Making the Market Work: Enhancing Consumer Sovereignty Through the Telemarketing Sales Rule and the Distance Selling Directive

Abstract

This article analyzes the provisions of the Telemarketing Sales Rule, which the Federal Trade Commission promulgated in 1995 pursuant to the 1994 Telemarketing and Consumer Fraud and Abuse Prevention Act. The author proposes a framework through which the Rule may be understood as embodying a regulatory strategy of controlling abusive telemarketing by enhancing the effectiveness of market forces. In particular, the Rule works by improving the quantity and quality of information flowing to consumers, preventing the occurrence of transactions that the consumer does not truly intend, preventing telemarketers from evading the effects of market forces governing availability of payment mechanisms, and enhancing the effectiveness of the contract regime. The article then applies the same framework to the 1997 Distance Selling Directive of the European Union, yielding several recommendations that EU member countries may find useful when transposing the Directive into national law. The author also discusses some of the special considerations that EU member countries should take account of when transposing the Directive's requirements in the context of electronic commerce.