The proposed amendments to the Rule do not alter Sec. 310.7 (Actions by States and Private Persons), or Sec. 310.8 (Severability). A. Section 310.1Scope of Regulations in This Part

The amendment of the Telemarketing Act by section 1011 of the USA PATRIOT Act is reflected in this section of the TSR. Section 310.1 of the proposed Rule states that ``this part of the CFR implements the Telemarketing Act,\46\ as amended by the USA PATRIOT Act.'' \46\ 15 U.S.C. 61016108. The Telemarketing Act was amended by the USA PATRIOT Act on October 25, 2001. Pub. L. 10756 (Oct. 25, 2001).

During the comment period that occurred prior to enactment of the USA PATRIOT Act, several commenters recommended that the Rule's reach be expanded or clarified.\47\ The impact of the USA PATRIOT Act amendments on the scope of coverage of the TSR, the commenters' proposals, and the Commission's reasoning in accepting or rejecting the commenters' proposals, are discussed below.
\47\ See, e.g., DMA at 4; KTW at 4; LSAP at 1; NAAG at 19; NACAA at 2; NCL at 5, 7, 10; Telesource at 4.

Effect of the USA PATRIOT Act. As noted above, section 1011(b)(3) of the USA PATRIOT Act amends the definition of ``telemarketing'' that appears in the Telemarketing Act, 15 U.S.C. 6306(4), by inserting the underscored language:

The term ''telemarketing'' means a plan, program, or campaign which is conducted to induce purchases of goods or services or a charitable contribution, donation, or gift of money or any other thing of value, by use of one or more telephones and which involves more than one interstate telephone call * *
In addition, Section 1011(b)(2) adds a new section to the Telemarketing Act requiring the Commission to include in the ``abusive telemarketing acts or practices'' provisions of the TSR:
a requirement that any person engaged in telemarketing for the solicitation of charitable contributions, donations, or gifts of money or any other thing of value, shall promptly and clearly disclose to the person receiving the call that the purpose of the call is to solicit charitable contributions, donations, or gifts, and make such other disclosures as the Commission considers appropriate, including the name and mailing address of the charitable organization on behalf of which the solicitation is made. Finally, section 1011(b)(1) amends the ``deceptive telemarketing acts or practices'' provision of the Telemarketing Act, 15 U.S.C. 6102(a)(2), by inserting the underscored language:

The Commission shall include in such rules respecting deceptive telemarketing acts or practices a definition of deceptive
telemarketing acts or practices which shall include fraudulent charitable solicitations and which may include acts or practices of entities or individuals that assist or facilitate deceptive telemarketing, including credit card laundering.

Notwithstanding its amendment of these provisions of the Telemarketing Act, neither the text of section 1011 nor its legislative history suggest that it amends Sections 6105(a) of the Telemarketing Actthe provision which incorporates the jurisdictional limitations of the FTC Act into the Telemarketing Act and, accordingly, the TSR. Section 6105(a) states:

Except as otherwise provided in sections 6102(d) (with respect to the SEC), 6102(e) (Commodity Futures Trading Commission), 6103 (state attorney general actions), and 6104 (private consumer actions) of this title, this chapter shall be enforced by the Commission under the Federal Trade Commission Act (15 U.S.C. Sec. 41 et seq.).
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Consequently, no activity which is outside of the jurisdiction of that Act shall be affected by this chapter. (Emphasis added.) \48\ \48\ Section 6105(b) reinforces the point made in Section 6105(a), as follows:

The Commission shall prevent any person from violating a rule of the Commission under section 6102 of this title in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq. were incorporated into and made a part of this chapter. Any person who violates such rule shall be subject to the penalties and entitled to the same privileges and immunities provided in the Federal Trade Commission Act in the same manner, by the same means, and with the same jurisdiction, power, and duties as though all applicable terms and provisions of the Federal Trade Commission Act were incorporated into and made a part of this chapter. (Emphasis added.)

One type of ``activity which is outside the jurisdiction'' of the FTC Act, as interpreted by the Commission and federal court decisions, is that of nonprofit entities. Sections 4 and 5 of the FTC Act, by their terms, provide the Commission with jurisdiction only over persons, partnerships or ``corporations organized to carry on business for their own profit or that of their members.'' \49\
\49\ Section 5(a)(2) of the FTC Act states: ``The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations * * * from using unfair or deceptive acts or practices in or affecting commerce.'' 15 U.S.C. 45(a)(2). Section 4 of the Act defines ``corporation'' to include: ``any company, trust, socalled Massachusetts trust, or association, incorporated or unincorporated, which is organized to carry on business for its own profit or that of its members * * * '' 15 U.S.C. 44 (emphasis added).

Reading the amendments to the Telemarketing Act effectuated by section 1011 of the USA PATRIOT Act together with the unchanged sections of the Telemarketing Act compels the conclusion that for profit entities that solicit charitable donations now must comply with the TSR, although the Rule's applicability to charitable organizations themselves is unaffected.\50\ The USA PATRIOT Act brings the Telemarketing Act's jurisdiction over charitable solicitations in line with the jurisdiction of the Commission under the FTC Act, by expanding the Rule's coverage to include not only the sale of goods or services but also charitable solicitations by forprofit entities on behalf of nonprofit organizations.\51\
\50\ A fundamental tenet of statutory construction is that ``a statute should be read as a whole, * * * and that provisions introduced by the amendatory Act should be read together with the provisions of the original section that were * * * left unchanged * * * as if they had been originally enacted as one section.'' Sutherland Stat. Constr. Sec. 22.34, p. 297 (5th ed)., citing, inter alia, Brothers v. First Leasing, 724 F.2d 789 (9th Cir. 1984); Republic Steel Corp. v. Costle, 581 F.2d 1228 (6th Cir. 1978); American Airlines, Inc., v. Remis Indus., Inc., 494 F.2d 196 (2d Cir. 1974); Kirchner v. Kansas Turnpike Auth., 336 F.2d 222 (10th Cir. 1964); National Center for Preservation Law v. Landrieu, 496 F. Supp. 716 (D. SC. 1980); Conoco, Inc. v. Hodel, 626 F. Supp. 287 (D. Del. 1986); Palardy v. Horner, 711 F. Supp. 667 (D. Mass. 1989). Thus, in constructing a statute and its amendments, ``[e]ffect is to be given to each part, and they are to be interpreted so that they do not conflict.'' Id.
\51\ While First Amendment protection for charities extend to their forprofit solicitors, e.g., Riley v. Nat'l Fed. of the Blind, 487 U.S. 781 (1988), this narrowly tailored proposed rule furthers government interests that justify the regulation. One such interest is prevention of fraud. E.g., Sec. of State of Maryland v. Joseph H. Munson Co., 467 U.S. 947, 969 n.16 (1984); Telco Communications, Inc. v. Carbaugh, 885 F.2d 1231,1232 (4th Cir. 1989), cert. denied, 495 U.S. 904 (1990). Another is protection of home privacy. See, e.g., Frisby v. Schultz, 487 U.S. 474, 484 (1988) (targeted picketing around a home); Watchtower Bible and Tract Society of New York, Inc. v. Village of Stratton, Ohio, 240 F.3d 553 (6th Cir.), cert. granted on other grounds, __U.S.__ (2001) (upholding law, based on both privacy and fraud grounds, forbidding canvassing of residents who filed a No Solicitation Form with mayor's office).

Commenters' Proposals. A number of commenters urged the expansion of the Rule's scope beyond its current boundaries. For example, LSAP strongly suggested that the Commission amend the Rule to provide additional protection for consumers in light of the convergence of the banking, insurance, and securities industries, noting that this phenomenon has resulted in increased sharing of information between these entities, including customers' billing information.\52\ Similarly, NCL noted that distinctions between common carriers and other vendors are becoming less relevant as deregulation, detariffing, and mergers have led to increased competition among all types of entities to provide similar products and services.\53\ NCL urged that consumers receive the same protections in all commercial telemarketing, regardless of the type of entity involved.\54\
\52\ See LSAP at 1.
\53\ See NCL at 45, 7, 15.
\54\ Id. at 5, 15. NCL also raised concerns about ``cramming,'' which refers to the practice of placing unauthorized charges on a telephone subscriber's telephone bill. Id. at 7. This practice is being considered in connection with the review of the Commission's PayPerCall Rule, see, 63 FR 58524, (Oct. 30, 1998); thus, it need not be treated in the context of the TSR.

The jurisdictional reach of the Rule is set by statute, and the Commission has no authority to expand the Rule beyond those statutory limits. Thus, absent amendments to the FTC Act, the Commission is limited with regard to any additional protections it might provide in response to acts and practices resulting from the convergence of entities that are otherwise exempt from the Commission's jurisdiction.

In a similar vein, some commenters urged the Commission to clarify the Rule's applicability to nonprofit entities.\55\ As explained above, although section 1011 of the USA PATRIOT Act expanded the reach of the TSR by enlarging the definition of ``telemarketing'' to encompass not only calls made to induce purchases of goods or services, but also those to solicit charitable contributions, it did not change the fact that the Telemarketing Act and the TSR do not apply to activities excluded from the FTC's reach by the FTC Act.

\55\ NAAG at 19; NACAA at 2; NFN at 1.

It should be noted, however, that although the Commission's jurisdiction is limited with respect to the entities exempted by the FTC Act, the Commission has made clear that the Rule does apply to any thirdparty telemarketers those entities might use to conduct telemarketing activities on their behalf.\56\ As the Commission stated when it promulgated the Rule, ``[t]he Final Rule does not include special provisions regarding exemptions of parties acting on behalf of exempt organizations; where such a company would be subject to the FTC Act, it would be subject to the Final Rule as well.'' \57\
\56\ For example, although the Rule does not apply to the activities of banks, savings and loan institutions, certain federal credit unions, or to the business of insurance to the extent that such business is regulated by State law, any nonexempt telemarketer calling on behalf of one of these entities would be covered by the Rule. See 60 FR at 43843; FTC/Direct Mktg. Ass'n., Complying with the Telemarketing Sales Rule (Apr. 1996), p. 12.
\57\ 60 FR at 43843. This discussion also addresses NACAA's request that the Commission clarify that it has jurisdiction over telemarketing activities involving the switching of consumers' long distance service. NACAA at 2. The TSR covers the telemarketing of longdistance service to the extent that the telemarketing is conducted by entities that are subject to the FTC Act.

NACAA suggested that the Commission clarify that the Rule applies to international calls made by telemarketers located outside the United States who call consumers within the United States. The Commission believes that its enforcement record leaves no doubt that sellers or telemarketers located outside the United States are subject to the Rule if they telemarket their goods or services to U.S. consumers.\58\ \58\ See, e.g., FTC v. Win USA, No. C981614Z (W.D. Wash. filed Nov. 13, 1998); FTC v. Pacific Rim Pools Int'l, No. C971748, (W.D. Wash. filed Nov. 7, 1997) (Order for Permanent Injunction and Final Judgment entered on Jan. 12, 1999); FTC v. The Tracker Corp. of America, No. 1:97CV2654JEC (N.D. Ga. filed Sept. 11, 1997); FTC v. 90130980 Quebec, Inc., No. 1:96 CV 1567 (N.D. Ohio filed July 18, 1996); and FTC v. Ideal Credit Referral Svcs., Ltd., No. C96 0874, (W.D. Wash. filed June 5, 1996).

NCL and KTW suggested that the complementary use of the Internet and telephone technologies necessitates
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broadening the scope of the Rule to cover online solicitations.\59\ In the original rulemaking, the Commission stated that it lacked sufficient information to support coverage of online services under the Rule,\60\ but noted that such media were subject to the Commission's jurisdiction under the FTC Act. Indeed, since 1995, the Commission has brought more than 200 actions against entities who have used the Internet to defraud consumers.\61\
\59\ See KTW at 4; NCL at 7.
\60\ 60 FR at 30411.
\61\ Included among the FTC's enforcement actions against Internet fraud and deception are cases attacking unfair and deceptive use of ``dialer programs.'' NCL expressed concern about these programs, which are downloadable software programs that consumers access via the Internet. Once a dialer program is downloaded, it disconnects a consumer's computer modem from the consumer's usual Internet service provider, dials an international phone number in a country with a high perminute telephone rate, and reconnects the consumer's modem to the Internet from some overseas location, typically opening at an adult website. Line subscribers the consumers responsible for paying phone charges on the telephone linesthen begin incurring charges on their phone lines for the remote connection to the Internet, typically at the rate of about $4.00 per minute. The charges for the Internetbased adult
entertainment are represented on the consumer's phone bill as international telephone calls. Under its Section 5 authority, the Commission has brought cases against videotext providers who use these dialer programs in an unfair or deceptive manner. See, e.g., FTC v. Hillary Sheinkin, No. 200363618 (D.S.C. filed Nov. 18, 2000); FTC v.Ty Anderson, No. C001843P (W.D. Wash. filed Oct. 27, 2000); FTC v. Verity Int'l, Ltd., No. 7422 (S.D.N.Y. filed Oct. 2, 2000); FTC v. Audiotex Connection, Inc., No. 970726 (E.D.N.Y filed Feb. 13, 1997).

The Commission believes that the issue of whether there is a need for standards for Internet or online advertising and marketing is distinct from the issues relevant to telemarketing. Ecommerce issues are best considered within the specific context of business practices in the realm of electronic commerce. In fact, the Commission has begun considering these issues by conducting an inquiry on how to apply its rules and guides to online activities, and issuing a staff working paper that provides guidelines for appropriate disclosures when marketing online.\62\ The Commission believes that the body of case law that has been developed on Internet fraud and deception, coupled with its published business education materials \63\ for online advertising disclosures, provide a developing source of guidance for promoting and marketing on the Internet.
\62\ 63 FR 24996 (May 6, 1998) (public comments and the workshop transcript for the proceeding are available at www.ftc.gov/bcp/ rulemaking/elecmedia/index.htm); FTC, Dot Com Disclosures: Information About Online Advertising (Staff Working Paper, May, 2000). See also, FTC, Advertising and Marketing on the Internet: Rules of the Road (September, 2000), a guide to comlying with FTC rules and guides when advertising and marketing on the Internet. \63\ See FTC, Dot Com Disclosures; FTC, Advertising and Marketing on the Internet.

B. Section 310.2Definitions

The Commission received comments on several of the Rule's definitions. Each suggested change and the Commission's reasoning in accepting or rejecting that change is discussed below.

The proposed Rule retains the following definitions from the original Rule unchanged, apart from renumbering: ``acquirer,'' ``attorney general,'' ``cardholder,'' ``Commission,'' ``credit,'' ``credit card,'' ``credit card sales draft,'' ``credit card system,'' ``customer,'' ``investment opportunity,'' ``person,'' ``prize,'' ``prize promotion,'' ``seller,'' and ``State.''

In addition, as discussed in detail below, the Commission proposes modifying the definition of ``outbound telephone call,'' and also proposes adding several new definitions: ``billing information,'' ``caller identification service,'' ``express verifiable
authorization,'' ``Internet services,'' and ``Web services.''

Further, in order to implement the amendments to the Telemarketing Act made by section 1011 of the USA PATRIOT Act, the Commission proposes adding certain definitions to the Rule, and modifying others. Section 1011(b)(3) of the USA PATRIOT Act amends the definition of ``telemarketing'' in the Telemarketing Act, 15 U.S.C. 6306(4), by inserting the underscored language:

The term ``telemarketing'' means a plan, program, or campaign which is conducted to induce purchases of goods or services or a charitable contribution, donation, or gift of money or any other thing of value, by use of one or more telephones and which involves more than one interstate telephone call * * * (emphasis added).

The proposed Rule's definition of ``telemarketing'' incorporates this change. To fully implement this definitional change, the proposed Rule adds definitions of the terms ``charitable contribution'' and ``donor,'' discussed below. In addition, the existing definition of ``telemarketer'' requires modification to reflect the expanded reach of the Rule to cover telephone solicitations of charitable contributions pursuant to the USA PATRIOT Act. Accordingly, the definition of ``telemarketer'' now includes the analogous phrase ``or donor'' following each appearance of the term ``customer'' or ``consumer.'' Similarly, in two of the new proposed definitions, ``billing information,'' and ``express verifiable authorization,'' the analogous phrase ``or donor'' has also been included following each appearance of the terms ``customer'' or ``consumer.''

Another proposed global change necessitated by the USA PATRIOT Act is the modification of several of the Rule's existing definitions to reflect the expansion of the Rule's coverage to include the solicitation via telemarketing of ``charitable contributions.'' The affected definitions, ``material,'' ``merchant,'' ``merchant agreement,'' and ``outbound telephone call,'' now include the analogous phrase ``or charitable contributions'' following each occurrence of the phrase ``goods or services.''

Section 310.2(c)``Billing information''

The Commission proposes adding a definition of ``billing information.'' This term comes into play in proposed Sec. 310.3(a)(3), which would add ``billing information'' to the items that must be recited in obtaining a consumer's express verifiable authorization. It is also implicated in proposed Sec. 310.4(a)(5), which would prohibit the abusive practices of receiving any consumer's billing information from any third party for use in telemarketing, or disclosing any consumer's billing information to any third party for use in telemarketing.

As explained further below, in the section discussing proposed changes to Sec. 310.3(a)(3), the Commission proposes to require that ``billing information'' be recited as part of the process of obtaining a consumer's or donor's express verifiable authorization. Under the original Rule, if the telemarketer opted to seek oral authorization for a demand draft, the Rule required that the telemarketer tape record the customer's oral authorization, as well as the provision of the following information: the number, date(s) and amount(s) of payments to be made, the date of authorization, and a telephone number for customer inquiry that is answered during normal business hours. The proposed Rule would expand the express verifiable authorization requirement to other payment methods, and would add to this list of disclosures ``billing information,'' i.e., the identification of the consumer's or donor's specific account and account number to be charged in the particular transaction, to ensure that consumers and donors know which of their accounts will be billed. A definition of ``billing information'' would clarify sellers' and telemarketers' obligations under this proposed revision.

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As explained in the section discussing proposed Sec. 310.4(a)(5) which would prohibit receiving from any person other than the consumer or donor for use in telemarketing any consumer's or donor's ``billing information,'' or disclosing any such ``billing information'' to any person for use in telemarketingthe inclusion of this provision banning trafficking in ``billing information'' makes it necessary to provide in the Rule a definition of that term. The proposed Rule defines ``billing information'' as any data that provides access to a consumer's or donor's account, such as a credit card, checking, savings, share or similar account, utility bill, mortgage loan account, or debit card. The Commission intends this term to include information such as a credit or debit card number and expiration date, bank account number, utility account number, mortgage loan account number, customer's or donor's date of birth or mother's maiden name, and any other information used as proof of authorization to effect a charge against a person's account.

Section 310.2(d)``Caller Identification Service''

The Commission proposes adding a definition of ``caller identification service.'' As described, below, in the discussion of Sec. 310.4(a)(6), the Commission proposes specifying that it is an abusive practice to block, circumvent, or alter the transmission of, or direct another person to block, circumvent, or alter the transmission of, the name and/or telephone number of the calling party for caller identification service purposes, provided that it shall not be a violation to substitute the actual name of the seller and the seller's customer service number, which is answered during regular business hours, for the phone number used in making the call. In order to clarify what is prohibited under this proposed provision, the Commission has defined ``caller identification service'' as ``a service that allows a telephone subscriber to have the telephone number and, where available, name of the calling party transmitted
contemporaneously with the telephone call, and displayed on a device in or connected to the subscriber's telephone.'' The Commission intends the proposed definition of ``caller identification service'' to be sufficiently broad to encompass any existing or emerging technology that provides for the transmission of calling party information during the course of a telephone call.

Section 310.2(f)``Charitable Contribution''

The Commission proposes adding a definition of ``charitable contribution.'' Section 1011 of the USA PATRIOT Act amends the Telemarketing Act to specify as an abusive practice the failure of ``any person engaged in telemarketing for the solicitation of charitable contributions, donations, or gifts of money or any other thing of value'' to make certain prompt and clear disclosures. The Commission has determined that the single term ``charitable contribution,'' defined for the purposes of the Rule to mean ``any donation or gift of money or any other thing of value'' succinctly captures the meaning intended by Congress. Therefore, the Commission proposes to add this definition to the Rule.

The Commission has also determined that this definition should explicitly clarify that the definition and, accordingly, the entire Rule, is inapplicable to political contributions, including contributions to political parties and candidates. Calls to solicit such contributions are outside the scope of the Rule because they involve neither purchases of goods or services nor solicitations of charitable contributions, donations or gifts, and thus fall outside the statutory definition of ``telemarketing.'' 15 U.S.C. 6106(4). Thus, the Commission proposes to exclude from the definition of ``charitable contribution'' any contributions to ``political clubs, committees, or parties.'' \64\ Additionally, as a matter of policy, and following the example of many state laws, the Commission also proposes to exclude from the definition contributions to constituted religious organizations or groups affiliated with and forming an integral part of the organization where no part of the net income inures to the direct benefit of any individual, and which has received a declaration of current tax exempt status from the United States government.'' \65\ The Commission believes that the risk of actual or perceived infringement on a paramount societal valuefree and unfettered religious discourselikely outweighs the benefits of protection from fraud and abuse that might result from including contributions to such organizations within the scope of the definition.
\64\ Similarly, a number of state statutes regulating charitable solicitations exempt political organizations. E.g., Fla. Stat. ch. 496.403 (2000). Ill. Rev. Stat. ch. 23 para. 5103(2000).
\65\ See, e.g., Ga. Code Ann. Sec. 43172(2); Ill. Rev. Stat. ch. 14 para. 54 (2000).

Section 310.2(m)``Donor''

As part of its implementation of section 1011 of the USA PATRIOT Act, the Commission proposes adding a definition of ``donor.'' This Act's expansion of the TSR's coverage to encompass charitable solicitations necessitates the inclusion of a term in the Rule to denote a person solicited to make a charitable contribution. Throughout the original Rule, the terms ``customer'' and ``consumer'' are used to refer to those subject to a solicitation to purchase goods or services by a seller or telemarketer. The meaning of these terms cannot reasonably be stretched to include persons being asked to make a charitable contribution. Therefore, the Commission proposes adding to the Rule an analogous term``donor''for use in the context of charitable solicitations. Under the proposed definition, a person need not actually make a donation or contribution to be a ``donor.'' He or she need only be solicited to make a charitable contribution. (In this respect, the definition tracks the definition of ``customer''``any person who is or may be required to pay for goods or services * * *.'') Section 310.2(n)``Express Verifiable Authorization''

The Commission proposes adding a definition of ``express verifiable authorization'' because the proposed Rule expands the use of the term beyond its meaning in the original Rule. The term ``express verifiable authorization'' comes into play in the proposed Rule in two distinct provisions: Sec. 310.3(a)(3), requiring the express verifiable authorization of a customer or donor to a charge when certain payment methods are used; and Sec. 310.4(b)(1)(iii)(b), which makes it a violation of the Rule to call any consumer or donor who has placed himself or herself on the national ``donotcall'' list absent that consumer's or donor's express verifiable authorization. In order to ensure clarity, the term ``express verifiable authorization'' has been defined to mean ``the informed, explicit consent of a consumer or donor, which is capable of substantiation.'' The specific means of obtaining express verifiable authorization for a charge are listed in Sec. 310.3(a)(3)(i)(ii) and the specific means of obtaining express verifiable authorization to place a call to a consumer or donor who is on the national ``donotcall'' list is found in
Sec. 310.4(b)(1)(iii)(B)(1)(2).
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Section 310.2(m)``Internet Services''

The Commission also proposes adding a definition of ``Internet services'' because of the proposed modification of the businessto business exemption, Sec. 310.6(g), to make the exemption unavailable to telemarketers of Internet services, a line of business that is increasingly pursued by fraudulent telemarketers. Thus, the Commission proposes that the term ``Internet services'' be defined as ``the provision, by an Internet Service Provider, or another, of access to the Internet.'' The Commission intends for this term to encompass the provision of whatever is necessary to gain access to the Internet, including software and telephone or cable connection, as well as other goods or services providing access to the Internet. Specifically, the term includes provision of access to the Internet, or any component thereof, such as electronic mail, the World Wide Web, websites, newsgroups, Internet Relay Chat or file transfers.

Section 310.2(r)``Outbound Telephone Call''

The Commission proposes modifying the Rule's definition of ``outbound telephone call''\66\ to clarify the Rule's coverage in two situations: (1) When, in the course of a single call, a consumer or donor is transferred from one telemarketer soliciting one purchase or charitable contribution to a different telemarketer soliciting a different purchase or contribution, such as in the case of ``up selling;''\67\ and (2) when a single telemarketer solicits purchases or contributions on behalf of two separate sellers or charitable organizations (or some combination of the two). Under the proposed definition, when a call, whether originally initiated by a consumer/ donor or by a telemarketer, is transferred to a separate telemarketer or seller for the purpose of inducing a purchase or charitable contribution, the transferred call shall be considered an ``outbound telephone call'' under the Rule. Similarly, if a single telemarketer solicits for two or more distinct sellers or charitable organizations in a single call, the second (and any subsequent) solicitation shall be considered an ``outbound telephone call'' under the Rule.
\66\ The definition of ``outbound telephone call'' is in Sec. 310.2(n) of the original Rule.

\67\ See n.45 for an explanation of this term.

The Commission proposes this change in response to evidence in the Rule review record that the practice of ``upselling'' is becoming increasingly common.\68\ The Commission believes that in external up selling, when calls are transferred from one seller or telemarketer to another, or when a single telemarketer solicits on behalf of two distinct sellers, it is crucial that consumers or donors clearly understand that they are dealing with separate entities. In the original Rule, the Commission determined that a disclosure of the seller's identity was necessary in every outbound call to enable the customer to make a fullyinformed purchasing decision.\69\ In the case of a call transferred by one telemarketer to another to induce the purchase of goods or services, or one in which a single telemarketer offers the goods or services of two separate sellers, it is equally important that the consumer know the identity of the

FOR FURTHER INFORMATION CONTACT

Catherine Harrington-McBride, (202) 3262452 (email: cmcbride@ftc.gov), Karen Leonard, (202) 3263597 (email: kleonard@ftc.gov), Michael Goodman, (202) 3263071 (email: mgoodman@ftc.gov), or Carole Danielson, (202) 3263115 (email: cdanielson@ftc.gov), Division of Marketing Practices, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580.