Marketing Legal Plans Under the Telemarketing Sales Rule

The Telemarketing Sales Rule, known as the TSR, applies to a legal plan the moment a membership is sold through a telephone call that is part of a campaign involving more than one interstate call, whether the plan company or a vendor makes the call, unless an exemption applies. Telemarketing sales rule compliance for legal plans means satisfying the rule’s disclosure, misrepresentation, negative option, do not call and calling hour requirements, and the Telephone Consumer Protection Act, known as the TCPA, adds consent rules for calls and texts to cell phones.

There is no exemption for legal services, because the rule turns on how the membership is sold rather than on who delivers it.

Why the TSR applies to legal plan memberships

The TSR defines telemarketing in 16 CFR 310.2 as a plan, program or campaign conducted to induce the purchase of goods or services by use of one or more telephones and involving more than one interstate call. A plan company that offers the membership is a seller, and the company or vendor that places or receives the calls is a telemarketer. Under 16 CFR 310.3(b), a vendor that knowingly assists a violation is liable too.

The exemptions in 16 CFR 310.6 are narrow. Calls between a telemarketer and a business are largely exempt. Calls in which the sale is not completed until a face to face presentation are exempt. Inbound calls from consumers responding to general media advertising or to a direct mail piece that discloses all material terms are exempt, but those inbound exemptions do not apply to debt relief services, and a mailer that leaves out a material term loses the exemption.

Disclosures and misrepresentations under 16 CFR 310.3

Before the prospect pays, 16 CFR 310.3(a)(1) requires clear and conspicuous disclosure of the total cost of the membership, all material restrictions, limitations or conditions, and the refund or cancellation policy, or the fact that there are no refunds. Which matters are covered, which are excluded, whether pre existing matters are covered, waiting periods, hour or document caps, and the fact that noncovered work is billed at a discounted rate generally have to be disclosed before the card number is taken.

Section 310.3(a)(2) prohibits misrepresenting any material aspect of the service. Scripts that imply the plan is a law firm, that services are unlimited, that the plan is affiliated with a bar association, or that signing up will resolve a pending lawsuit are misrepresentations. Payments by anything other than a credit card require express verifiable authorization under 16 CFR 310.3(a)(3).

Negative option memberships, free trials and recurring billing

Nearly every legal plan is a negative option because the membership renews and bills until the member cancels. The TSR requires disclosure of that fact, the amount and timing of the charges, and how to stop them under 16 CFR 310.3(a)(1)(vii). A free trial that converts to a paid membership is a free to pay conversion, and 16 CFR 310.4(a)(7) requires the telemarketer to obtain at least the last four digits of the account number, the customer’s express agreement to be charged, and a recording of the entire transaction.

For memberships sold online, the Restore Online Shoppers’ Confidence Act, 15 U.S.C. 8403, requires clear disclosure of the recurring terms before the charge, express informed consent, and a simple mechanism to stop recurring charges. The Federal Trade Commission’s broader Negative Option Rule, often called the click to cancel rule, was vacated by the Eighth Circuit on July 8th, 2025 in Custom Communications, Inc. v. FTC, so the TSR, the Restore Online Shoppers’ Confidence Act and the state automatic renewal laws are the main operative rules today.

Do not call, calling hours and prerecorded calls under 16 CFR 310.4

Outbound calls may not go to numbers on the National Do Not Call Registry under 16 CFR 310.4(b)(1)(iii)(B) unless the plan has the person’s express written agreement to be called or an established business relationship, and they may not go to anyone who has asked the plan not to call. Calls to residences are limited to 8 a.m. through 9 p.m. local time under 16 CFR 310.4(c). Prerecorded sales messages require the recipient’s prior express written agreement under 16 CFR 310.4(b)(1)(v). Telemarketers must transmit caller identification under 16 CFR 310.4(a)(8), and a call is abandoned if no representative is on the line within two seconds of the greeting.

Recordkeeping under 16 CFR 310.5 covers scripts, sales records, employee records and do not call requests, and the FTC expanded those requirements in 2024.

TCPA consent for calls and texts to cell phones

The TCPA, 47 U.S.C. 227, governs the technology of the call. Marketing calls and texts to cell phones that use an automatic telephone dialing system or an artificial or prerecorded voice require the called party’s prior express written consent under the Federal Communications Commission’s rules at 47 CFR 64.1200. The Supreme Court’s decision in Facebook v. Duguid in 2021 narrowed what counts as an autodialer, but prerecorded and artificial voice calls remain covered regardless of the dialer.

The FCC’s one to one consent rule, which would have required a separate consent for each seller named on a lead form, was vacated by the Eleventh Circuit on January 24th, 2025 in Insurance Marketing Coalition v. FCC. A consumer may still consent to calls from several sellers at once if the consent clearly and unmistakably says so. The TCPA carries a private right of action with statutory damages of $500 per violation, tripled for willful violations, which is why lead generation draws class actions.

A legal plan marketed as a way to settle, reduce or restructure debts is a debt relief service under 16 CFR 310.2(o), which brings the advance fee ban in 16 CFR 310.4(a)(5) and the loss of the inbound call exemptions, so a plan that covers debt defense should keep its marketing on defense and consultation. Many states also require sellers and telemarketers to register and post a bond before calling their residents, and those registrations belong in place before the campaign starts. Shipkevich PLLC builds telemarketing compliance programs for legal plan companies and defends them when the FTC, a state attorney general or a class action plaintiff calls.

Frequently asked questions

To discuss how these rules apply to your company, contact Shipkevich PLLC.