Below are the answers to the most important questions regarding recent compliance updates and the necessary actions you must take to remain compliant with the Telemarketing Sales Rule.
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Table of contents:
⚠️ Legal Disclaimer ⚠️
Credit Repair Cloud is not an attorney and we are not providing legal advice. Please don’t take anything written here as legal advice and consult an attorney if you have any questions.
What is the Telemarketing Sales Rule (TSR)?
The TSR, introduced by the Federal Trade Commission (FTC) in 1995, is designed to protect consumers from deceptive or abusive telemarketing practices. It requires credit repair organizations to follow specific guidelines, especially concerning advance payments and communications with consumers.
What actions do I need to take to ensure compliance with the TSR?
DO'S - Essential actions you must carry out to comply with the TSR.
Automate your sales process by implementing “self-service sign-up” so prospects can sign up, and pay for your credit repair services without speaking to a sales representative.
Use Credit Repair Cloud’s built in Web Lead Form tool (with CRC Billing enabled). This allows prospects to enter their information and provide credit card details online without ever speaking to you.
Use embedded checkout forms or “buy now” options on your website and landing pages. Companies like Chargebee and Billsby provide a hosted checkout widget you can embed on any website where prospects are directed to a secure payment page to complete payment for your service.
Ensure that all of your “call to actions” direct prospects to your “self-service sign-up” form or the webpage that contains this form.
If someone messages you, you can add them as a client in Credit Repair Cloud, turn on Portal Access, assign agreement, carry out work for them, and then request for a card on file (not on call) and have the client sign the agreement online in their Client Onboarding in the portal.
Coming Soon: Use Credit Repair Cloud’s new suite of TSR compliant self-service signup tools.
Self-service sign-up features coming to Credit Repair Cloud soon:
Enhanced landing page to collect your leads more easily
Auto-delivery of a credit audit/credit analysis to your prospects
Easy online agreement signing
Ability to set up billing which allows online payment (even if you have a billing system externally)
Review embedding and collection
Ability to chat with leads
Automated communication with leads
Use alternative non-phone methods to speak to and connect with prospects prior to receiving payment details and signed contract for credit repair services.
Replace phone consultations with sales videos on your website, landing pages and checkout pages.
Use social media to share your results and connect with new customers. You can hold live videos and post on Facebook, Instagram, YouTube, and TikTok to educate and engage with them.
Use social media direct messages (Facebook Messenger, Instagram Messages, WhatsApp, SMS, and Direct Messaging “DM” on any other platform) to chat with prospects and answer their questions.
Install live chat functionality on your website to answer prospects' questions directly and in real-time without engaging in phone conversations.
Use email communication for providing information and answering initial inquiries. Ensure that these emails do not contain any calls to action that direct prospects to call you.
Advise any prospect who calls you, or wants to speak on the phone that you are not able to do so due to TSR regulations. Instead, direct prospects to chat or to your self-service sign-up page.
Meet prospects in-person for consultations and credit audits.
Use Loom videos for reviewing credit audits.
DONT'S - Practices you must avoid if you charge advance fees
The following are practices you must avoid if you charge advance fees. To ensure compliance with the TSR:
Do not make sales calls or speak to consumers on a call or video chat (incoming or outgoing) until they have become your client, signed up for services, provided payment information, and signed your agreement.
Do not run advertisements (websites, social media, billboards, TV, radio) that feature a number to call for more information.
Do not email or mail letters that encourage calls to get more information.
Do not provide free resources like downloadable lead magnets or PDFs that encourage leads to book calls to learn more.
Do not have any “call to actions” that prompt prospects to book a call or call you.
Do not speak to a prospect who is not a paying client on any kind of call. This includes making outbound calls to prospects, or if they call.
Do not call leads or prospects even if they request a callback.
Do not hire third parties or Virtual Assistants to call leads on your behalf.
Do not discuss credit audits on calls or video calls before the lead becomes a paying customer.
Video calls (Zoom, Google Meets) are considered the same as phone calls under the TSR.
Do not have any phone number on your audit report.
Other non-compliant “Loopholes” that do not work and are non-compliant with TSR:
Do not say you’re giving “free” credit repair help but then sell another paid product with it. The courts will see it as getting paid for the credit repair.
Call your fees “voluntary contributions” if they are not tax deductible.
Give away or sell a “credit audit” as an opportunity to sell credit repair services over the phone later.
Where can I find the TSR Compliance Checklist?
You can download the TSR Compliance Checklist by clicking here. This checklist provides step-by-step guidance on the actions you must take to remain compliant.
What happens if I do not comply with the TSR?
If you are found to be in breach of the TSR, Credit Repair Cloud is required by the CFPB to permanently revoke your access to all services and products, including Credit Repair Cloud software, training courses, and the website builder. Additionally, non-compliance can result in substantial fines, penalties, and legal action from the CFPB or other regulatory authorities.
How will Credit Repair Cloud enforce TSR compliance?
Credit Repair Cloud will audit its customers to ensure compliance with the TSR. If you are found to be non-compliant, we must revoke your access to our services and products permanently, with no exceptions.
Does the TSR apply to all credit repair organizations?
Yes, the TSR applies industry-wide to every credit repair organization, regardless of whether you use our software, our training, or are no longer a customer of Credit Repair Cloud.
What should I do if I have questions about the compliance process?
If you have questions about the compliance process, please refer to the TSR Compliance Checklist for detailed guidance. Additionally, we will be providing training materials, more resources, and personalized assistance over the coming days and weeks to support you in navigating TSR compliance.
Will Credit Repair Cloud provide any features to help me remain compliant?
Yes, we will be updating Credit Repair Cloud to include features that will easily enable you to remain compliant with the TSR. Stay tuned for these updates and additional support materials.
Is remaining compliant my responsibility?
While Credit Repair Cloud is here to help and support you in navigating TSR compliance, ultimately, being compliant is your responsibility. Ensure that you download the TSR compliance checklist and complete all required actions today.
What specific practices are considered non-compliant with the TSR?
Practices considered non-compliant with the TSR include displaying your phone number on your website or in marketing materials and making sales calls or speaking to consumers on a call or video chat before they have become your client, signed up for services, provided payment information, and signed your agreement.
How can I ensure my credit repair business stays compliant in the future?
To ensure ongoing compliance, regularly review and update your business practices according to the TSR guidelines. Stay informed about any updates from the FTC and CFPB, and make use of the resources and training provided by Credit Repair Cloud.
Additional Resources and Guidance
If we missed your question in this FAQs document, please email our awesome Support team at [email protected], or start a live chat using the help widget on the bottom right corner.