[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3402 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3402

    To require accurate and reasonable disclosure of the terms and 
      conditions of prepaid telephone calling cards and services.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 3, 2007

  Mr. Engel (for himself, Mr. Ferguson, and Mr. Towns) introduced the 
   following bill; which was referred to the Committee on Energy and 
                                Commerce

_______________________________________________________________________

                                 A BILL


 
    To require accurate and reasonable disclosure of the terms and 
      conditions of prepaid telephone calling cards and services.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Calling Card Consumer Protection 
Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the prepaid telephone calling card industry in the 
        United States is plagued by fraudulent and deceptive business 
        practices; and
            (2) the necessary protections relating to prepaid telephone 
        calling cards must ensure that all advertising is truthful, 
        accurate, and reasonably discloses the terms and conditions of 
        prepaid telephone calling cards and prepaid telephone calling 
        services.

SEC. 3. DEFINITIONS.

    As used in this Act, the following definition apply:
            (1) The term ``prepaid telephone calling service provider'' 
        means any entity, corporation, company, association, firm, 
        partnership, or person providing prepaid telephone calling 
        service to the public using its own, or a resold 
        telecommunications network or voice over Internet technology.
            (2) The term ``prepaid telephone calling service'' or 
        ``service'' means any prepaid telecommunications service that 
        allows consumers to originate calls through a local, long 
        distance or toll-free access number and authorization code, 
        whether manually or electronically dialed. Such term shall not 
        include any service that provides access to a wireless 
        telecommunications service account wherein the purchaser has a 
        pre-existing relationship with the wireless service provider or 
        establishes a carrier-customer relationship via the purchase of 
        the object.
            (3) The term ``prepaid telephone calling card'' or ``card'' 
        means any right of use purchased for a sum certain that 
        contains an access number and authorization code that enables a 
        consumer to use a prepaid telephone calling service. Such 
        rights of use may be embodied on a card or other physical 
        object or may be purchased by an electronic or telephonic means 
        through which the purchaser obtains access numbers and 
        authorization codes that are not physically located on a card, 
        its packaging, an Internet website, or other promotional 
        materials. Such term shall not include cards or other rights of 
        use that provide access to--
                    (A) telecommunications service wherein the card or 
                other rights of use and telecommunications service are 
                provided for free or at no additional charge as a 
                promotional item accompanying a product or service 
                purchased by a consumer; or
                    (B) a wireless telecommunications service account 
                wherein the purchaser has a pre-existing relationship 
                with the wireless service provider or establishes a 
                carrier-customer relationship via the purchase of the 
                object.
            (4) The term ``prepaid telephone calling card distributor'' 
        means any entity, corporation, company, association, firm, 
        partnership, or person that purchases prepaid telephone calling 
        cards from a prepaid telephone calling card provider or 
        distributor and sells, re-sells, issues, or distributes such 
        cards to one or more distributors of such cards or to one or 
        more retail sellers of such cards. Such term shall not include 
        any retail merchants or sellers of prepaid telephone calling 
        cards exclusively engaged in point-of-sale transactions with 
        end-user customers.

SEC. 4. REQUIRED DISCLOSURES OF PREPAID TELEPHONE CALLING CARDS OR 
              SERVICES.

    (a) Required Disclosure.--Any prepaid telephone calling service 
provider or prepaid telephone calling card distributors shall disclose 
the following information relating to the terms and conditions of the 
prepaid telephone calling card or service:
            (1) The total value in dollars or the number of calling 
        minutes available of the prepaid telephone calling card or 
        service at the time of purchase.
            (2) A description of any and all terms and conditions 
        pertaining to, and associated with, the use of the prepaid 
        telephone calling service and prepaid telephone calling card, 
        including all fees, limitations on the use of minutes 
        available, and surcharges and applicable policies relating to 
        refund, recharge, decrement, and expiration.
            (3) The name of the prepaid telephone calling service 
        provider.
            (4) The prepaid telephone calling service provider's 
        customer service telephone number and hours of service.
    (b) Location of Disclosure and Language Requirement.--
            (1) Clear and conspicuous.--
                    (A) Cards.--In the case of a prepaid telephone 
                calling card, the disclosures required under subsection 
                (a) shall be printed in plain English language in a 
                clear and conspicuous location on the prepaid telephone 
                calling card or its packaging. If the card is enclosed 
                in opaque packaging, such disclosures shall be printed 
                on the outside packaging of the card.
                    (B) Online services.--In the case of a prepaid 
                telephone calling service that consumers access and 
                purchase via the Internet, the disclosures required 
                under subsection (a) shall be displayed in plain 
                English language in a clear and conspicuous location on 
                the Internet site that the consumer must access prior 
                to purchasing such service.
                    (C) Advertising and other promotional material.--
                The disclosures required under subsection (a) shall 
                also be printed on any advertising for the prepaid 
                telephone calling card or service, including on any 
                signs for display by retail merchants, any promotional 
                emails, any Internet site used to promote such card or 
                service, and on any other promotional material.
            (2) Foreign languages.--If a language other than English is 
        predominantly used on a prepaid telephone calling card, its 
        packaging, or in point of sale advertising, or promotional 
        material of a prepaid telephone calling card or prepaid 
        telephone calling service, then the disclosures required by 
        this section shall be disclosed in that language on such card, 
        packaging, advertisement, or promotional material.

SEC. 5. UNLAWFUL CONDUCT RELATED TO PREPAID TELEPHONE CALLING CARDS.

    (a) Undisclosed Fees and Charges.--It shall be unlawful for any 
prepaid telephone calling service provider or prepaid telephone calling 
card distributor to assess any fee associated with the prepaid 
telephone calling card or prepaid telephone calling service, or impose 
any charge for any permitted use of the prepaid telephone calling card 
or prepaid telephone calling service if such fee or charge is not 
disclosed as required under section 4.
    (b) Minutes as Promoted and Advertised.--
            (1) Service provider.--It shall be unlawful for any prepaid 
        telephone calling service provider to provide fewer minutes 
        than the number of minutes promoted or advertised on any 
        prepaid telephone calling card, any point of sale material 
        relating to such card or the other advertising related to any 
        prepaid telephone calling card or service. Any limitation on 
        the period of time for which the displayed, promoted, or 
        advertised minutes will be available to the customer shall be 
        conspicuously displayed on the card, packaging, and promotional 
        material that lists the minutes, consistent with section 4(b).
            (2) Distributor.--It shall be unlawful for any prepaid 
        telephone calling card distributor to distribute any prepaid 
        telephone calling card that the distributor knows that the 
        prepaid telephone calling card provides fewer minutes than the 
        number of minutes promoted or advertised on any prepaid 
        telephone calling card, any point of sale material relating to 
        such card, any voice prompt indicating the number of minutes 
        available, or other advertising relating to any prepaid 
        telephone calling card or service. Any limitations on the 
        period of time for which the displayed, promoted, or advertised 
        minutes will be available to the customer shall be 
        conspicuously displayed on the card, packaging, and promotional 
        material that lists the minutes, consistent with section 4(b).
    (c) Minutes Promoted and Advertised Through Voice Prompts.--
            (1) Service provider.--It shall be unlawful for any prepaid 
        telephone calling service provider to provide fewer minutes 
        than the number of minutes promoted or advertised through any 
        voice prompt given to a customer at the time the customer 
        places a call to a dialed destination with the prepaid 
        telephone calling card or service.
            (2) Distributor.--It shall be unlawful for any prepaid 
        telephone calling card distributor to distribute prepaid 
        telephone calling cards that it knows provide fewer minutes 
        than the number of minutes promoted or advertised through any 
        voice prompt given to a customer at the time the customer 
        places a call to a dialed destination with the prepaid 
        telephone calling card or service.
    (d) Expiration.--Unless a different expiration date is clearly 
disclosed pursuant to the disclosure requirements under section 4, it 
shall be unlawful for any prepaid telephone calling service provider or 
prepaid telephone calling card distributor to provide, issue, resell, 
or distribute a prepaid telephone calling card or service that 
expires--
            (1) after a period of less than 1 year from the date on 
        which such card or service is first used; or
            (2) in the case of a prepaid telephone calling card or 
        service that permits the consumer to purchase additional usage 
        minutes or add additional value to the card or service, after a 
        period of less than 1 year from the date on which the consumer 
        last purchased additional usage minutes or added additional 
        value to the card or service.
    (e) Charges for Unconnected Calls.--It shall be unlawful for any 
prepaid telephone calling service provider or service to assess any fee 
or charge for any unconnected telephone call. For purposes of this 
subsection, a telephone call shall not be considered connected if the 
person placing the call receives a busy signal or if the call is 
unanswered.
    (f) Liability.--Liability under this section may not be avoided by 
stating that the displayed, promoted, or advertised minutes are subject 
to fees or charges, or by utilizing other disclaimers or limitations.

SEC. 6. ENFORCEMENT BY THE FEDERAL TRADE COMMISSION.

    (a) Unfair and Deceptive Act or Practice.--A violation of section 4 
or 5 shall be treated as a violation of a rule defining an unfair or 
deceptive act or practice prescribed under section 18(a)(1)(B) of the 
Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
    (b) Authority of the Commission.--The Federal Trade Commission 
shall enforce this Act in the same manner, by the same means, and with 
the same jurisdiction as though all applicable terms and provisions of 
the Federal Trade Commission Act were incorporated into and made a part 
of this Act.
    (c) Rulemaking Authority.--The Commission may issue regulations to 
carry out this Act.

SEC. 7. STATE ENFORCEMENT.

    (a) In General.--
            (1) Civil actions.--In any case in which the attorney 
        general of a State has reason to believe that an interest of 
        the residents of that State has been or is threatened or 
        adversely affected by the engagement of any person in a 
        practice that is prohibited under this Act, the State, as 
        parens patriae, may bring a civil action on behalf of the 
        residents of that State in a district court of the United 
        States of appropriate jurisdiction, or any other court of 
        competent jurisdiction--
                    (A) to enjoin that practice;
                    (B) to enforce compliance with this Act;
                    (C) to obtain damage, restitution, or other 
                compensation on behalf of residents of the State ; or
                    (D) to obtain such other relief as the court may 
                consider to be appropriate.
            (2) Notice to f.t.c.--
                    (A) In general.--Before filing an action under 
                paragraph (1), the attorney general of a State shall 
                provide to the Commission--
                            (i) written notice of the action ; and
                            (ii) a copy of the complaint for the 
                        action.
                    (B) Exemption.--
                            (i) In general.--Subparagraph (A) shall not 
                        apply with respect to the filing of an action 
                        by an attorney general of a State under this 
                        subsection, if the attorney general of a State 
                        determines that it is not feasible to provide 
                        the notice described in that subparagraph 
                        before the filing of the action.
                            (ii) Notification.--In an action described 
                        in clause (i), the attorney general of a State 
                        shall provide notice and a copy of the 
                        complaint to the Commission at the same time as 
                        the attorney general files the action.
    (b) Intervention by F.T.C.--
            (1) In general.--On receiving notice under subsection 
        (a)(2), the Commission shall have the right to intervene in the 
        action that is the subject of the notice.
            (2) Effect of intervention.--If the Commission intervenes 
        in an action under subsection (a), it shall have the right--
                    (A) to be heard with respect to any matter that 
                arises in that action ; and
                    (B) to file a petition for appeal.
    (c) Construction.--For purposes of bringing any civil action under 
subsection (a), nothing in this Act shall be construed to prevent an 
attorney general of a State from exercising the powers conferred on the 
attorney general by the laws of that State--
            (1) to conduct investigations;
            (2) to administer oaths or affirmations; or
            (3) to compel the attendance of witnesses or the production 
        of documentary and other evidence.
    (d) Action by the Commission May Preclude State Action.--In any 
case in which an action is instituted by or on behalf of the Commission 
for violation of this Act, no State may, during the pendency of that 
action , institute an action under subsection (a) against any defendant 
named in the complaint in that action for violation of that section.
    (e) Venue; Service of Process.--
            (1) Venue.--Any action brought under subsection (a) may be 
        brought in the district court of the United States that meets 
        applicable requirements relating to venue under section 1391 of 
        title 28, United States Code.
            (2) Service of process.--In an action brought under 
        subsection (a), process may be served in any district in which 
        the defendant--
                    (A) is an inhabitant; or
                    (B) may be found.
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