Delaware Telemarketing Fraud Act

Telemarketing is an organized activity, program or campaign by one or more telemarketers to solicit a sale of merchandise by telephone, and a telemarketer is a natural person who, from any location, initiates or receives telephone calls to or from a customer located in Delaware in connection with it.

Delaware requires a seller or telemarketing business, unless exempted, to obtain a certificate of registration from the Director of the Consumer Protection Unit before transacting business with a Delaware customer through telemarketing. Every registrant must also file a $50,000 corporate surety bond, or an equivalent letter of credit, with the Director.

The registration and bond duty does not apply to a corporation whose shares trade on a public exchange or its at least 60-percent-owned subsidiary, or a 501(c)(3) or (6) nonprofit, if organized in Delaware or qualified to do business there, to a telemarketing business working under contract for such a corporation, or to listed sellers including repair-contract sellers, Public Service Commission-regulated sellers, established Delaware retailers, negative-option plans, small food sellers, real estate licensees, and cable, newspaper or magazine sellers.

A seller or telemarketing business must keep its advertising and scripts, prize-recipient records, customer and sales records, telemarketing employee records and payment authorizations for 24 months. At the beginning of a solicitation call and before any sales pitch, a telemarketer must disclose that the call's purpose is to sell specific merchandise, the telemarketer's name and the name of the seller on whose behalf the call is made, and accurate information about the merchandise offered.

Before the initial sales call ends and before payment is requested, the telemarketer must disclose the total price, any restrictions or conditions, material aspects of the merchandise and of the refund, cancellation, exchange or repurchase policy, and the material terms of any investment or prize promotion.

A telemarketing sale becomes final only 7 business days after the customer receives a written notice, in at least 12-point bold type, of the right to cancel, unless the seller offers a full refund or satisfaction guarantee with at least 7 days to review the goods or services.

It is a prohibited practice to submit a customer's check or draft for payment without the customer's express verifiable authorization, to represent registration as a government endorsement, to assist a seller or telemarketer one knew or should have known was violating the chapter, to take advance payment to recover losses from a prior telemarketing transaction, or to send a courier for payment unless the customer can inspect the merchandise first.

A telemarketer may not wilfully call or contact a customer for a purpose connected with selling or advertising merchandise for 10 years after the customer has directed the telemarketer, orally or in writing, to cease and desist, a call being wilful if the caller knows or should know of the instruction.

The chapter does not apply to a solicitation completed only after a face-to-face presentation to the customer, a business-to-business sale, telephone use by a charitable, religious, political, educational, labor or social organization for noncommercial fundraising, a licensed insurance or registered securities professional acting within the license's scope, a supervised financial institution, a qualifying catalog seller, or a sale governed by Public Service Commission or Federal Communications Commission tariffs.

It also exempts a communication by telephone or other media that the customer initiated and that was not the result of any solicitation by the telemarketer, seller or telemarketing business. The sale of merchandise by an unregistered, non-exempt seller or telemarketing business is voidable. A customer who suffers a loss or harm from a violation may recover actual and punitive damages, attorney's fees, court costs and any other remedies including equitable relief. Violating Title 11's extortion or blackmail offenses in connection with telemarketing is separately a class F felony.