[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 562 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 562

    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

                             March 10, 2009

  Mr. Nelson  of Florida (for himself, Ms. Snowe, and Ms. Klobuchar) 
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 2009''.

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--
                            (i) required by State or Federal statute or 
                        by regulation or order of the Commission or a 
                        State; or
                            (ii) permitted to be assessed by a State or 
                        Federal statute or by regulation or order of 
                        the Commission or a State.
                    (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--
                            (i) a card or similar device that allows 
                        users to pay in advance for a specified amount 
                        of calling, without regard to additional 
                        features, functions, or capabilities available 
                        in conjunction with a prepaid telephone calling 
                        service; or
                            (ii) any right of use purchased in advance 
                        for a sum certain linked to an access number 
                        and authorization code that--
                                    (I) enables a consumer to use a 
                                prepaid telephone calling service; and
                                    (II) is embodied on a card or other 
                                physical object, or 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.
                    (B) Exclusion.--The terms ``prepaid telephone 
                calling card'' and ``card'' do not include cards or 
                other rights of use that provide access to--
                            (i) service 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 person that--
                            (i) purchases prepaid telephone calling 
                        cards or services from a prepaid telephone 
                        calling service provider; and
                            (ii) sells, resells, issues, or distributes 
                        prepaid telephone calling cards 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 
                merchant or seller 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 real time 
                voice communications service, regardless of the 
                technology or network utilized, 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 if 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 person 
        providing prepaid telephone calling service to the public using 
        its own, or a resold, network offering real time voice 
        communications service regardless of the technology utilized.
            (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) Required Disclosure; Rulemaking.--Not later than 180 days after 
the date of enactment of this Act, the Commission shall prescribe 
regulations that require every prepaid telephone calling service 
provider or prepaid telephone calling card distributor to disclose the 
following information relating to the material terms and conditions of 
the prepaid telephone calling card or service:
            (1) Information relating to domestic interstate calls.--
                    (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) Information relating to international preferred 
        destinations.--The applicable calling unit or per-minute rates 
        for each international preferred destinations served by such 
        card or service.
            (3) Information relating to individual international 
        destinations.--
                    (A) The applicable calling unit or per-minute rates 
                for each individual international destinations served 
                by such card or service.
                    (B) That the applicable calling unit or per-minute 
                rates for each individual international destination may 
                be obtained through the prepaid telephone calling card 
                provider's toll-free customer service number and 
                Internet website.
                    (C) Whether those rates fluctuate.
            (4) Other material terms and conditions.--Other material 
        terms and conditions pertaining to the use of such card or 
        service, including--
                    (A) the amount and frequency of all fees;
                    (B) a description of applicable policies relating 
                to refund, recharge, decrement, or expiration; and
                    (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.
            (5) Service provider information.--Information relating to 
        the service provider, including--
                    (A) the name of the service provider;
                    (B) the address of such service provider, which 
                shall be made available on the provider's website (if 
                any), together with the uniform resource locator 
                address thereof; and
                    (C) a toll-free telephone number that may be used 
                to contact the customer service department of such 
                service provider, together with the hours of service of 
                the customer service department.
    (b) Clear and Conspicuous Disclosure of Required Information and 
Language Requirements.--In prescribing regulations under subsection 
(a), the Commission shall require, at a minimum, that--
            (1) the required disclosures (other than the disclosure 
        required by subsection (a)(3)(A)) for prepaid telephone calling 
        cards are printed in plain English in a clear and conspicuous 
        location on the card, or on the packaging of the card, so as to 
        be plainly visible to a consumer at the point of sale;
            (2) the required disclosures (other than the disclosure 
        required by subsection (a)(3)(B)) for prepaid telephone calling 
        service that consumers access and purchase via the Internet are 
        displayed in plain English in a clear and conspicuous location 
        on the Internet site from which the consumer purchases such 
        service, and include conspicuous instructions and directions to 
        any link to such disclosures;
            (3) the required disclosures (other than the disclosure 
        required by subsection (a)(3)(A)) for advertising and other 
        promotional materials are printed on any advertising for the 
        prepaid telephone calling card or service used at the point of 
        sale, including on any signs for display by retail merchants, 
        displayed on any Internet site used to promote material, and on 
        any other promotional material used at the point of sale that 
        is prepared by, or at the direction of, any person that is 
        subject to the requirements of this Act;
            (4) 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, then the required disclosures are 
        provided in that language on such card, packaging, 
        advertisement, or promotional material in the same manner as if 
        they were provided in English; and
            (5) 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, or promotional materials of a 
        prepaid telephone calling card or prepaid telephone calling 
        service, then the customer service department reached via a 
        toll-free number must provide basic customer support (per-
        minute rate or equivalent calling units for each destination, 
        fees, and terms of service) in that language.
    (c) Implementing Regulations.--The Commission may, in accordance 
with section 553 of title 5, United States Code, prescribe such other 
disclosure regulations as the Commission determines are necessary to 
implement this section.

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 in accordance with the 
                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 
        domestic destination or international preferred 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 
                that is prepared by or at the direction of the prepaid 
                telephone calling card service provider; 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 domestic destination or international preferred 
        destination with a prepaid telephone calling card or service.
            (4) Expiration.--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 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, 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.
            (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.
            (6) Maximum billing increments.--To assess or deduct a per-
        minute rate (or equivalent calling unit) in an increment 
        greater than 1 minute of calling time for calls that are less 
        than 1 full minute. It shall not be a violation of this section 
        for a prepaid telephone calling service provider to deduct 
        different destination-specific rates (or equivalent calling 
        units) for each full minute of calling time in accordance with 
        properly disclosed rates or other terms and conditions.
    (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 that is 
                prepared by or at the direction of the prepaid 
                telephone calling card service distributor;
                    (B) any point of sale material relating to the card 
                that is prepared by or at the direction of the prepaid 
                telephone calling card service distributor; 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.--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 is first used; or
                    (B) in the case of a prepaid telephone calling card 
                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. A prepaid calling service 
provider or prepaid calling distributor shall not be liable for the 
disclosure of lawful fees, charges, or limitations made pursuant to 
regulations prescribed by the Commission under section 3, including 
lawful conditions of use.
    (d) Implementing Regulations.--The Commission may, in accordance 
with section 553 of title 5, United States Code, prescribe such 
regulations as the Commission determines are necessary to implement 
this section.

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. Notwithstanding section 
5(a)(2) of the Federal Trade Commission Act (15 U.S.C. 45(a)(2)), 
communications common carriers shall be subject to the jurisdiction of 
the Commission exclusively for the purposes of this Act, and section 
5(a)(2) shall not be otherwise affected.
    (c) Federal Communications Commission Authority.--
            (1) To the extent that the Federal Trade Commission has 
        authority under this Act with respect to prepaid calling cards, 
        prepaid calling card providers and prepaid calling card 
        distributors, the Federal Communications Commission shall not 
        exercise any authority that it may otherwise have with respect 
        to such cards, providers and distributors.
            (2) Except as provided in paragraph (1), nothing in this 
        Act affects the authority of the Federal Communications 
        Commission with respect to such prepaid calling card providers 
        and distributors.

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--
                    (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) shall 
        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 
sections 3 and 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 more than 120 
days after the date on which the regulations prescribed under section 3 
are published in the Federal Register.

SEC. 8. EFFECT ON STATE LAW.

    (a) Preemption.--
            (1) In general.--Except as otherwise provided in this 
        section, this Act preempts the laws of any State or political 
        subdivision thereof to the extent that such laws are 
        inconsistent with this Act, or the rules, regulations, or 
        orders issued by the Commission under this Act.
            (2) Exceptions.--This Act shall not preempt any provision 
        of State law or enforcement action that provides additional 
        enforcement protection to consumers of prepaid telephone 
        calling cards if such provision of law or enforcement action--
                    (A) imposes higher fines or more punitive civil or 
                criminal remedies, including injunctive relief, for any 
                violation of this Act, or the rules, regulations, or 
                orders issued by the Commission under this Act; or
                    (B)(i) relates to terms, conditions, or issues that 
                are not addressed by this Act, or by the rules, 
                regulations, or orders issued by the Commission under 
                this Act; and
                    (ii) is not determined by the Commission to be 
                inconsistent with the public interest.
    (b) Petitions Concerning Preemption.--
            (1) Petitions by providers.--
                    (A) Authority to petition.--A prepaid telephone 
                calling card provider or a prepaid telephone calling 
                card distributor may submit a petition to the 
                Commission to challenge a State law or regulation--
                            (i) as inconsistent with this Act or the 
                        rules, regulations, or orders issued by the 
                        Commission under this Act; or
                            (ii) as inconsistent with the public 
                        interest, if the measure relates to terms, 
                        conditions, or issues that are not addressed by 
                        this Act, or the rules, regulations, or orders 
                        issued by the Commission under this Act.
                    (B) Deadline for commission action.--Within 90 days 
                after receiving a petition under subparagraph (A), the 
                Commission shall issue a final determination on the 
                issues presented in the petition. The Commission may 
                issue an order staying the effectiveness of any State 
                law or regulation that is the subject of the petition 
                during, but for no longer than, such 90-day period.
            (2) Proceedings on unaddressed issues.--If, on the basis of 
        any petition under paragraph (1), the Commission determines 
        that a term, condition, or issue is not addressed by sections 3 
        or 4 of this Act, or the rules issued by the Commission under 
        this section 3 of this Act, the Commission shall, within 180 
        days after the date of such determination, conduct an inquiry 
        or other proceeding to determine whether the Commission should, 
        in the public interest, promulgate a rule, pursuant to section 
        3(c), to address such term, condition, or issue.

SEC. 9. GAO STUDY.

    Beginning 1 year after the date on which final regulations are 
promulgated pursuant to section 3(a), the Comptroller General shall 
conduct a study of the effectiveness of this Act and the disclosures 
required under this Act and shall submit a report of such study to the 
House Committee on Energy and Commerce and the Senate Committee on 
Commerce, Science, and Transportation no later than 2 years after the 
date of enactment of this Act.
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