Telemarketing Sales Rule
The FTC rule on telephone sales campaigns. It bans cash-to-cash transfers, cash reload and remotely created payment orders, and bars advance fees for credit repair, debt relief and some loan and recovery services.
The Telemarketing Sales Rule applies to a plan, program or campaign to induce the purchase of goods or services, or a charitable contribution, that involves more than one interstate telephone call. The FTC has amended it several times, in 2003, 2008, 2010 and 2015. It covers sellers and telemarketers, with limited exceptions.
The FTC says the rule prohibits four payment methods in both inbound and outbound telemarketing: remotely created payment orders and checks, cash-to-cash money transfers, cash reload mechanisms, and advance fees for certain services. Those services are credit repair, recovery services, advance-fee loans and debt relief. The regulation sets the detail. A credit repair seller cannot take a fee until the promised time frame has ended and the customer has a credit report, issued more than six months after the results, showing they were achieved. A debt relief seller cannot be paid until at least one debt has been renegotiated or settled and the customer has made at least one payment under it.
The rule also requires disclosures such as total cost and refund policy, honouring Do Not Call requests, and keeping records for 24 months. For a person being pitched by phone, it gives a simple test: a caller who wants a fee up front for credit repair, debt relief or a guaranteed loan, or who wants payment by cash transfer or reload, is asking for something the rule forbids.
Where it shows up
- Credit repair scams · A federal law already made the fee illegal before the service even started, the shortest test there is for whether the promise is real.
- Debt settlement scams · A federal rule already bans charging you before a single debt is settled, most of these operators charge you anyway.
- Advance-fee loan scams · A 'guaranteed' loan that only requires one fee first, which is the one thing a real lender never asks for.
- Credit card interest rate reduction scams · A robocall claims it works with Visa or Mastercard and charges hundreds of dollars upfront for a rate cut your own card issuer gives for free.
Sources
- Complying with the Telemarketing Sales Rule. US Federal Trade Commission. Accessed 2026-10-10. Supports: The rule's scope, the four prohibited payment methods and categories, the disclosure, Do Not Call and 24-month recordkeeping requirements.
- 16 CFR 310.4 Abusive telemarketing acts or practices. Electronic Code of Federal Regulations (US Government Publishing Office). Accessed 2026-10-10. Supports: The timing conditions on fees for credit repair, advance-fee loans and debt relief.