[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2998 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 2998

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 8, 2008

   Mr. Nelson of Florida (for himself, Ms. Snowe, Mr. Kerry, and Mr. 
   Martinez) introduced the following bill; which was read twice and 
   referred to the Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL


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

    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 ``Prepaid Calling Card Consumer 
Protection Act of 2008''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (2) Fees.--
                    (A) In general.--The term ``fees'' means all 
                charges, fees, taxes, or surcharges, including 
                connection, hang-up, service, payphone, and maintenance 
                charges, which may be applicable to the use of a 
                prepaid telephone calling card or a prepaid telephone 
                calling service used by a consumer for calls 
                originating within the United States.
                    (B) Exclusion.--The term ``fees'' does not include 
                the applicable per unit or per minute rate for the 
                particular destination called by a consumer.
            (3) International preferred destination.--The term 
        ``international preferred destination'' means a specific 
        international destination named on a prepaid telephone calling 
        card or on the packaging material accompanying a prepaid 
        telephone calling card.
            (4) Prepaid telephone calling card.--
                    (A) In general.--The terms ``prepaid telephone 
                calling card'' and ``card'' mean any right of use 
                purchased in advance for a sum certain linked to 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 or other physical object.
                    (B) Exclusion.--The terms ``prepaid telephone 
                calling card'' and ``card'' do not include cards or 
                other rights of use that provide access to--
                            (i) a telecommunications service with 
                        respect to which the card or other rights of 
                        use and the 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
                            (ii) a wireless telecommunications service 
                        account with a wireless service provider that 
                        the purchaser has a preexisting relationship 
                        with or establishes a carrier-customer 
                        relationship with via the purchase of a prepaid 
                        wireless telecommunications service handset 
                        package.
            (5) Prepaid telephone calling card distributor.--
                    (A) In general.--The term ``prepaid telephone 
                calling card distributor'' means any entity, 
                corporation, company, association, firm, partnership, 
                or person that purchases prepaid telephone calling 
                cards or services from a prepaid telephone calling card 
                distributor or prepaid telephone calling service 
                provider and sells, resells, issues, or distributes 
                prepaid telephone calling cards for a fee to 1 or more 
                distributors of such cards or to 1 or more retail 
                sellers of such cards.
                    (B) Exclusion.--The term ``prepaid telephone 
                calling card distributor'' does not include any retail 
                merchants or sellers of prepaid telephone calling cards 
                exclusively engaged in point-of-sale transactions with 
                end-user customers.
            (6) Prepaid telephone calling service.--
                    (A) In general.--The terms ``prepaid telephone 
                calling service'' and ``service'' mean any 
                telecommunications service, paid for in advance by a 
                consumer, that allows a consumer to originate voice 
                telephone calls through a local, long distance, or 
                toll-free access number and authorization code, whether 
                manually or electronically dialed.
                    (B) Exclusion.--The terms ``prepaid telephone 
                calling service'' and ``service'' do not include any 
                service that provides access to a wireless 
                telecommunications service account wherein the 
                purchaser has a preexisting relationship with the 
                wireless service provider or establishes a carrier-
                customer relationship via the purchase of a prepaid 
                wireless telecommunications service handset package.
            (7) Prepaid telephone calling service provider.--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.
            (8) Wireless telecommunications service.--The term 
        ``wireless telecommunications service'' has the meaning given 
        the term ``commercial mobile service'' in section 332(d) of the 
        Communications Act of 1934 (47 U.S.C. 332(d)).

SEC. 3. REQUIRED DISCLOSURES OF PREPAID TELEPHONE CALLING CARDS OR 
              SERVICES.

    (a) Rulemaking.--Not later than 180 days after the date of the 
enactment of this Act, the Commission shall prescribe regulations that 
require every prepaid telephone calling service provider and prepaid 
telephone calling card distributor to disclose, with respect to the 
terms and conditions of a prepaid telephone calling card or service 
provided, sold, resold, issued, or distributed by such service provider 
or distributor, as the case may be, the following:
            (1)(A) The number of calling units or minutes of domestic 
        interstate calls provided by such card or service at the time 
        of purchase; or
            (B) the dollar value of such card or service and the 
        domestic interstate rate per minute provided by such card or 
        service at the time of purchase.
            (2) The applicable calling unit or per minute rates for all 
        international preferred destinations served by such card or 
        service.
            (3) The applicable per minute rates for all individual 
        international destinations served by such card or service.
            (4) That the rates described in paragraph (3) may be 
        obtained through the prepaid telephone calling card provider's 
        toll-free customer service number or Internet website.
            (5) All terms and conditions pertaining to the use of such 
        card or service, including the following:
                    (A) The maximum amount and frequency of all fees.
                    (B) Applicable policies relating to refund, 
                recharge, decrement, and expiration.
                    (C) Limitations, if any, on the use or period of 
                time for which the displayed, promoted, or advertised 
                minutes or rates will be available to the customer.
            (6) The name and address of such service provider.
            (7) A toll-free telephone number to contact the customer 
        service department of such service provider and the hours of 
        service of such customer service department.
    (b) Clear and Conspicuous Disclosure of Required Information and 
Language Requirements.--The regulations prescribed under subsection (a) 
shall include requirements as follows:
            (1) Cards.--In the case of a prepaid telephone calling 
        card, the disclosures described in subsection (a) (other than 
        paragraph (3) of such subsection) shall be printed in plain 
        English in a clear and conspicuous location on each prepaid 
        telephone calling card or the packaging of such card so that 
        such disclosures are plainly visible to a consumer at the point 
        of sale.
            (2) Online services.--In the case of a prepaid telephone 
        calling service that consumers access and purchase via the 
        Internet, the disclosures described in subsection (a) (other 
        than paragraph (4) of such subsection) shall be displayed in 
        plain English in a clear and conspicuous location on the 
        Internet site from which the consumer purchases such service.
            (3) Advertising and other promotional material.--The 
        disclosures described in subsection (a) (other than paragraph 
        (3) of such subsection) shall 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.
            (4) Languages other than english.--If a language other than 
        English is predominantly used on a prepaid telephone calling 
        card or its packaging, or in the point-of-sale advertising, 
        Internet advertising, or promotional material of a prepaid 
        telephone calling card or prepaid telephone calling service, 
        than the disclosures required by the regulations prescribed 
        under subsection (a) shall be disclosed in that language on 
        such card, packaging, advertisement, or promotional material in 
        the same manner as if English were used.
    (c) Additional Regulations.--The Commission may, in accordance with 
section 553 of title 5, United States Code, prescribe such other 
regulations as the Commission determines are necessary to protect 
consumers of prepaid telephone calling cards and services.

SEC. 4. UNLAWFUL CONDUCT RELATED TO PREPAID TELEPHONE CALLING CARDS.

    (a) Prepaid Telephone Calling Service Provider.--It shall be 
unlawful for any prepaid telephone calling service provider to do any 
of the following:
            (1) Undisclosed fees and charges.--To assess or deduct from 
        the balance of a prepaid telephone calling card any fee or 
        other amount for use of the prepaid telephone calling service, 
        except--
                    (A) the per minute rate or value for each 
                particular destination called by the consumer; and
                    (B) fees that are disclosed as required by 
                regulations prescribed under section 3.
            (2) Minutes and rates as promoted and advertised.--With 
        respect to a prepaid telephone calling card for a service of 
        the prepaid telephone calling service provider, to provide 
        fewer minutes than the number of minutes promoted or 
        advertised, or to charge a higher per minute rate to a specific 
        destination than the per minute rate to that specific 
        destination promoted or advertised, on--
                    (A) the prepaid telephone calling card;
                    (B) any point-of-sale material relating to the 
                card; or
                    (C) other advertising related to the card or 
                service.
            (3) Minutes announced, promoted, and advertised through 
        voice prompts.--To provide fewer minutes than the number of 
        minutes announced, promoted, or advertised through any voice 
        prompt given by the prepaid telephone calling service provider 
        to a consumer at the time the consumer places a call to a 
        dialed destination with a prepaid telephone calling card or 
        service.
            (4) Expiration.--Unless a different expiration date is 
        clearly disclosed pursuant to the disclosure requirements of 
        regulations prescribed under section 3, to provide, sell, 
        resell, issue, or distribute a prepaid telephone calling card 
        or service that expires--
                    (A) before the date that is 1 year after the date 
                on which such card or service is first used; or
                    (B) in the case of a prepaid telephone calling card 
                or service that permits a consumer to purchase 
                additional usage minutes or add additional value to the 
                card or service, before the date that is 1 year after 
                the date on which the consumer last purchased 
                additional usage minutes or added additional value to 
                the card or service.
            (5) Charges for unconnected calls.--To assess any fee or 
        charge for any unconnected telephone call. For purposes of this 
        paragraph, a telephone call shall not be considered connected 
        if the person placing the call receives a busy signal or if the 
        call is unanswered.
    (b) Prepaid Telephone Calling Card Distributor.--It shall be 
unlawful for any prepaid telephone calling card distributor to do any 
of the following:
            (1) Undisclosed fees and charges.--To assess or deduct from 
        the balance of a prepaid telephone calling card any fee or 
        other amount for use of the prepaid telephone calling service, 
        except--
                    (A) the per minute rate or value for each 
                particular destination called by the consumer; and
                    (B) fees that are disclosed as required by 
                regulations prescribed under section 3.
            (2) Minutes as promoted and advertised.--To sell, resell, 
        issue, or distribute any prepaid telephone calling card that 
        the distributor knows provides fewer minutes than the number of 
        minutes promoted or advertised, or a higher per minute rate to 
        a specific destination than the per minute rate to that 
        specific destination promoted or advertised, on--
                    (A) the prepaid telephone calling card;
                    (B) any point of sale material relating to the 
                card; or
                    (C) other advertising relating to the card or 
                service.
            (3) Minutes announced, promoted, or advertised through 
        voice prompts.--To sell, resell, issue, or distribute a prepaid 
        telephone calling card that such distributor knows provides 
        fewer minutes than the number of minutes announced, promoted, 
        or advertised through any voice prompt given to a consumer at 
        the time the consumer places a call to a dialed destination 
        with the prepaid telephone calling card or service.
            (4) Expiration.--Unless a different expiration date is 
        clearly disclosed pursuant to the disclosure requirements of 
        regulations prescribed under section 3, to provide, sell, 
        resell, issue, or distribute a prepaid telephone calling card 
        that expires--
                    (A) before the date that is 1 year after the date 
                on which such card or service is first used; or
                    (B) in the case of a prepaid telephone calling card 
                or service that permits a consumer to purchase 
                additional usage minutes or add additional value to the 
                card or service, before the date that is 1 year after 
                the date on which the consumer last purchased 
                additional usage minutes or added additional value to 
                the card or service.
    (c) Liability.--A prepaid telephone calling service provider or a 
prepaid telephone calling card distributor may not avoid liability 
under this section by stating that the displayed, announced, promoted, 
or advertised minutes, or the per minute rate to a specific 
destination, are subject to fees or charges, or by utilizing other 
disclaimers or limitations.

SEC. 5. ENFORCEMENT BY THE FEDERAL TRADE COMMISSION.

    (a) Unfair and Deceptive Act or Practice.--Notwithstanding any 
other provision of law, a violation of a regulation prescribed under 
section 3 or the commission of an unlawful act proscribed under section 
4 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 Commission shall enforce this 
Act in the same manner and by the same means 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 prescribe regulations 
to carry out this Act.

SEC. 6. STATE ENFORCEMENT.

    (a) In General.--
            (1) Civil actions.--In any case in which the attorney 
        general of a State, a State utility commission, or other 
        authorized State consumer protection agency 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 federal trade commission.--
                    (A) In general.--Before filing an action under 
                paragraph (1), the attorney general of a State, a State 
                utility commission, or an authorized State consumer 
                protection agency 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 to the filing of an action under 
                        paragraph (1) if the attorney general of a 
                        State, a State utility commission, or an 
                        authorized State consumer protection agency 
                        filing such action determines that it is not 
                        feasible to provide the notice described in 
                        subparagraph (A) before the filing of the 
                        action.
                            (ii) Notification.--In an action described 
                        in clause (i), the attorney general of a State, 
                        a State utility commission, or an authorized 
                        State consumer protection agency shall provide 
                        notice and a copy of the complaint to the 
                        Commission at the time the action is filed.
    (b) Intervention by Federal Trade Commission.--
            (1) In general.--Upon receiving notice under subsection 
        (a)(2), the Commission may intervene in the action that is the 
        subject of such notice.
            (2) Effect of intervention.--If the Commission intervenes 
        in an action under subsection (a), the Commission may--
                    (A) be heard with respect to any matter that arises 
                in that action; and
                    (B) file a petition for appeal.
    (c) Construction.--Nothing in this Act may be construed to prevent 
an attorney general of a State, a State utility commission, or an 
authorized State consumer protection agency from exercising the powers 
conferred on the attorney general, a State utility commission, or an 
authorized State consumer protection agency by the laws of that State--
            (1) to conduct investigations;
            (2) to administer oaths or affirmations;
            (3) to compel the attendance of witnesses or the production 
        of documentary and other evidence;
            (4) to enforce any State consumer protection laws of 
        general applicability; or
            (5) to establish or utilize existing administrative 
        procedures to enforce the provisions of the law of such State.
    (d) 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.

SEC. 7. APPLICATION.

    The regulations prescribed under section 3 and the provisions of 
section 4 shall apply to any prepaid telephone calling card issued or 
placed into the stream of commerce, and to any advertisement, 
promotion, point-of-sale material or voice prompt regarding a prepaid 
telephone calling service that is created or disseminated 90 days after 
the date on which the regulations are prescribed under section 3(a).

SEC. 8. PREEMPTION.

    Nothing in this Act shall affect the authority of any State to 
establish or continue in effect a provision of the law of a State 
relating to regulation of prepaid calling cards, prepaid calling card 
distributors, prepaid calling services, or prepaid calling service 
providers, except to the extent that such provision of law is 
inconsistent with the provisions of this Act or a regulation prescribed 
under this Act, and then only to the extent of such inconsistency. A 
provision of the law of a State is not inconsistent with this Act or a 
regulation prescribed under this Act if such provision provides equal 
or greater protection to consumers than what is provided under this Act 
or the regulations prescribed under this Act.
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