Does a prerecorded message count as connecting the call to a sales representative?

No, because a sales representative is a live person. In ordinary usage, a sales representative is a person who attempts to sell products, not a recording that offers to connect a call recipient to a live operator. The court in Asia Pacific Telecom applied that reading and held that an outbound telemarketing call is abandoned if the recipient remains connected to a prerecorded message rather than a live operator for more than two seconds after the completed greeting. Because the FTC limited its motion to calls between January 1, 2008 and August 31, 2009, the court did not need to decide whether the robocall-specific regulations effective September 1, 2009 changed the analysis.

How long does a telemarketer have to connect an answered call?

Two seconds from the person’s completed greeting. A call is abandoned if a person answers it and the telemarketer does not connect the call to a sales representative within that time.

Can a telemarketer ever abandon some calls lawfully?

Only within the safe harbor, which requires technology that keeps abandonment to no more than 3% of answered calls over each successive thirty-day period of the calling campaign, a recorded message stating the seller’s name and telephone number when no sales representative is available, and records establishing compliance. The FTC has argued that the safe harbor is inapplicable when the calls at issue are prerecorded messages, because all of those calls would be abandoned. Whether a campaign stayed under the 3% line can also be a question of fact: in a March 31, 2015 ruling, a district court declined to grant summary judgment where the evidence on whether campaign abandonment rates exceeded 3% was in dispute, because the point is essential to the safe-harbor affirmative defense.

Is a call abandoned if no one picks up?

No, because the definition requires that a person answer the call. That answering requirement, the Dish court noted, relates only to call abandonment. Other rules can still apply to an unanswered prerecorded call: in the same matter, 1,317,872 prerecorded calls were still initiated to numbers on the Registry even though no person answered. The FCC’s regulation at 47 C.F.R. § 64.1200 also separately restricts initiating a call using an artificial or prerecorded voice, other than a call made for emergency purposes or with the prior express consent of the called party.

Does an existing customer relationship excuse a prerecorded call that a person answers?

Not under the TSR’s abandonment provisions, which are not subject to the Established Business Relationship exception. That mattered in the Dish matter, where the court found that Dish’s foreign language marketing group intended the 98,054 prerecorded calls for existing Dish customers. The FTC’s proposed “preexisting business” forbearance policy, which would have allowed recorded solicitations where a preexisting business relationship existed, did not change that result, because the court said a policy of forbearing from enforcement does not change what the law says.

Can a seller be liable when its retailers or vendors place the abandoned calls?

Yes, when the seller caused the calls or its agents made them within their authority. In the Dish matter, the United States had to prove only that Dish caused the retailer to make the abandoned calls. The Seventh Circuit reached the same result under agency principles, holding DISH liable as the principal for wrongful calls the order-entry retailers made in exercising their authority to sell by phone.

May a caller begin with a prerecorded message if the person gave written consent?

Under 47 C.F.R. § 64.1200, yes, if the message begins within two seconds of the called person’s completed greeting. A prerecorded call to a residential line after the subscriber granted prior express written consent is then not considered an abandoned call.

CommunicationsLegal test

Abandoned call

Also known as "Abandoned-call safe harbor"

Berkeley Robinson, Managing Attorney at Robinson Law Firm PLLC

Author

Berkeley Robinson, Esq.

Managing Attorney, Robinson Law Firm PLLC

Berkeley has served as the go-to counsel for many scaling businesses in a transactional and litigation management capacity. Before becoming an attorney, Berkeley grew sales teams, ran online marketing campaigns, and did everything else an entrepreneur does—and still does today as the founder of two online businesses.

Definition

An abandoned call is an outbound telemarketing call that a person answers and that the telemarketer does not connect to a sales representative within two seconds of the person’s completed greeting Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls (quoting 16 C.F.R. § 310.4(b)(1)(iv)) Because a sales representative means a live person, a prerecorded message does not count as that connection, so the definition covers prerecorded messages as well as dead air and hang-ups. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), Memorandum Opinion and Order

Key legal rules

Abandoning a call is itself a telemarketing violation, whether or not anything is sold. These are the main rules that govern it:

It is an “abusive telemarketing act or practice” for a telemarketer to “[a]bandon[] any outbound telephone call.” Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls (quoting 16 C.F.R. § 310.4(b)(1)(iv)) A telemarketer must connect an answered call to a sales representative within two seconds of the person’s completed greeting, and connecting the call to a recorded solicitation message does not satisfy that requirement. Source: TSR Statement of Basis and Purpose, 68 Fed. Reg. 4580, 4644 (Jan. 29, 2003), as quoted in FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls
The safe harbor requires three things: technology that ensures that no more than 3% of answered calls are abandoned over each successive thirty-day period of the calling campaign; a recorded message stating the name and telephone number of the seller when a sales representative is not available; and records that establish compliance with the safe-harbor requirements. Source: Order on summary judgment motions (D. Utah Mar. 31, 2015) (Shelby, J.)
Under the parallel regulation at 47 C.F.R. § 64.1200, when a live sales representative is not available within two seconds after the called person’s completed greeting, the telemarketer or seller must provide a prerecorded identification and opt-out message that discloses the call was for “telemarketing purposes” and names the business on whose behalf the call was placed, along with a telephone number and an automated opt-out mechanism. Source: 47 C.F.R. § 64.1200
Under that same regulation, a telemarketing call that delivers an artificial or prerecorded voice message after the subscriber has granted prior express written consent is not considered an abandoned call if the message begins within two seconds of the called person’s completed greeting. Source: 47 C.F.R. § 64.1200
The TSR’s abandonment provisions are not subject to the Established Business Relationship exception. Source: United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law (Part 9/25)

For the sake of space, this page lists only the primary rules related to this term that most businesses should follow. More may apply to your situation, and your unique facts affect how they apply.

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Why these rules exist

The abandoned call prohibition was added to the Telemarketing Sales Rule after a rule review mandated by the Telemarketing and Consumer Fraud and Abuse Prevention Act, and it took effect on March 31, 2003. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls (quoting 16 C.F.R. § 310.4(b)(1)(iv)) The rule targets a cost imbalance. In Patriotic Veterans, Inc. v. Zoeller, the Seventh Circuit said, in a passage the Dish court quoted, that the lack of a live person “makes the call frustrating for the recipient but cheap for the caller, which multiplies the number of these aggravating calls in the absence of legal controls.” Source: United States v. Dish Network, L.L.C. (C.D. Ill.), Findings of Fact and Conclusions of Law (Count XII)

The safe harbor works as a limit on how much abandonment a caller can tolerate. In proposing a 3% standard in 2004, the Commission said it would give telemarketers “a strong incentive” to avoid exceeding the 3% abandonment rate. Source: Telemarketing Sales Rule, Notice of Proposed Rulemaking, 69 Fed. Reg. 67287 (Nov. 17, 2004), reproduced in DirectTV, Inc., et al. - Complaint for Civil Penalties and Injunctive Relief The Commission also said the standard was consistent with the TSR’s goal of giving consumers a reasonable expectation that their privacy will be respected. Source: Telemarketing Sales Rule, Notice of Proposed Rulemaking, 69 Fed. Reg. 67287 (Nov. 17, 2004), reproduced in DirectTV, Inc., et al. - Complaint for Civil Penalties and Injunctive Relief

Enforcement examples

The Broadcast Team, Inc. v. FTC (voice broadcasting service)

The Broadcast Team, Inc. v. FTC, No. 05CV1342, 2006 WL 321960 (M.D. Fla. Jan. 6, 2006)

The Broadcast Team sought a preliminary injunction to stop the FTC from enforcing the abandoned calls regulation in a way that would prevent it from using prerecorded calls to solicit funds on behalf of a charity. Source: The Broadcast Team v. FTC, No. 05CV1342, 2006 WL 321960 (M.D. Fla. Jan. 6, 2006), as described in FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls Its argument was that the FTC was wrong to read “sales representative” as an actual person and not a recording. Source: The Broadcast Team v. FTC, No. 05CV1342, 2006 WL 321960 (M.D. Fla. Jan. 6, 2006), as described in FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls

Outcome. The court found that the company had not shown it was likely to succeed on its argument that “sales representative” encompasses a recorded message, as distinguished from a living, breathing person. Source: The Broadcast Team v. FTC, No. 05CV1342, 2006 WL 321960 (M.D. Fla. Jan. 6, 2006), as described in FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls

FTC v. Asia Pacific Telecom, Inc. (autodialer robocall services)

FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), Memorandum Opinion and Order

SBN Peripherals operated an autodialer that delivered prerecorded messages in outbound calls to consumers between January 1, 2008 and August 31, 2009. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), Memorandum Opinion and Order Most, and perhaps all, of those messages lasted longer than two seconds. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), Memorandum Opinion and Order A recipient who pressed “1” during the message was transferred to a live operator. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), Memorandum Opinion and Order The FTC’s Count X alleged that the defendants incurred “assisting and facilitating” liability when their telemarketing customers abandoned calls originated from the autodialer. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), Memorandum Opinion and Order

Outcome. The court held that the regulatory definition of abandoned calls embraces prerecorded messages, because a prerecorded message may offer to connect the recipient to a sales representative but is not itself a sales representative. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), Memorandum Opinion and Order It still granted the FTC’s motion only in part, because the stipulated facts did not establish how many autodialer calls were made by “telemarketers,” which is an element of prima facie liability under the abandoned calls provision. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), Memorandum Opinion and Order The court nonetheless observed that it seemed inevitable the defendants would face liability for abandoning some number of calls. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), Memorandum Opinion and Order

United States v. DISH Network L.L.C. (satellite TV sales through retailers)

United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law Issued By the United States District Court - In the Matter of Dish Network

In May 2004, the DISH retailer Star Satellite hired Guardian to make prerecorded “press 1” telemarketing calls selling Dish Network programming. Source: United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law (Part 6/25) Guardian placed 400,000 to 600,000 of those calls a day. Source: United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law (Part 6/25) From July 30, 2005, to November 22, 2005, Star Satellite made 43,100,876 completed abandoned prerecorded calls through Guardian. Source: United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law (Part 6/25) Separately, DISH itself made 98,054 prerecorded calls that were answered by a person, and its foreign-language marketing group intended those calls for existing customers. Source: United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law (Part 9/25)

Outcome. The court held DISH liable for making 98,054 abandoned prerecorded calls itself and for causing Star Satellite to make 43,100,876 abandoned prerecorded calls, all in violation of the TSR. Source: United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law (Count III) The court also found that DISH knew of Star Satellite’s prerecorded calls, or consciously avoided knowing, and kept paying Star Satellite to continue the violations. Source: United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law (Part 17/25) On appeal in March 2020, the Seventh Circuit treated DISH as vicariously responsible for the acts of its order-entry retailers, but said the district court should not have held DISH liable for “substantially assisting” its own agents. Source: United States v. DISH Network L.L.C. (7th Cir. Mar. 26, 2020)

Exposure

A telemarketer that abandons calls faces a maximum civil penalty of $11,000 for each violation before February 9, 2009, and $16,000 for each violation after that date. Source: United States v. Dish Network, L.L.C. (C.D. Ill.), Findings of Fact and Conclusions of Law (Count I) Penalties require more than the illegal call: the TSR civil penalty provisions require proof of knowledge or knowledge fairly implied under objective circumstances that the acts violated the TSR. Source: United States v. Dish Network, L.L.C. (C.D. Ill.), Findings of Fact and Conclusions of Law (Count I) Because the numbers compound call by call, the Dish court calculated that, at $11,000 per violation, the maximum civil penalties for all of Dish’s TSR violations would be over $727 billion. Source: United States v. Dish Network, L.L.C. (C.D. Ill.), Findings of Fact and Conclusions of Law (Count XII) The court did not impose a double penalty for the 43,100,876 Star Satellite calls, which were charged under two counts, and found that one penalty for each call was sufficient in that case. Source: United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law (Part 17/25)

The government may also seek a permanent injunction, and to meet the public interest test for one the FTC must prove a violation of the TSR and a reasonable likelihood of future violations. Source: United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law (Injunctive Relief) In the Dish matter, which involved abandoned prerecorded calls among other violations, the court treated the vast quantity of illegal calls as substantial proof of a reasonable likelihood of future illegal calls without an injunction. Source: United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law (Injunctive Relief)

Liability can reach businesses that do not dial the calls themselves. In the Dish matter, the United States was not required to prove an agency relationship to establish liability for abandoned calls; it had to prove only that Dish caused the retailer to make them. Source: United States v. DISH Network L.L.C., Findings of Fact and Conclusions of Law (Count III) The Seventh Circuit added that a principal that learns of illegal behavior committed by its agents, chooses to do nothing, and continues to receive the gains, is liable for the agent’s acts. Source: United States v. DISH Network L.L.C., 954 F.3d 970 (7th Cir. 2020) A vendor of calling technology faces a different theory: in Asia Pacific Telecom, the FTC’s Count X alleged that the defendants provided substantial assistance or support, including robocalling services, to sellers or telemarketers they knew or consciously avoided knowing were violating § 310.4 of the TSR. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls

The 3% safe harbor is an affirmative defense, so a factual dispute over whether the abandoned call rate exceeded 3% is reserved for trial rather than resolved on summary judgment. Source: Memorandum Decision and Order, United States v. Corporations for Character, L.C., Case No. 2:11-cv-419-RJS (Mar. 31, 2015) (Conclusion) The FTC’s position is that the party claiming an exemption from the TSR carries the burden of proving it. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), FTC's Reply Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls In Asia Pacific Telecom the court noted that the parties disagreed about who bears the burden for certain regulatory exceptions, and it decided the motion without resolving that disagreement. Source: FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), Memorandum Opinion and Order

FAQs

1.FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls. FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls (quoting 16 C.F.R. § 310.4(b)(1)(iv))See also 150331corpforcharsummjdgmt. Order on summary judgment motions (D. Utah Mar. 31, 2015) (Shelby, J.)
2.Memorandum Opinion and Order (Court Granted Partial Summary Judgment). FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), Memorandum Opinion and Order
3.FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls. FTC v. Asia Pacific Telecom, Inc., No. 10 C 3168 (N.D. Ill.), FTC's Memorandum in Support of Partial Summary Judgment on the Issue of Abandoned Calls (quoting 16 C.F.R. § 310.4(b)(1)(iv))