Information Collection Activities; Proposed Collection; Comment Request, 22844-22848 [2019-10388]

Download as PDF 22844 Federal Register / Vol. 84, No. 97 / Monday, May 20, 2019 / Notices FEDERAL TRADE COMMISSION Information Collection Activities; Proposed Collection; Comment Request Federal Trade Commission (‘‘Commission’’ or ‘‘FTC’’). ACTION: Notice. AGENCY: 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. SUMMARY: 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 khammond on DSKBBV9HB2PROD with NOTICES SUPPLEMENTARY INFORMATION: VerDate Sep<11>2014 16:41 May 17, 2019 Jkt 247001 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 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 voiceactivated opt-out mechanism at the outset of the call. 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. 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). 5 See 73 FR 51164 (Aug. 29, 2008). 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 PO 00000 Frm 00039 Fmt 4703 Sfmt 4703 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 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. 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. E:\FR\FM\20MYN1.SGM 20MYN1 Federal Register / Vol. 84, No. 97 / Monday, May 20, 2019 / Notices 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 (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. (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. 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 11 78 FR at 19,485. 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. 12 Staff khammond on DSKBBV9HB2PROD with NOTICES 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. 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. VerDate Sep<11>2014 16:41 May 17, 2019 Jkt 247001 PO 00000 Frm 00040 Fmt 4703 Sfmt 4703 22845 allow for only 2 seconds of disclosures.16 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. 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 × 40% lasting the duration × 7 seconds of full pre-sale disclosures ÷ 3,600 (conversion of minutes to hours) × 25% burden = 447,222 hours) + (2.3 billion outbound calls × 60% terminated prematurely × 2 seconds of disclosures ÷ 3,600 × 25% burden = 191,667 hours) + (450 million outbound calls resulting in direct sales × 40% upsell conversions × 3 seconds of related disclosures ÷ 3,600 × 25% burden = 37,500 hours) + (1.8 billion inbound calls × 40% upsell conversions × 3 seconds ÷ 3,600 × 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). 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 16 See, e.g., 60 FR at 32,683; 78 FR at 19,485. 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. 18 16 CFR 310.3(a)(1)(i)–(iii). 17 This E:\FR\FM\20MYN1.SGM 20MYN1 22846 Federal Register / Vol. 84, No. 97 / Monday, May 20, 2019 / Notices direct mail 19 × 10 hours 20 per year × 25% burden = 2,513 hours), as well as oral disclosures [(450 million outbound calls × 8 seconds ÷ 3,600 × 25% burden = 250,000 hours) + (450 million outbound calls × 40% upsell attempts × 20% sales conversion × 8 seconds ÷ 3,600 × 25% burden =20,000 hours) + (1.8 billion inbound calls × 40% upsell attempts × 20% sales conversion × 8 seconds ÷ 3,600 × 25% burden = 80,000 hours)] = 352,513 hours.21 Disclosures for Debt Relief Services khammond on DSKBBV9HB2PROD with NOTICES 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. 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 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.) 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. VerDate Sep<11>2014 16:41 May 17, 2019 Jkt 247001 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 Accordingly, allowing for the abovestated 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 × 8 seconds ÷ 3,600 × 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 Staff’s estimate for each of these types of non-exempt inbound calls is 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/p60263.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/p60242.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). 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). PO 00000 Frm 00041 Fmt 4703 Sfmt 4703 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. 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 × 0.0007 [0.005 × 0.13] × 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 × .001 [0.01 × 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). 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. E:\FR\FM\20MYN1.SGM 20MYN1 Federal Register / Vol. 84, No. 97 / Monday, May 20, 2019 / Notices 0.13] × 8 seconds ÷ 3,600); for advance fee loan sales (16,027 complaints) 37 is 4,000 hours (1.8 billion × 0.001 [0.011 × 0.13] × 8 seconds ÷ 3,600); for credit repair sales (2,928 complaints) 38 is 1,200 hours (1.8 billion × 0.0003 [0.002 × 0.13] × 8 seconds ÷ 3,600); 400 hours for loss recovery services (547 complaints) 39 (1.8 billion × 0.0001 [0.0004 × 0.13] × 8 seconds ÷ 3,600); and 40 hours for CCLP sales (73 complaints) 40 (1.8 billion × 0.00001 [0.0001 × 0.13] × 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. 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 × 5% [estimate of percentage of sales transactions involving prize promotions] × 3 seconds ÷ 3,600 × 25% burden = 4,688 hours) + (450 million direct sales transactions from outbound calls × 0.1% [estimate of percentage of sales transactions involving CCLP] × 4 seconds ÷ 3,600 × 25% burden = 125 hours) + (450 million sales transactions from outbound calls × 40% attempted upsell conversions × 20% sales conversions × 0.1% [estimate of percentage of outbound calls involving CCLP upsells] × 4 seconds × 25% burden ÷ 3,600 = 10 hours) + (1.8 billion inbound calls × 40% attempted upsell conversions × 20% sales conversions × 0.1% [estimate of percentage of inbound calls involving CCLP upsells] × 4 seconds × 25% burden ÷ 3,600 = 40 hours) + (450 million sales transactions from outbound calls × 10% [estimate of 37 Id. khammond on DSKBBV9HB2PROD with NOTICES 38 Id. 39 Id. 40 Id. 41 16 CFR 310.3(a)(1)(iv)–(v). 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). 42 16 VerDate Sep<11>2014 16:41 May 17, 2019 Jkt 247001 percentage of outbound calls involving negative options] × 4 seconds ÷ 3,600 × 25% burden = 12,500 hours) + (450 million sales transactions from outbound calls × 40% attempted upsell conversions × 20% sales conversions × 10% [estimate of percentage of outbound calls involving negative option upsells] × 4 seconds × 25% burden ÷ 3,600 = 1,000 hours) + (1.8 billion inbound calls × 40% attempted upsell conversions × 20% sales conversions × 10% [estimate of percentage of inbound calls involving negative option upsells] × 4 seconds ÷ 3,600 × 25% burden = 4,000 hours). 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 × 10 seconds ÷ 3,600 × 25% burden = 2,044 hours) + (2,942,779 inbound debt relief calls × 10 seconds ÷ 3,600 × 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 PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 22847 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 × 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. 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 × 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. 45 See 67 FR 37,366 (May 29, 2002). The twominute 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). 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. E:\FR\FM\20MYN1.SGM 20MYN1 22848 Federal Register / Vol. 84, No. 97 / Monday, May 20, 2019 / Notices (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. (c) Reporting Labor Cost Estimated labor cost supplying basic identifying information to the Registry operator is $4,500 (328 hours × $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. khammond on DSKBBV9HB2PROD with NOTICES (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 Thus, total capital and/or other nonlabor 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 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. 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. VerDate Sep<11>2014 16:41 May 17, 2019 Jkt 247001 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 webbased 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 PO 00000 Frm 00043 Fmt 4703 Sfmt 4703 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 DEPARTMENT OF HEALTH AND HUMAN SERVICES Agency for Healthcare Research and Quality Agency Information Collection Activities: Proposed Collection; Comment Request Agency for Healthcare Research and Quality, Department of Health and Human Services (HHS). ACTION: Request for information (RFI). AGENCY: The Agency for Healthcare Research and Quality (AHRQ) requests SUMMARY: E:\FR\FM\20MYN1.SGM 20MYN1

Agencies

[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]]

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FEDERAL TRADE COMMISSION


Information Collection Activities; Proposed Collection; Comment 
Request

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

ACTION: Notice.

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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\
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    \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).
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    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.
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    \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.
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    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\
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    \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.
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(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.
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    \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.
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(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.
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    \11\ 78 FR at 19,485.
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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\
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    \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.
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    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.
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    \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.
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    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).
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    \18\ 16 CFR 310.3(a)(1)(i)-(iii).
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    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\
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    \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.)
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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.
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    \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.
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    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\
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    \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).
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    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\
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    \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).
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    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.
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    \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).
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    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.
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    \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.
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    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).
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    \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).
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    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.
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    \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).
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    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.
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    \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.

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[[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.
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    \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.
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(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\
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    \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.
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    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