Our credit card department has come up with a "new" strategy for their pre-approved offers. They want to cut down on costs and make a firm offer of credit to potential customers through telemarketing efforts.

I have tried to convince them this would be too risky, but I was hoping someone might know of something in the regs I may have missed that would back me up.

Does anyone know where it might say that a pre-approved offer must be in writing? Any and all comments will be welcome.

Blessed are the marketers. The fact is this proposal at this stage isn't really a FCRA, Reg Z, or privacy issue. Of course, proper disclosure of APRs is required. I know of nothing that prohibits the practice of verbally offering credit via telemarketing. I'm sure the base of prospective borrowers would be pre-determined. The prospective borrower would not be obligated until they signed the check and any other disclosures appropriate for the credit. This is a variation of offers via the mail involving checks that once you endorse and acknowledge become binding.

The problem here may be that of miscommunication. When one person speaks and another listens, what is said may not be what is heard. Call it a telemarketer training issue or setting yourself up for a problem. They may be the same thing.

AL 2002-3 Guidance on Unfair or Deceptive Acts or Practice Practices that can be misleading or deceptive include false oral and written representations; misleading claims about costs of services or products; use of bait-and-switch techniques; and failure to provide promised services or products.

The changes to FCRA included a disclosure rule that if you obtain a prescreened list of potential applicants from the credit bureau, you are required to disclose to the consumer that they have the right to opt out of future prescreened lists by notifying the credit bureau that created the prescreened list. I don't know if this disclosre must be given verbally, but my gut feeling is that you may need to do so. If so, I would recommend creating a telemarketing script for your marketers so that you can prove compliance and so they have the information available to them.
Leslie

You're right about miscommunication. You need to carefully script and monitor any telemarketing efforts of this nature to prevent abuses from taking place. A good sense of caution is warranted here but as to the question of whether you can do it, my response is yes, but police it. I share the sense of mistrust of telemarketers and their ability to present your product in a clear and understandable manner.

Thanks to everyone for all of the input. Some of the concerns were the same I had, but you gave me some other ideas to back up my initial comments.