II 110th CONGRESS 2d Session S. 2998 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.

1.

Short title

This Act may be cited as the Prepaid Calling Card Consumer Protection Act of 2008.

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)).

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.

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.

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.

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.

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).

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.