Telemarketing Sales Rule

Also called TSR, 16 CFR Part 310

The FTC rule governing telemarketing, including required disclosures, misrepresentation prohibitions, calling restrictions and payment method limits.

What it is

The Telemarketing Sales Rule, 16 C.F.R. Part 310, governs telemarketing calls. It requires telemarketers to make specific disclosures of material information, prohibits misrepresentations, limits the times telemarketers may call, prohibits calls to consumers who have asked not to be called again, and sets payment restrictions for the sale of certain goods and services. Its relevance to payments runs in two directions. First, telemarketing merchants are a recognized elevated-risk category, appearing in network integrity risk programs, precisely because outbound sales generate disputes and because certain payment methods were historically used to make refunds difficult. Second, and less discussed, is that merchant services itself is sold heavily by outbound telephone. A payments provider making cold calls to businesses is engaged in telemarketing, and the rule's prohibitions on misrepresentation apply to the claims made on those calls. The industry's chronic problems, misrepresented rates, undisclosed fees, misleading affiliations with a merchant's existing processor or bank, are misrepresentation problems. The rule has been amended over time, including updates addressing newer scam patterns. Anyone relying on it operationally should read the current text and the FTC's compliance guidance rather than a summary.

Why it matters to your business

If you sell by phone, this rule is a direct compliance obligation and it interacts with your merchant account, because telemarketing is treated as an elevated risk category by acquirers and network programs. If you buy by phone, the rule is your protection, and the practical defense is simpler than the law: never send a merchant statement, a bank account number or a signed authorization to an inbound caller you did not verify. Ask for the company's legal name and registered ISO status, hang up, and call back on a number you found yourself. This is education, not legal advice; TSR compliance questions belong with counsel.

Where it gets contested

In payments, the uncomfortable fact is that the same rule that flags telemarketing merchants as high risk also applies to the sales practices of many of the firms doing the flagging. Cold-call boiler rooms selling merchant services with rate claims that cannot survive a statement review are a persistent feature of this industry, and merchants encounter them constantly. The recurring pattern merchants should recognize: a caller implies they are from your current processor or your bank, references a rate reduction program, and asks you to send a recent statement. Sometimes that is a legitimate competitor with poor scripting. Sometimes it is not. What is unresolved is enforcement reach into the payments sales channel specifically. Network rules require members to ensure agents comply with consumer protection law, but merchants are not parties to those rules, so the practical remedy for a misleading sales call is a complaint to a regulator rather than a network.

How to check it yourself

The next time you receive a cold call about lowering your processing rates, ask for the caller's company legal name, their registered ISO name and their sponsoring acquirer, then end the call and verify independently before sending any document.

Receipts

Claims above that are checkable, with where to check them. Published so you do not have to take anyone's word for it.

The Telemarketing Sales Rule requires material disclosures, prohibits misrepresentations, limits calling times, honors do-not-call requests and restricts payment methods for certain sales
ftc.gov ↗
Telemarketing appears among the categories subject to Visa's integrity risk registration tiers
corepay.net ↗
Visa requires members to ensure third party agents comply with consumer protection law
usa.visa.com ↗