Short title

This Act may be cited as the

Fair Telephone Billing Act of 2012

Findings

Congress makes the following findings: (1)For years, telephone users have complained that their wireline telephone bills included unauthorized third-party charges. (2)This problem, commonly referred to as cramming, first appeared in the 1990s, after wireline telephone companies opened their billing platforms to an array of third-party vendors offering a variety of services. (3)Since the 1990s, the Federal Communications Commission, the Federal Trade Commission, and State attorneys general have brought multiple enforcement actions against dozens of individuals and companies for engaging in cramming. (4)An investigation by the Committee on Commerce, Science, and Transportation of the Senate confirmed that cramming is a problem of massive proportions and has affected millions of telephone users, costing them billions of dollars in unauthorized third-party charges over the past decade. (5)The Committee showed that third-party billing through wireline telephone numbers has largely failed to become a reliable method of payment that consumers and businesses can use to conduct legitimate commerce. (6)Telephone companies regularly placed third-party charges on their customers’ telephone bills without their customers’ authorization. (7)Many companies engaged in third-party billing were illegitimate and created solely to exploit the weaknesses in the third-party billing platforms established by telephone companies. (8)In the last decade, millions of business and residential consumers have transitioned from wireline telephone service to interconnected VoIP service. (9)Users of interconnected VoIP service often use the service as the primary telephone line for their residences and businesses. (10)Users of interconnected VoIP service that have telephone numbers through the service should be protected from the same vulnerabilities that affected third-party billing through wireline telephone numbers. (11)In increasing numbers, wireless users are making the same complaints that wireline telephone users have been making since the 1990s. (12)Wireless users are reporting unauthorized third-party charges on their wireless bills for services they did not enroll in.

Unauthorized third-party charges

(a)

In general

Section 258 of the Communications Act of 1934 (47 U.S.C. 258) is amended— (1)by amending the heading to read as follows:

Sec. 258. Preventing illegal changes in subscriber carrier sections and unauthorized third-party charges.

; and (2)by adding at the end the following:

(c)

Prohibition

(1)

In general

No local exchange carrier or provider of interconnected VoIP service shall place a third-party charge that is not directly related to the provision of telephone services on the bill of a customer, unless— (A)the third-party charge is from a certified third-party vendor; (B)the third-party charge is for a product or service that a local exchange carrier or provider of interconnected VoIP service jointly markets or jointly sells with its own service; (C)the customer affirmatively consented to the placement of the third-party charge on the bill; and (D)the local exchange carrier or provider of interconnected VoIP service has a good faith reason to believe that the third-party charge is for a product or service requested by the customer. (2)

Forfeiture

Any person who commits a violation under paragraph (1) shall be subject to a civil forfeiture, which shall be determined in accordance with section 503, except that the amount of the penalty shall be double the otherwise applicable amount of the penalty under section 503. (3)

Definitions

In this subsection: (A)

Certified third-party vendor

The term certified third-party vendor means a person that has a contractual right to receive billing and collection services from a local exchange carrier or a provider of interconnected VoIP service. (B)

Third-party charge

The term third-party charge means a charge for a product or service not provided by a local exchange carrier or a provider of interconnected VoIP service that is included on a bill for the services the local exchange carrier or provider of interconnected VoIP service offers to its customers.

(b)

Rulemaking

Not later than 90 days after the date of enactment of this Act, the Federal Communications Commission shall prescribe any rules necessary to implement the provisions of this section. (c)

Effective date

The Federal Communications Commission shall prescribe that any rule adopted under subsection (b) shall become effective not later than 1 year after the date of enactment of this Act.

Third-party charges on wireless bills

The Federal Communications Commission, in consultation with the Federal Trade Commission, shall promulgate, not later than 180 days after the date of enactment of this Act, rules to protect consumers from unauthorized third-party charges on wireless bills. The Federal Communications Commission, in promulgating the rules, shall— (1)ensure that a provider of wireless services gives each customer of wireless services the means to avoid receiving third-party charges on the wireless customer's wireless bill and clearly and conspicuously discloses this option to the wireless customer; (2)establish procedures for a provider of wireless services to follow to ensure that third-party charges placed on a wireless customer's wireless bill have been authorized by the wireless customer; and (3)establish procedures to enable a wireless customer to seek and receive, directly from the provider of wireless services, reimbursement for any unauthorized third-party charges in a timely manner.