanding estimate that,
in a telemarketing call involving the sale of goods or services, it
takes 7 seconds \14\ for telemarketers to recite the required pre-sale
disclosures plus 3 additional seconds \15\ to disclose the information
required in the case of an upsell. Staff also retains its longstanding
estimates that at least 60 percent of sales calls result in ``hang-
ups'' before the telemarketer can make all the required disclosures and
that ``hang-up'' calls allow for only 2 seconds of disclosures.\16\
---------------------------------------------------------------------------

\12\ Staff employs the methodology, assumptions, and studies it
has consistently used since their development for the 2003 TSR
amendments to determine, indirectly from external sales data and the
relative percentages of inbound and outbound calls, the number of
telemarketing calls and resulting number of sales because no call or
sales number totals are otherwise available. Staff relies on its own
prior estimates that of the $134.7 billion of sales from outbound
calls to consumers in 2012 (DMA 2013 Statistical Fact Book, at 5),
92.8% of those sales, or $125 billion, are subject to FTC
jurisdiction, with the average value of a sale being $85 and 20% of
outbound calls resulting in a sale.
\13\ For staff's PRA burden calculations, only direct sales
orders by telephone are relevant. That is, sales generated through
leads or customer traffic are excluded from these calculations
because such sales are not subject to the TSR's recordkeeping and
disclosure provisions. The direct sales transactions total of 450
million is based on an estimated 1.5 billion sales transactions from
outbound calls being subject to FTC jurisdiction reduced by an
estimated 30 percent attributable to direct orders. This percentage
estimate is derived from the only known available outside direct
sales data for telephone marketing to consumers. See DMA Statistical
Fact Book (2001), p. 301.
\14\ See, e.g., 60 FR 32,682, 32,683 (June 23, 1995); 63 FR
40,713, 40,714 (July 30, 1998); 66 FR 33,701, 33,702 (June 25,
2001); 71 FR 28,698, 28,700 (May 17, 2006); 74 FR 11,952, 11,955
(Mar. 20, 2009); 78 FR at 19,485.
\15\ 71 FR 3302, 3304 (Jan. 20, 2006); 71 FR at 28,700; 78 FR at
19,485.
\16\ See, e.g., 60 FR at 32,683; 78 FR at 19,485.
---------------------------------------------------------------------------

Staff bases all ensuing upsell calculations on the volume of
additional sales after an initial sale, with the assumption that a
consumer is unlikely to be predisposed to an upsell if he or she
rejects an initial offer--whether through an outbound or an inbound
call. Using industry information, staff assumes an upsell conversion
rate of 40% for inbound calls as well as outbound calls.\17\ Moreover,
staff assumes that consumers who agree to an upsell will not terminate
an upsell before the seller or telemarketer makes the full required
disclosures.
---------------------------------------------------------------------------

\17\ This assumption originated with industry response to the
Commission's 2003 Final Amended TSR. See 68 FR 4580, 4597 n.183
(Jan. 29, 2003). Although the comment provided an estimate
specifically regarding inbound calls, FTC staff will continue to
apply this assumption to outbound calls as well, absent the receipt
of any information to the contrary.
---------------------------------------------------------------------------

Based on the above, staff estimates that the total time associated
with these pre-sale disclosure requirements is 826,389 hours per year:
[(2.3 billion outbound calls x 40% lasting the duration x 7 seconds of
full pre-sale disclosures / 3,600 (conversion of minutes to hours) x
25% burden = 447,222 hours) + (2.3 billion outbound calls x 60%
terminated prematurely x 2 seconds of disclosures / 3,600 x 25% burden
= 191,667 hours) + (450 million outbound calls resulting in direct
sales x 40% upsell conversions x 3 seconds of related disclosures /
3,600 x 25% burden = 37,500 hours) + (1.8 billion inbound calls x 40%
upsell conversions x 3 seconds / 3,600 x 25% burden = 150,000 hours)] =
826,389 hours).
General Sales Disclosures
The TSR also requires several general sales disclosures in
telemarketing calls before the customer pays for goods or services.\18\
These disclosures include the total costs of the offered goods or
services, all material restrictions, and all material terms and
conditions of the seller's refund, cancellation, exchange, or
repurchase policies (if a representation about such a policy is a part
of the sales offer).
---------------------------------------------------------------------------

\18\ 16 CFR 310.3(a)(1)(i)-(iii).
---------------------------------------------------------------------------

Staff estimates that the general sales disclosures for
telemarketing calls require 352,513 hours annually. This figure
includes the burden for written disclosures (1,005 inbound
telemarketing entities estimated to use

[[Page 22846]]

direct mail \19\ x 10 hours \20\ per year x 25% burden = 2,513 hours),
as well as oral disclosures [(450 million outbound calls x 8 seconds /
3,600 x 25% burden = 250,000 hours) + (450 million outbound calls x 40%
upsell attempts x 20% sales conversion x 8 seconds / 3,600 x 25% burden
=20,000 hours) + (1.8 billion inbound calls x 40% upsell attempts x 20%
sales conversion x 8 seconds / 3,600 x 25% burden = 80,000 hours)] =
352,513 hours.\21\
---------------------------------------------------------------------------

\19\ Based on previous assumptions, staff estimates that of the
6,561 telemarketing entities, 3,015 conduct inbound telemarketing.
Consistent with its previous analyses, staff estimates that, of the
3,015 entities that conduct inbound telemarketing, approximately
one-third (1,005) will choose to incorporate written disclosures in
their direct mail solicitations. Because it is likely that industry
members make the requisite disclosures in direct mail solicitation
in an effort to qualify for a Rule exemption, Commission staff
believes it is appropriate to include those written disclosures in
the burden hour calculation.
\20\ FTC staff believes a typical firm will spend approximately
10 hours per year engaged in activities ensuring compliance with
this provision of the Rule; this, too, has been stated in prior FTC
notices inviting comment on PRA estimates. No comments were
received, and staff believes this estimate remains reasonable.
\21\ The percentage and unit of time measurements are FTC staff
estimates. (For more information regarding the 25% apportionment
appearing above see supra note 17 and surrounding text.)
---------------------------------------------------------------------------

Disclosures for Debt Relief Services
To estimate the time required to provide the general sales
disclosures for calls offering debt relief services, staff employs
different assumptions and calculations.\22\ Employing that analysis, as
modified in response to a public comment to account for inbound debt
relief sales,\23\ staff continues to assume that outbound calls to sell
and inbound calls to buy debt relief services are made only to
consumers who are delinquent on one or more credit cards.\24\ Staff
further assumes that each such consumer will receive one outbound call
and place one inbound call for these services.
---------------------------------------------------------------------------

\22\ 75 FR at 48,504-05.
\23\ Debt relief sales in outbound calls have always been
subject to the general sales disclosure requirements, and are
subsumed in the outbound general sales disclosure totals.
\24\ By extension, upsells on these initial calls would not be
applicable. Moreover, staff believes that few, if any, upsells on
initial outbound and inbound calls would be for debt relief.
---------------------------------------------------------------------------

To estimate the number of consumers who are delinquent on one or
more credit cards, staff assumes that couples constitute a single
decision-making unit, as do single adults (widowed, divorced,
separated, never married) within each household. According to the most
current U.S. Census Bureau data available, there are 165,015,000
decision-making units.\25\ Of these, 119,140,830 have one or more
credit cards,\26\ and there are 2,942,779 decision-making units with at
least one delinquent credit card account.\27\
---------------------------------------------------------------------------

\25\ U.S. Census Bureau, Income and Poverty in the United
States: 2017 (September 2018), Table 1, available at https://www.census.gov/content/census/en/library/publications/2018/demo/p60-263.html reflecting 127,586,000 households in 2017); U.S. Census
Bureau, Sharing a Household: Household Composition and Economic Well
Being: 2007-2010 (June 2012), Table 2, p. 4, available at https://www.census.gov/prod/2012pubs/p60-242.pdf (reflecting 37,429,000
adults living with a householder who is neither a spouse nor
cohabiting partner in 2010 and includes adults enrolled in school).
Commission staff was unable to locate more current data for the
latter source.
\26\ The estimated number of consumers with one or more credit
cards is derived by multiplying the estimated decision making units
(165,015,000) by the percentage of consumers with one or more credit
cards: 72.2%. The percentage of consumers with one or more credit
card is based on a study conducted by the Federal Reserve Bank of
Boston. See Federal Reserve Bank of Boston, Consumer Payments
Research Center, The 2009 Survey of Consumer Payment Choice (April
2011), screen pp. 8, 48 available at www.bostonfed.org/economic/ppdp/2011/ppdp1101.pdf. Commission staff have not found percentage
updates of comparable nature. Later versions of such data differ in
how they present consumer adoption of payment instruments, e.g.,
combining, rather than presenting as separate percentages, consumer
purchases through credit and charge card use.
\27\ The estimated number of consumers with a delinquent account
is derived by multiplying the estimate of consumers with one or more
credit cards (119,140,830) by the delinquency rate for credit cards
(2.47%). Board of Governors of the Federal Reserve System, Charge
Off and Delinquency Rates on Loans and Leases at Commercial Banks,
available at https://www.federalreserve.gov/releases/chargeoff/delallsa.htm (reporting a 2.47% delinquency rate for credit cards
for the second quarter of 2018).
---------------------------------------------------------------------------

Accordingly, allowing for the above-stated FTC staff estimate of
eight seconds per general sales disclosures, staff estimates further
that the general sales disclosure burden for inbound debt relief calls
is 1,635 hours (2,942,779 inbound debt relief calls to decision-making
units with at least one delinquent credit card account x 8 seconds /
3,600 x 25% burden).
Disclosures for Non-Exempt Inbound Calls
The TSR general sales disclosures must also be made by sellers and
telemarketers for inbound calls in response to ads for investment
opportunities, certain business opportunities, credit card loss
protection (``CCLP''),\28\ credit repair,\29\ loss recovery
services,\30\ and advance fee loans.\31\
---------------------------------------------------------------------------

\28\ 16 CFR 310.3(a)(1)(vi).
\29\ 16 CFR 310.4(a)(2).
\30\ 16 CFR 310.4(a)(3).
\31\ 16 CFR 310.4(a)(4).
---------------------------------------------------------------------------

Staff's estimate for each of these types of non-exempt inbound
calls is determined by comparing the number of complaints reported to
the FTC's Consumer Sentinel system in the most recent complete year to
the total number of reported fraud complaints for that year. The
resulting percentage of total fraud complaints must be adjusted to
reflect the fact that only a relatively small percentage of
telemarketing calls are fraudulent. To extrapolate the percentage of
fraudulent telemarketing calls, staff divides a Congressional estimate
of annual consumer injury from telemarketing fraud ($40 billion) \32\
by available data on total consumer and business-to-business
telemarketing sales ($310.0 billion projected for 2016),\33\ or 13%.
The two percentages are then multiplied together to determine the
percentage of the 1.8 billion annual inbound telemarketing calls
represented by each type of fraud complaint.
---------------------------------------------------------------------------

\32\ House Committee on Government Operations, The Scourge of
Telemarketing Fraud: What Can Be Done Against It, H.R. Rep. 421,
102nd Cong., 1st Sess. at 7 (Dec. 18, 1991). The FBI believes that
this estimate overstates telemarketing fraud losses as a result of
its investigations and closings of once massive telemarketing boiler
room operations. See FBI, A Byte Out of History: Turning the Tables
on Telemarketing Fraud (Dec. 8, 2010), available at https://www.fbi.gov/news/stories/2010/december/telemarketing_120810/telemarketing_120810. See also internet Crime Complaint Center, 2017
Annual Report on internet Crime (citing $1.4 billion of losses
claimed in consumer complaints for 2017), available at https://pdf.ic3.gov/2017_IC3Report.pdf.
\33\ DMA 2013 Statistical Fact Book (January 2013) projection up
through 2016, p. 5 (no associated DMA updates made or otherwise
found thereafter).
---------------------------------------------------------------------------

Thus, for the 7,631 Sentinel complaints in 2018 about investment
opportunities covered by the TSR,\34\ or 0.5% of the 1,427,563 total
fraud complaints reported that year,\35\ the general sales disclosure
burden is 2,800 hours (1.8 billion inbound calls x 0.0007 [0.005 x
0.13] x 8 seconds / 3,600). Likewise, the burden for business
opportunity sales (14,225 complaints), including complaints for multi-
level marketing/pyramids/chain letters) \36\ is 4,000 hours (1.8
billion x .001 [0.01 x

[[Page 22847]]

0.13] x 8 seconds / 3,600); for advance fee loan sales (16,027
complaints) \37\ is 4,000 hours (1.8 billion x 0.001 [0.011 x 0.13] x 8
seconds / 3,600); for credit repair sales (2,928 complaints) \38\ is
1,200 hours (1.8 billion x 0.0003 [0.002 x 0.13] x 8 seconds / 3,600);
400 hours for loss recovery services (547 complaints) \39\ (1.8 billion
x 0.0001 [0.0004 x 0.13] x 8 seconds / 3,600); and 40 hours for CCLP
sales (73 complaints) \40\ (1.8 billion x 0.00001 [0.0001 x 0.13] x 8
seconds / 3,600). The exceptions to the TSR's inbound call exemptions
add an additional 12,440 hours to the general sales disclosure burden.
---------------------------------------------------------------------------

\34\ See FTC, Consumer Sentinel Network Data Book 2018 (March
2019) (``Sentinel Data''), Appendix B3, p. 86, available at https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2018/consumer_sentinel_network_data_book_2018_0.pdf. The figure above
tallies the number of complaints under the subcategories ``Advice,
Seminars'' and ``Art\Gems\Rare Coins.'' The remaining subcategories
under the ``Investment Related'' category are not covered by either
the FTC Act or the TSR.
\35\ Sentinel Data at 8.
\36\ Sentinel Data at 85. While this total excludes
``Franchises/Distributorships'' covered by the Franchise Rule and
thus not subject to the TSR, the data cannot additionally be
segregated to omit ``Work-At-Home'' opportunities now covered by the
Business Opportunity Rule and thus also not subject to the TSR.
Staff therefore believes this total significantly overstates the
opportunities subject to the TSR.
\37\ Id.
\38\ Id.
\39\ Id.
\40\ Id.
---------------------------------------------------------------------------

Altogether, the general sales disclosure burden is 366,588 hours
(352,513 hours for outbound sales + 1,635 hours for debt relief inbound
sales + 12,440 hours for non-exempt inbound sales).
Specific Transaction Disclosures
Additional specific disclosures are required if the call involves a
prize promotion,\41\ the sale of credit card loss protection
products,\42\ an offer with a negative option feature,\43\ or the sale
of a debt relief service.\44\ Staff estimates that the specific sales
disclosures other than for debt relief services will require 22,363
hours annually [(450 million direct sales transactions from outbound
calls x 5% [estimate of percentage of sales transactions involving
prize promotions] x 3 seconds / 3,600 x 25% burden = 4,688 hours) +
(450 million direct sales transactions from outbound calls x 0.1%
[estimate of percentage of sales transactions involving CCLP] x 4
seconds / 3,600 x 25% burden = 125 hours) + (450 million sales
transactions from outbound calls x 40% attempted upsell conversions x
20% sales conversions x 0.1% [estimate of percentage of outbound calls
involving CCLP upsells] x 4 seconds x 25% burden / 3,600 = 10 hours) +
(1.8 billion inbound calls x 40% attempted upsell conversions x 20%
sales conversions x 0.1% [estimate of percentage of inbound calls
involving CCLP upsells] x 4 seconds x 25% burden / 3,600 = 40 hours) +
(450 million sales transactions from outbound calls x 10% [estimate of
percentage of outbound calls involving negative options] x 4 seconds /
3,600 x 25% burden = 12,500 hours) + (450 million sales transactions
from outbound calls x 40% attempted upsell conversions x 20% sales
conversions x 10% [estimate of percentage of outbound calls involving
negative option upsells] x 4 seconds x 25% burden / 3,600 = 1,000
hours) + (1.8 billion inbound calls x 40% attempted upsell conversions
x 20% sales conversions x 10% [estimate of percentage of inbound calls
involving negative option upsells] x 4 seconds / 3,600 x 25% burden =
4,000 hours).
---------------------------------------------------------------------------

\41\ 16 CFR 310.3(a)(1)(iv)-(v).
\42\ 16 CFR 310.3(a)(1)(vi). It is neither staff's understanding
nor belief that CCLP sales occur through inbound calls. Staff
anticipates, however, the potential for such sales in an upsell
following an inbound call.
\43\ 16 CFR 310.3(a)(1)(vii).
\44\ 16 CFR 310.3(a)(1)(viii).
---------------------------------------------------------------------------

Staff estimates that reciting the specific sales disclosures in
each debt relief sales call will take ten seconds, and therefore the
disclosure burden associated with the debt relief disclosures is 4,088
hours (2,942,779 outbound debt relief calls x 10 seconds / 3,600 x 25%
burden = 2,044 hours) + (2,942,779 inbound debt relief calls x 10
seconds / 3,600 x 25% burden = 2,044 hours).
Thus, the total specific transaction disclosure burden is 26,451
hours annually (22,363 for non-debt-relief calls) + 4,088 (for debt
relief calls).
Cumulatively, therefore, the total annual burden for all of the
disclosures is 1,219,428 (826,389 hours pre-sales disclosures + 366,588
hours general sales disclosures + 26,451 hours specific sales
disclosures).
(c) Reporting Hours
Finally, any entity that accesses the Registry must submit minimal
identifying information to the operator of the Registry. This basic
information includes the name, address, and telephone number of the
entity; a contact person for the organization; and information about
the manner of payment. The entity also must submit a list of the area
codes for which it requests information and certify that it is
accessing the Registry solely to comply with the provisions of the TSR.
If the entity is accessing the Registry on behalf of other seller or
telemarketer clients, it has to submit basic identifying information
about those clients, a list of the area codes for which it requests
information on their behalf, and a certification that the clients are
accessing the Registry solely to comply with the TSR.
As it has since the Commission's initial proposal to implement user
fees under the TSR, FTC staff estimates that affected entities will
require no more than two minutes for each entity to submit this basic
information, and anticipates that each entity will have to submit the
information annually.\45\ Based on the number of entities accessing the
Registry that are subject to the TSR, this requirement will result in
219 burden hours (6,561 entities x 2 minutes per entity). In addition,
FTC staff continues to estimate that up to one-half of those entities
may need, during the course of their annual period, to submit their
basic identifying information more than once in order to obtain
additional area codes of data. Thus, this would result in an additional
109 burden hours. Accordingly, accessing the Registry will impose a
total burden of approximately 328 hours per year.
---------------------------------------------------------------------------

\45\ See 67 FR 37,366 (May 29, 2002). The two-minute estimate
likely is conservative. The OMB regulation defining ``information''
under the PRA generally excludes disclosures that require persons to
provide facts necessary simply to identify themselves, e.g., the
respondent, the respondent's address, and a description of the
information the respondent seeks in detail sufficient to facilitate
the request. See 5 CFR 1320.3(h)(1).
---------------------------------------------------------------------------

Thus, total recordkeeping, disclosure, and reporting burden is
1,233,817 hours (14,061 hours + 1,219,428 hours + 328 hours).

Estimated Annual Labor Cost: $17,181,914

(a) Recordkeeping Labor Cost
As indicated above, staff estimates that existing telemarketing
entities require 14,061 hours, cumulatively, to maintain compliance
with the TSR's recordkeeping provisions. Applying a clerical wage rate
of $16.92/hour,\46\ recordkeeping maintenance for existing
telemarketing entities would amount to an annual cost of approximately
$237,912. Assuming also from the above a cumulative burden of 7,500
hours for 75 new telemarketing entities per year to set up compliant
recordkeeping systems (75 new entrants/year x 100 hours each), and
applying to that a skilled labor rate of $27.86/hour,\47\ cumulative
labor costs for them would approximate $208,950 yearly. Thus, the
estimated labor cost for recordkeeping associated with the TSR for both
new and existing telemarketing entities, including prerecorded and debt
relief calls, is $446,862.
---------------------------------------------------------------------------

\46\ This figure is derived from the mean hourly wage shown for
Office Clerks, General. See ``Occupational Employment and Wages--May
2018,'' Bureau of Labor Statistics, U.S. Department of Labor,
released March 29, 2019, Table 1 (``National employment and wage
data from the Occupational Employment Statistics survey by
occupation, May 2018''), available at https://www.bls.gov/news.release/ocwage.nr0.htm.
\47\ This figure is derived from the mean hourly wage shown for
``Computer Support Specialist.'' See id.

---------------------------------------------------------------------------

[[Page 22848]]

(b) Disclosure Labor Cost
The estimated annual labor cost for disclosures for all
telemarketing entities is $16,730,552. This total is the product of
applying an assumed hourly wage rate of $13.72 \48\ to the earlier
stated estimate of 1,219,428 hours pertaining to the pre-sale, general
and specific disclosures.
---------------------------------------------------------------------------

\48\ This figure is derived from the mean hourly wage shown for
Telemarketers. See supra note 57. It is applied additionally to the
ensuing calculation of reporting labor cost regarding the Registry
operator.
---------------------------------------------------------------------------

(c) Reporting Labor Cost
Estimated labor cost supplying basic identifying information to the
Registry operator is $4,500 (328 hours x $13.72 per hour).
Thus, cumulatively for both new and existing telemarketing entities
total labor costs are $17,181,914 [($446,862 recordkeeping) +
($16,730,552 disclosure) + ($4,500 reporting)].

Estimated Annual Non-Labor Cost: $4,717,991

(a) Recordkeeping
Staff believes that the capital and start-up costs associated with
the TSR's recordkeeping provisions are de minimis. Although staff
believes that most affected entities would maintain the required
records in the ordinary course of business, consistent with its prior
analyses, staff estimates that the estimated 6,561 telemarketing
entities subject to the Rule continue to spend an annual amount of $50
each on office supplies as a result of the Rule's recordkeeping
requirements, for a total recordkeeping cost burden of $328,050.
(b) Disclosure
Applying the disclosure estimates of 1,219,428 hours to an
estimated commercial calling rate of 6 cents per minute ($3.60 per
hour), staff estimates a total of $4,389,941 in telephone charges.\49\
---------------------------------------------------------------------------

\49\ Staff believes that other non-labor costs would be incurred
largely by affected entities in the ordinary course of business and,
beyond that, would not materially exceed those ordinary costs.
---------------------------------------------------------------------------

Thus, total capital and/or other non-labor costs are $4,717,991
($328,050 (office supplies) + $4,389,941 (telephone charges)).
Request for Comment: Pursuant to Section 3506(c)(2)(A) of the PRA,
the FTC invites comments on: (1) Whether the disclosure, recordkeeping,
and reporting requirements are necessary, including whether the
resulting information will be practically useful; (2) the accuracy of
our burden estimates, including whether the methodology and assumptions
used are valid; (3) how to improve the quality, utility, and clarity of
the disclosure requirements; and (4) how to minimize the burden of
providing the required information to consumers.
You can file a comment online or on paper. For the FTC to consider
your comment, we must receive it on or before July 19, 2019. Write
``TSR PRA Comment, FTC File No. P094400'' on your comment. Postal mail
addressed to the Commission is subject to delay due to heightened
security screening. As a result, we encourage you to submit your
comments online, or to send them to the Commission by courier or
overnight service. To make sure that the Commission considers your
online comment, you must file it through the https://www.regulations.gov website by following the instructions on the web-
based form. Your comment--including your name and your state--will be
placed on the public record of this proceeding, including the https://www.regulations.gov website. As a matter of discretion, the Commission
tries to remove individuals' home contact information from comments
before placing them on the regulations.gov site.
If you file your comment on paper, write ``TSR PRA Comment, FTC
File No. P094400'' on your comment and on the envelope, and mail it to
the following address: Federal Trade Commission, Office of the
Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex J),
Washington, DC 20580, or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Constitution Center,
400 7th Street SW, 5th Floor, Suite 5610 (Annex J), Washington, DC
20024. If possible, submit your paper comment to the Commission by
courier or overnight service.
Because your comment will be placed on the publicly accessible
website at www.regulations.gov, you are solely responsible for making
sure that your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else's Social
Security number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure that your comment does not include
any sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including in particular competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request, and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted publicly at www.regulations.gov, we cannot redact or remove
your comment unless you submit a confidentiality request that meets the
requirements for such treatment under FTC Rule 4.9(c), and the General
Counsel grants that request.
The FTC Act and other laws that the Commission administers permit
the collection of public comments to consider and use in this
proceeding as appropriate. The Commission will consider all timely and
responsive public comments that it receives on or before July 19, 2019.
For information on the Commission's privacy policy, including routine
uses permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Heather Hippsley,
Deputy General Counsel.
[FR Doc. 2019-10388 Filed 5-17-19; 8:45 am]
BILLING CODE 6750-01-P