upselling

Case Study The Federal Trade Commission enforces a Telemarketing Sales Rule (TSR) that provides important protections for a consumer presented with upselling. Among other things, the TSR requires disclosure of all information that is relevant to the consumer's decision to accept the offer before the consumer authorizes payment for the purchase. It also requires the consumer's informed consent before billing information is submitted for payment. In April 2006 an executive of the Direct Marketing Association requested an FTC advisory opinion as to whether a particular type of marketing program qualified under TSR as upselling. The solicitation was one that was made in conjunction with an inbound call to a financial institution from a customer requesting account, transaction, balance, or payment information. After responding to the consumer's request, the financial institution offered information about a service (for example, credit monitoring) and asked if the customer was interested in learning more about the product. A positive response resulted in the call being transferred to a marketing company that pitched the service. The Direct Marketing Association contended the solicitation did not constitute upselling because the initial transaction (providing information about the account) did not involve a seller. However, the FTC was of the opinion the solicitation did involve upselling and was not exempt from the Telemarketing Sales Rule.