5 Telesales Mistakes That Could Get You Sued

5 Telesales Mistakes That Could Get You Sued

Telesales are a MAJOR area of focus for the FTC.

If you sell over the phone, then you automatically have a higher level of exposure.

Even well-meaning companies can find themselves in trouble by using some widely-taught practices.

Here are the top five telesales mistakes that can get companies sued—and how to avoid them.

#1 – Claims

The number one mistake in telesales is making earnings claims—whether explicit or implied.

Salespeople often try to entice potential customers by promising certain financial outcomes, such as, “You’ll be making $10,000 a month in no time!” or “Most of our clients flip houses within 30 days and make over $100,000 per flip.”

Even more subtle statements can cause trouble, like saying, “There’s no reason you shouldn’t make $20,000 a month with this program.”

The FTC and other regulatory bodies scrutinize any claims that a customer will achieve a specific financial result.

Unless a company can substantiate such claims with solid evidence—showing that the majority of participants actually achieve the promised results—making them is a violation of the FTC’s rules.

It’s nearly impossible for companies to substantiate these types of earnings claims, which is why it’s best to avoid them altogether.

#2 – Misrepresentations

A close second to earnings claims is making misrepresentations about what the customer will receive.

This happens when a salesperson promises features or benefits that don’t match reality.

For example, a telesales representative might say, “We provide one-on-one coaching every step of the way,” but in reality, the company offers only group coaching or occasional check-ins.

This type of misrepresentation can create false expectations in the customer’s mind, leading to complaints and, eventually, legal action.

The FTC views these kinds of statements as deceptive, even if the salesperson didn’t mean to mislead the customer.

Using phrases like “we’ll hold your hand through every step” or “we’re going to monitor your progress” can easily be flagged as misrepresentations if they don’t reflect the actual service provided.

To avoid this mistake, make sure that sales scripts align with the actual service and that your staff is trained to make honest and accurate claims.

#3 – False Scarcity

Scarcity is a well-known tactic to encourage urgency in a sale.

Phrases like, “We only have 10 spots left, so you need to act fast!” can push customers to make quick decisions.

However, false scarcity—where the company claims limited availability but has no such limits—can be considered deceptive by the FTC.

For example, if a company says they’re only accepting 100 participants, but they’ll happily accept any customer with money to spend, that’s a misrepresentation!

It’s perfectly fine to use true scarcity, but it must be documented. Businesses should keep records to prove that they turned people away or stopped selling at a specific point.

If a company can’t provide this proof, they could face serious penalties for misleading customers.

#4 – False Qualifications

Many telesales teams use the concept of qualifications to make potential customers feel special.

This tactic involves telling a prospect, “We only accept qualified individuals, so we need to make sure you’re the right fit for this program.”

In reality, the “qualification” process is often just a ploy to see if the prospect has the financial means to purchase the product.

The problem with this approach is that it creates a false sense of EXCLUSIVITY.

This false sense of being “qualified” can lead to complaints if the program doesn’t live up to their heightened expectations.

Additionally, regulators often view these tactics as deceptive because the real qualification process has nothing to do with a customer’s suitability and everything to do with their ability to pay.

To avoid this mistake, you should be transparent about your qualification process and avoid using it as a mere sales tactic.

#5 – Improper Introductions

This mistake might seem minor, but it can carry significant legal consequences.

The Telemarketing Sales Rule (TSR) requires telesales representatives to provide certain key pieces of information at the beginning of every sales call:

1. The name of the caller.
2. The company they represent.
3. The purpose of the call.
4. A disclosure if the call is being recorded (required in certain states).

Failure to provide this information can lead to accusations of deceptive practices.

The FTC and state regulators want customers to know exactly who they’re talking to and why. If a company doesn’t follow these rules, it could face lawsuits and fines.

Additionally, in states with stringent privacy laws (like California), failing to disclose that a call is being recorded can result in a class action lawsuit.

Anik and Greg talk more about these in this episode of the Don’t Say That podcast.