[Congressional Record Volume 156, Number 95 (Wednesday, June 23, 2010)]
[House]
[Pages H4698-H4701]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CALLING CARD CONSUMER PROTECTION ACT
Ms. MATSUI. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 3993) to require accurate and reasonable disclosure of the
terms and conditions of prepaid telephone calling cards and services,
as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 3993
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. DEFINITIONS.
For purposes of this Act, the following definitions apply:
(1) The term ``Commission'' means the Federal Trade
Commission.
(2) The term ``prepaid calling card'' has the meaning given
the term ``prepaid calling card'' by section 64.5000(a) of
the Federal Communications Commission's regulations (47
C.F.R. 64.5000(a)). Such term shall also include calling
cards that use VoIP service or a successor protocol. Such
term shall also include an electronic or other mechanism that
allows users to pay in advance for a specified amount of
calling. Such term shall not include--
(A) calling cards or other rights of use that are provided
for free or at no additional cost as a promotional item
accompanying a product or service purchased by a consumer;
(B) any card, device, or other right of use, the purchase
of which establishes a customer-carrier relationship with a
provider of wireless telecommunications service or wireless
hybrid service, or that provides access to a wireless
telecommunications service or wireless hybrid service account
wherein the purchaser has a pre-existing relationship with
the wireless service provider; or
(C) payphone service, as that term is defined in section
276(d) of the Communications Act of 1934 (47 U.S.C. 276(d)).
(3) The term ``prepaid calling card provider'' has the
meaning given the term ``prepaid calling card provider'' by
section 64.5000(b) of the Federal Communications Commission's
regulations (47 C.F.R. 64.5000(b)). Such term shall also
include--
(A) a provider of a prepaid calling card that uses VoIP
service or a successor protocol; and
(B) a provider of a prepaid calling card that allows users
to pay in advance for a specified amount of minutes through
an electronic or other mechanism.
(4) The term ``prepaid calling card distributor'' means any
entity or person that purchases prepaid calling cards from a
prepaid calling card provider or another prepaid calling card
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--
(A) any retail seller whose only activity with respect to
the sale of prepaid calling cards is point-of-sale
transactions with end-user customers; or
(B) any person whose only activity with respect to the sale
of prepaid calling cards is the transport or delivery of such
cards.
(5) The term ``wireless hybrid service'' is defined as a
service that integrates both commercial mobile radio service
(as defined by section 20.3 of the Federal Communications
Commission's regulations (47 C.F.R. 20.3)) and VoIP service.
(6) The term ``VoIP service'' has the meaning given the
term ``interconnected Voice over Internet protocol service''
by section 9.3 of the Federal Communications Commission's
regulations (47 C.F.R. 9.3). Such term shall include any
voice calling service that utilizes a voice over Internet
protocol or any successor protocol in the transmission of the
call.
(7) The term ``fees'' includes all charges, fees, taxes, or
surcharges applicable to a prepaid calling card that are--
(A) required by Federal law or regulation or order of the
Federal Communications Commission or by the laws and
regulations of any State or political subdivision of a State;
or
(B) expressly permitted to be assessed under Federal law or
regulation or order of the Federal Communications Commission
or under the laws and regulations of any State or political
subdivision of a State.
(8) The term ``additional charge'' means any charge
assessed by a prepaid calling card provider or prepaid
calling card distributor for the use of a prepaid calling
card, other than a fee or rate.
(9) The term ``international preferred destination'' means
one or more specific international destinations named on a
prepaid calling card or on the packaging material
accompanying a prepaid calling card.
SEC. 3. REQUIRED DISCLOSURES OF PREPAID CALLING CARDS.
(a) Required Disclosure.--Any prepaid calling card provider
or prepaid calling card distributor shall accurately disclose
the following information relating to the terms and
conditions of the prepaid calling card:
(1) The name of the prepaid calling card provider and such
provider's customer service telephone number and hours of
service, except that the hours of service may not be
[[Page H4699]]
required to be disclosed if the provider's customer service
is provided and available 24 hours a day, 7 days per week.
(2)(A) The number of domestic interstate minutes available
from the prepaid calling card and the number of available
minutes for all international preferred destinations served
by the prepaid calling card at the time of purchase; or
(B) the dollar value of the prepaid calling card, the
domestic interstate rate per minute provided by such card,
and the applicable per minute rates for all international
preferred destinations served by the prepaid calling card at
the time of purchase.
(3)(A) The applicable per minute rate for all individual
international destinations served by the card at the time of
purchase; or
(B) a toll-free customer service number and website (if the
provider maintains a website) where a consumer may obtain the
information described in subparagraph (A) and a statement
that such information may be obtained through such toll-free
customer service number and website.
(4) The following terms and conditions pertaining to, or
associated with, the use of the prepaid calling card:
(A) Any applicable fees associated with the use of the
prepaid calling card.
(B) A description of any additional charges associated with
the use of the prepaid calling card and the amount of such
charges.
(C) Any limitation on the use or period of time for which
the promoted or advertised minutes or rates will be
available.
(D) A description of the applicable policies relating to
refund, recharge, and any predetermined decrease in value of
such card over a period of time.
(E) Any expiration date applicable to the prepaid calling
card or the minutes available with such calling card.
(b) Location of Disclosure and Language Requirement.--
(1) Clear and conspicuous.--
(A) Cards.--The disclosures required under subsection (a)
shall be printed in plain English language (except as
provided in paragraph (2)) in a clear and conspicuous manner
and location on the prepaid calling card, except as the
Commission may provide under paragraph (3). If the card is
enclosed in packaging that obscures the disclosures on the
card, such disclosures also shall be printed on the outside
packaging of the card.
(B) Online services.--In addition to the requirements under
subparagraph (A), in the case of a prepaid calling card that
consumers purchase via the Internet, the disclosures required
under subsection (a) shall be displayed in plain English
language (except as provided in paragraph (2)) in a clear and
conspicuous manner and location on the Internet website that
the consumer must access prior to purchasing such card.
(C) Advertising and other promotional material.--Any
advertising or other promotional material for a prepaid
calling card that contains any representation, expressly or
by implication, regarding the dollar value, the per minute
rate, or the number of minutes provided by the card shall
include in a clear and conspicuous manner and location all
the disclosures described in subsection (a), except as the
Commission may provide under paragraph (3).
(2) Foreign languages.--If a language other than English is
prominently used on a prepaid calling card, its packaging, or
in point-of-sale advertising, Internet advertising, or
promotional material for such card, the disclosures required
by this section shall be disclosed in that language on such
card, packaging, advertisement, or promotional material.
(3) Different location of certain information as determined
by commission.--Notwithstanding the requirements of paragraph
(1), the Commission may determine that some of the
information required to be disclosed pursuant to subsection
(a) does not need to be disclosed on the prepaid calling
card, advertising, or other promotional material, if the
Commission by regulation--
(A) requires the information to be otherwise disclosed and
available to consumers; and
(B) determines that--
(i) such disclosures provide for easy comprehension and
comparison by consumers; and
(ii) the remaining disclosures on the prepaid calling card,
advertising, or other promotional material, include
sufficient information to allow a consumer to effectively
inquire about or seek clarification of the services provided
by the calling card.
(c) Minutes Announced, Promoted, or Advertised Through
Voice Prompts.--Any information provided to a consumer by any
voice prompt given to the consumer at the time the consumer
uses the prepaid calling card relating to the remaining value
of the calling card or the number of minutes available from
the calling card shall be accurate, taking into account the
application of the fees and additional charges required to be
disclosed under subsection (a).
(d) Disclosures Required Upon Purchase of Additional
Minutes.--If a prepaid calling card permits a consumer to add
value to the card or purchase additional minutes after the
original purchase of the prepaid calling card, any changes to
the rates or additional charges required to be disclosed
under subsection (a) shall apply only to the additional
minutes to be purchased and shall be disclosed clearly and
conspicuously to the consumer before the completion of such
purchase.
(e) No False, Misleading, or Deceptive Disclosures.--No
prepaid calling card, packaging, advertisement, or other
promotional material containing a disclosure required
pursuant to this section shall contain any false, misleading,
or deceptive representations relating to the terms and
conditions of the prepaid calling card.
SEC. 4. FEDERAL TRADE COMMISSION AUTHORITY.
(a) Unfair and Deceptive Act or Practice.--A violation of
section 3 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 any provision of the Federal
Trade Commission Act or any other provision of law, common
carriers subject to the Communications Act of 1934 (47 U.S.C.
151 et seq.) and any amendment thereto shall be subject to
the jurisdiction of the Commission for purposes of this Act.
(c) Rulemaking Authority.--Not later than 1 year after the
date of enactment of this Act, the Commission shall, in
consultation with the Federal Communications Commission and
in accordance with section 553 of title 5, United States
Code, issue regulations to carry out this Act. In
promulgating such regulations, the Commission shall--
(1) take into consideration the need for clear disclosures
that provide for easy comprehension and comparison by
consumers, taking into account the size of prepaid calling
cards; and
(2) give due consideration to the views of the Federal
Communications Commission with regard to matters for which
that Commission has particular expertise and authority and
shall take into consideration the views of States.
In promulgating such regulations, the Commission may
prescribe requirements concerning the order, format,
presentation, and design of disclosures required by this Act
and may establish and require the use of uniform terms,
symbols, or categories to describe or disclose fees and
additional charges, if the Commission finds that such
requirements will assist consumers in making purchasing
decisions and effectuate the purposes of this Act. The
Commission shall not issue regulations that otherwise specify
the rates, terms, and conditions of prepaid calling cards.
(d) Savings Provision.--Nothing in this Act shall be
construed to limit the authority of the Commission under any
other provision of law. Except to the extent expressly
provided in this Act, nothing in this Act shall be construed
to alter or affect the exemption for common carriers provided
by section 5(a)(2) of the Federal Trade Commission Act (15
U.S.C. 45(a)(2)). Nothing in this Act is intended to limit
the authority of the Federal Communications Commission.
(e) Coordination.--If the Federal Communications Commission
initiates a rulemaking proceeding to establish requirements
relating to the disclosure of terms and conditions of prepaid
calling cards, the Federal Communications Commission shall
coordinate with the Federal Trade Commission to ensure that
any such requirements are not inconsistent with the
requirements of this Act and the regulations issued under
subsection (c).
SEC. 5. 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
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 utility commission or other consumer protection agency,
if authorized by State law, or the State, as parens patriae,
may bring a civil action on behalf of the residents of that
State in an appropriate district court of the United States
or any other court of competent jurisdiction to--
(A) enjoin that practice;
(B) enforce compliance with this Act;
(C) obtain damages, restitution, or other compensation on
behalf of residents of the State; or
(D) obtain such other relief as the court may consider to
be appropriate.
(2) Notice to the commission.--
(A) In general.--Before filing an action under paragraph
(1), the 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 a State under this
subsection, if the attorney general or other appropriate
officer 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 State shall provide notice and a copy of the complaint to
the Commission at the same time as the State files the
action.
(b) Intervention by Commission.--
(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.
[[Page H4700]]
(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;
(B) to remove the action to the appropriate United States
District Court; and
(C) to file a petition for appeal.
(c) Construction.--For purposes of bringing any civil
action under subsection (a), nothing in this section shall be
construed to prevent an attorney general of a State, a State
utility commission, or other consumer protection agency
authorized by State law from exercising the powers conferred
on the attorney general or other appropriate official by the
laws of that State to--
(1) conduct investigations;
(2) administer oaths or affirmations;
(3) compel the attendance of witnesses or the production of
documentary and other evidence; or
(4) enforce any State law.
(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, or any regulation
issued under 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 this Act or regulation.
SEC. 6. APPLICATION.
This Act shall apply to--
(1) any prepaid calling card issued or placed into the
stream of commerce beginning 180 days after the date on which
final regulations are promulgated pursuant to section 4(c);
and
(2) any advertising, promotion, point-of-sale material or
voice prompt regarding a prepaid calling card that is
disseminated beginning 180 days after the date on which final
regulations are promulgated pursuant to section 4(c).
SEC. 7. EFFECT ON STATE LAWS.
After the date on which final regulations are promulgated
pursuant to section 4(c), no State or political subdivision
of a State may establish or continue in effect any provision
of law that contains requirements regarding disclosures to be
printed on prepaid calling cards or packaging unless such
requirements are identical to the requirements of section 3.
SEC. 8. STUDIES.
(a) GAO Study.--Beginning 2 years after the date on which
final regulations are promulgated pursuant to section 4(c),
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 Congress
not later than 3 years after the date of enactment of this
Act.
(b) FTC Study.--The Commission shall, in consultation with
the Federal Communications Commission, conduct a study of the
extent to which the business practices of the prepaid calling
card industry intended to be addressed by this Act exist in
the prepaid wireless industry and shall submit a report of
such study, including recommendations, if any, to Congress
not later than 3 years after the date of enactment of this
Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
California (Ms. Matsui) and the gentleman from Kentucky (Mr. Whitfield)
each will control 20 minutes.
The Chair recognizes the gentlewoman from California.
General Leave
Ms. MATSUI. Madam Speaker, I ask unanimous consent that all Members
have 5 legislative days in which to revise and extend their remarks and
include extraneous material in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from California?
There was no objection.
Ms. MATSUI. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I rise in strong support of H.R. 3993, the Calling
Card Consumer Protection Act. I want to thank Mr. Engel for introducing
this important piece of legislation, and Chairmen Waxman and Rush for
their leadership in guiding the bill through the committee.
I am pleased that the House is taking up this important bipartisan
measure which will prevent fraud and abuse in the prepaid calling card
industry. The bill was voice-voted out of the Energy and Commerce
Committee.
American consumers spend billions of dollars on prepaid calling
cards. These cards are generally marketed to a particular group of
consumers, including immigrants, college students, seniors, and
military personnel. Unfortunately, the prepaid calling card market is
rife with fraudulent and deceptive practices. Many prepaid calling
cards fail to deliver the full number of advertised minutes. Cards
often contain hidden charges, such as connection fees, maintenance
fees, and disconnect fees, as well as inconsistent rates per minute.
In short, consumers often find that because of misleading
information, inconsistent claims, and buried disclosures, they are left
with an insufficient product with little or no recourse. To address
these issues and protect American consumers, H.R. 3993 will require
calling card providers and distributors to clearly and conspicuously
disclose all relevant information so that consumers can make informed
choices.
{time} 1240
These disclosures would include critical information such as contact
information for the provider, the number of minutes available or the
dollar value of the card.
Importantly, H.R. 3993 would mean the end of hidden fees in the
prepaid calling card market. Entities would be required to disclose all
fees, charges, limitations, changes in value, or other terms that
impact the use of the card.
Consumers who purchase prepaid calling cards should get what they pay
for. If they don't, consumers should have recourse, and bad actors
should face tough enforcement.
I urge my colleagues to support H.R. 3993, and I reserve the balance
of my time.
Mr. WHITFIELD. I yield myself such time as I may consume.
Madam Speaker, I rise today in support of H.R. 3993, the Calling Card
Consumer Protection Act. We have a lot of students and military
personnel around this country who depend on prepaid calling cards.
Unfortunately, we have discovered that the majority of prepaid cards
only deliver 50 to 60 percent of the minutes advertised. While a
private enterprise certainly has the right to shape its business model
as it sees fit, it does not have the right to misinform and to mistreat
customers with exorbitant hang-up fees and maintenance fees, and as I
said, many people who have prepaid cards simply do not know what they
actually provide them.
That is why H.R. 3993 is so important. It is going to go a long way
toward preventing these occurrences in the future. This legislation
will ensure that consumers are better informed by requiring an accurate
and reasonable disclosure of the terms and conditions of prepaid
telephone calling cards and services.
Under the bill, prepaid calling card providers would have to clearly
disclose how many minutes they offer and the prices for those minutes.
They would also have to clearly disclose any additional fees levied on
the consumer as well as the card's expiration date and other relevant
information.
I want to especially thank my colleagues on the other side of the
aisle--and certainly Mr. Engel, who introduced this bill--for working
so closely with the minority on this important issue. Because of our
working together, we have a bill that, I believe, helps consumers
without unduly hampering the industry. This legislation includes
commonsense preemption standards, liability exemptions for retailers,
which is very important, and, of course, strong protections for the
consumer.
I would urge all of my colleagues to support this important
legislation, and I reserve the balance of my time.
Ms. MATSUI. Madam Speaker, I yield such time as he may consume to the
gentleman from New York (Mr. Engel), the sponsor of this bill.
Mr. ENGEL. I thank the gentlewoman from California, my good friend,
Congresswoman Matsui, and I thank the gentleman, Mr. Whitfield, for his
kind remarks.
Madam Speaker, I stand here in support of my legislation, H.R. 3993,
the Calling Card Consumer Protection Act.
I want to thank my good friends Chairman Waxman, who is the chairman
of our Energy and Commerce Committee; Bobby Rush, who is the chairman
of the Consumer Protection Subcommittee; as well as Joe Barton and
George Radanovich, who are the ranking members of the full committee
and subcommittee.
As my colleagues have mentioned, calling cards are an invaluable
resource for a number of people who make frequent long distance or
overseas calls. Students, members of the Armed Forces, and those whose
families live outside of the country regularly use these cards to call
home. The cards are also popular among people who either choose not to
subscribe to long distance telephone services or who cannot afford
them. They are a necessary tool for keeping in touch with
[[Page H4701]]
friends or with family members. Calling cards that provide the services
that the companies advertise can save consumers a great deal of money
when they call home.
Unfortunately, as my colleagues have mentioned, as we see all too
often, a number of unscrupulous companies are failing to keep their
advertised terms. I first learned of this issue about 3 years ago when
I heard from a number of constituents who said that their prepaid
calling cards were not delivering the number of minutes that they
advertised. In fact, many were not even close to delivering the
promised number of minutes.
When I heard about these problems, I purchased a calling card to
investigate the problem for myself. What shocked me--although, it
should come as no surprise to anybody now--is that I found the exact
same problems my constituents were having. One of those companies
promised me a certain number of minutes, and I found that it was a
complete fabrication. I did not receive even close to the number of
minutes that the card advertised. This is when I decided to introduce
my legislation to ban this practice.
I have read studies conducted by States' attorneys general as well as
by independent groups showing that many calling cards provide far fewer
minutes than are advertised. One study by the Hispanic Institute found,
on average, that the caller only received about 60 percent of the
minutes guaranteed by the card. I recently read that the prepaid
calling card industry takes in $4 billion a year in revenue. If the
cards are only providing 60 percent of the minutes, each one of us can
do the math.
This deception is costing consumers and honest companies hundreds of
millions of dollars every year. Calling card fraud harms segments of
the population which are among the most vulnerable to being victimized
by unscrupulous companies only seeking to make quick profits. Companies
will target poor, minority, and immigrant populations, and they don't
stop there. They have even preyed upon our soldiers in Iraq and
Afghanistan. This is unconscionable.
As was mentioned, there are so many ways that they use fraudulent
terms. There are different fees. If you call and don't get anyone home,
there is a fee. If you call and someone hangs up, there is a fee. There
are all kinds of hidden fees in terms of what time you can call and
what day you can call. It just gets ridiculous.
In an article in BusinessWeek magazine, the author detailed one
example of a company that marketed toward Spanish-speaking consumers.
It had packaging with Spanish language information, but the fine print
that detailed all the various fees they would charge the user was in
English. When confronted about this deception, the company simply said,
``We're in America.'' They had the audacity to claim that, even when
they put Spanish language advertisements in markets with Spanish-
speaking consumers, they could hide all of their fees in English.
This legislation will put a stop to a number of deceptive practices
employed by unscrupulous companies. It would simply require calling
cards and advertisements to include the clear disclosure of all terms,
conditions, and fees in the language in which the calling card is
advertised. Just like the nutrition information on a box of cereal,
consumers should be able to quickly and easily compare two products
side by side.
I would strongly encourage all Members to support this bipartisan
and, as Mr. Whitfield pointed out, well-thought-out legislation. I
thank everyone for marking up this legislation today.
Mr. WHITFIELD. Madam Speaker, this issue is so important that I yield
2 minutes to the gentleman from Indiana (Mr. Burton).
Mr. BURTON of Indiana. I won't take 2 minutes, Madam Speaker.
I would just like to say that my colleague who just spoke, Mr. Engel,
and I became aware of this some time ago when one of the people we
know, who is in this business, brought to our attention the way some of
these companies have been so unscrupulous in bilking the public out of
the minutes that they pay for.
I am very happy that Congressman Engel has introduced this bill.
Though, I only wish I'd known about it because I certainly would have
wanted to have been a cosponsor on it. You may rest assured that I will
support it, and I hope that all of my colleagues will because it is
unconscionable that the American people would buy something like this,
especially military personnel, knowing that they are going to be able
to call their loved ones, then to find out that they've been
shortchanged. It's almost a criminal act. I think we ought to look down
the road. If this is being done intentionally by these calling card
companies, there possibly ought to be some prosecutions that take
place.
Mr. WHITFIELD. Madam Speaker, I yield back the balance of my time.
Ms. MATSUI. Madam Speaker, H.R. 3993 will protect consumers from
faulty and deceptive calling cards.
Again, I want to thank my colleague, Representative Engel, for his
work on this legislation.
This bill is bipartisan, and I urge my colleagues to support this
legislation.
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from California (Ms. Matsui) that the House suspend the
rules and pass the bill, H.R. 3993, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Ms. MATSUI. Madam Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
____________________