WASHINGTON (8/9/13)--The Credit Union National Association appreciates the Federal Trade Commission's (FTC) ongoing efforts to limit the activities of unscrupulous telemarketers that defraud consumers, but in a recent comment letter CUNA outlined concerns regarding how proposed amendments to the FTC's Telemarketing Sales Rule could impact the broader payments system.
The FTC's proposed changes, among other things, would prohibit sellers and telemarketers when they are engaged in "telemarketing" activities on the phone, from accepting or requesting four types of "novel payment methods":
Remotely created checks (RCCs);
Remotely created payment orders;
Cash-to-cash money transfers; and
Cash reload mechanisms.
A complete ban on these four payment methods in telemarketing activities would likely shift some of these payments to other payment systems, and financial institutions and other entities will have to make appropriate risk management changes, CUNA Regulatory Counsel Dennis Tsang wrote.
"We are not aware that credit unions use these types of payment methods in telemarketing or engage in telemarketing practices that harm consumers," he added.
Noting that the proposed rule could impact check-related rules, including the regulation of RCCs, CUNA encouraged the FTC to provide information to payment processors and others to comply with the rule, while permitting legitimate payments to continue.
The CUNA letter also urged the FTC to coordinate closely with federal financial regulators to ensure legitimate payments, including emerging payment applications and financial institution collections activities, are not negatively impacted.
For the full CUNA comment letter, use the resource link.