Arkansas Telemarketing Fraud Laws

Telemarketing fraud occurs when a solicitor calls a victim and makes false statements or misrepresentations in order to talk the victim into giving the caller money or personal information. Arkansas' telemarketing fraud laws are contained in the Home Solicitation Sales Act. This act was created to regulate home solicitation sales in order to protect victims from deceptive sales practices. The following chart highlights the main aspects of this act.

Code Section

Arkansas Code Chapter 89: Home Solicitation Sales

What's Prohibited?

 

Knowingly and willfully committing a "deceptive trade practice."

What's a "Deceptive Trade Practice?"

 

A deceptive trade practice can be any of the following acts committed by a seller in connection with a home solicitation sale:
  • Misrepresenting the buyer's right to cancel a sale
  • Representing that the seller is conducting a survey, quiz, contest, or in any other way misrepresenting the purpose of the call
  • Misrepresenting who the solicitor is working for
  • Misrepresenting that any merchandise or service is free if the consumer would in fact be required to purchase something
  • Representing that a price is special or reduced, unless there is a significant reduction from the seller's established selling price
  • Failing to disclose clearly at the beginning of the call that the purpose of the solicitation is to sell goods or services, or
  • Failing to disclose (both orally and in writing) the total cash price, the down payment, the unpaid balance of the cash price, the amount and due dates of any necessary payments, and an accurate description of the goods or services purchased

Penalties

Class A misdemeanor. Punishable by a fine of up to $2,500 and/or imprisonment for up to one year.

Offenders must also pay the victim:

  • 10% of the transaction total, or $100 (whichever is greater), and
  • The actual damages (including incidental, consequential, and special damages) sustained by the victim because of the violation

Valid Telemarketing Sales

It is important to note that not all unsolicited telemarketing calls are illegal. Arkansas' Home Solicitation Sales Act also sets out the requirements that solicitors must follow in order to conduct legal sales over the phone. Before a telemarketer's sale is enforceable there must be:

  • A written document that:
    • Is sufficient to indicate that a contract has been made between the parties
    • Is signed by both the buyer and the seller
    • Doesn't contain any new provisions that weren't included in the oral sales presentation
    • Contains the name and address of the seller, and
    • Contains the date that the buyer signed the document
  • A copy of this written document must be provided to the buyer when he or she signs it
  • The seller must not engage in any deceptive trade practices (as outlined above), and
  • When the buyer signs the written document the seller must provide the buyer with a "notice of cancellation" form

Buyer's Right to Cancel Contract

Under Arkansas' telemarketing fraud laws, a buyer who enters into a contract during a telephone solicitation has the absolute right to cancel the contract until midnight of the third calendar day (excluding Sundays and holidays). The contract is cancelled when the buyer returns the notice of cancellation form back to the seller. In these situations, buyers can best protect themselves by sending the cancellation by registered mail.

After a buyer cancels a contract, the seller must return any payments that the buyer may have already made. The buyer also has the right to keep any goods that have already been delivered to him until the seller returns the buyer's payments in full. However, during this time period the buyer has a duty to take reasonable care of the goods in his possession.

Federal Laws and Registries that Apply to Telemarketing

Additional Resources

State laws change frequently. For case specific information about Arkansas' telemarketing fraud laws contact a local consumer protection attorney.

Next Steps: Search for a Local Attorney

Contact a qualified attorney.