[Congressional Record (Bound Edition), Volume 154 (2008), Part 16]
[House]
[Pages 21846-21850]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  1815
                  CALLING CARD CONSUMER PROTECTION ACT

  Mr. RUSH. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 3402) 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. 3402

       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.
       (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 disclose clearly 
     and conspicuously 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.
       (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) 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. 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 for a prepaid

[[Page 21847]]

     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).
       (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.
       (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 to the 
     consumer before the completion of such purchase.

     SEC. 4. ENFORCEMENT BY THE FEDERAL TRADE COMMISSION.

       (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 and solely 
     for purposes of this Act, 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.
       (c) Rulemaking Authority.--Not later than 180 days 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 shall not 
     issue regulations that otherwise affect 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.

     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 a district court of the United States of appropriate 
     jurisdiction, or any other court of competent jurisdiction 
     to--
       (A) enjoin that practice;
       (B) enforce compliance with this Act;
       (C) obtain damage, 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.
       (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.
       (e) 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.
       (f) Limitation.--No prepaid calling card distributor who is 
     a retail merchant or seller of prepaid calling cards, who, 
     with respect to such cards, is exclusively engaged in point-
     of-sale transactions may be liable for damages in an action 
     authorized under this section unless such distributor acted 
     with actual knowledge that the act or practice giving rise to 
     such action is unfair or deceptive and is unlawful under this 
     Act.

     SEC. 6. APPLICATION.

       This Act shall apply to--
       (1) any prepaid calling card issued or placed into the 
     stream of commerce beginning 90 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 90 days after the date on which final 
     regulations are promulgated pursuant to section 4(c).

     If the Commission determines that it is not feasible for 
     prepaid calling card providers or distributors to comply with 
     the requirements of this Act with respect to prepaid calling 
     cards issued or placed into the stream of commerce after such 
     90-day period, the Commission may extend such period by not 
     more than an additional 90 days.

     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 prescribes disclosure requirements with respect 
     to prepaid calling cards unless such requirements are 
     identical to the requirements of section 3.

     SEC. 8. G.A.O. 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.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Illinois (Mr. Rush) and the gentleman from Nebraska (Mr. Terry) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Illinois.


                             General Leave

  Mr. RUSH. Madam Speaker, I ask unanimous consent that all Members may 
have 5 legislative days to revise and extend their remarks and to 
include extraneous material on the bill under consideration.

[[Page 21848]]

  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Illinois?
  There was no objection.
  Mr. RUSH. Madam Speaker, I yield myself such time as I may consume.
  H.R. 3402, the Calling Card Consumer Protection Act, was introduced 
by my friend, Mr. Engel, and will help end calling card fraud that 
currently plagues communities across this Nation. It requires full and 
accurate disclosures on the fees, charges and terms that apply to 
calling cards, and it will go a long ways towards protecting innocent 
consumers.
  I urge the bill's adoption.
  Madam Speaker, I reserve the balance of my time.
  Mr. TERRY. Madam Speaker, I yield myself such time as I may consume.
  I rise in support of H.R. 3042, the Calling Card Consumer Protection 
Act.
  There is enormous fraud in the marketing and delivery of prepaid 
calling card services, reportedly up to as much as 30 percent to 40 
percent of the industry's revenue. Prepaid card fraud is not a new 
problem, but has grown into a $1 billion industry that has attracted an 
increasing number of new providers, some better than others.
  In many cases, the fraud is associated with the cards marketed to 
people from a specific region in the world with purported preferred 
rates to their country of origin. The States have responded to this 
problem with their own disclosure requirements and have increasingly 
brought enforcement actions against the bad actors, as has the Federal 
Trade Commission.
  H.R. 3402 attempts to put the Federal Trade Commission in a strong 
position to go after the bad actors and to mandate proper disclosures 
to consumers. A national law is helpful, because it provides 
consistency for providers and consumers, consistency for enforcement, 
and it reduces confusion across this market.
  In addition to preemption of State law for H.R. 3402 to be effective, 
it will have to apply to common carriers. We have crafted a very narrow 
enforcement authority for the FTC, solely for the purposes of this act, 
and I am glad we could do that on a bipartisan basis.
  Madam Speaker, I reserve the balance of my time.
  Mr. RUSH. Madam Speaker, I am pleased to yield 5 minutes to my 
friend, the author of this bill, the gentleman from New York (Mr. 
Engel).
  Mr. ENGEL. I thank my good friend, the gentleman from Illinois (Mr. 
Rush) for his hard work on this important issue. We are so delighted, 
Bobby, to see you back. We look forward to continuing our work with 
you. Thank you so much for everything you have done, and, also, the 
gentleman from Nebraska (Mr. Terry).
  I would to also thank our chairman of the Energy and Commerce 
Committee, Mr. Dingell, the gentleman from Michigan for his strong 
support of this legislation.
  This passed unanimously out of the Energy and Commerce Committee in a 
bipartisan way and in no small part due to the people I have mentioned 
before. I also want to thank the dedicated majority and minority staffs 
of the Consumer Protection and Telecommunications subcommittees for 
their diligent work in crafting an excellent bipartisan, compromise 
bill.
  Madam Speaker, the prepaid calling card market is a $4 billion 
industry. In a recent independent study it was found that, on average, 
companies failed to provide 40 percent of the minutes guaranteed by the 
card, costing consumers hundreds of millions of dollars a year.
  This fraud harms segments of the population who are least able to 
afford it, the poor, recent immigrants, minorities and seniors, and the 
companies don't stop there. They have even preyed upon our soldiers in 
Iraq and Afghanistan. This is unconscionable and obviously un-American. 
This legislation would end the deception and the fraud that these 
people have suffered at the hands of unscrupulous companies.
  Now, the bottom line for this bill is this is a consumer protection 
bill. If we are in favor of protecting the consumer, then we should 
vote for this bill, because it's very, very simple. People have a right 
to know that when they buy a prepaid calling card, what they see is 
what they get. If a card says you get 60 minutes of calling time, then 
that consumer who buys the card is entitled to 60 minutes of calling 
time.
  What we find in little small print that nobody can see or understand, 
there are so many hidden fees. Some calling cards say that you only can 
get the 60 minutes if you call at certain times. But if you don't call 
at other times, you don't get the minutes. Then the time you get the 
minutes is only from 2 to 4 a.m., which is ridiculous. Some cards 
charge you 3 units, 3 minutes of call time if you get a busy signal. Or 
3 minutes of call time if you are just connected, as for a connection 
charge, even if it was across the street or in the same State.
  So consumers don't want to think they are being defrauded. Consumers 
are entitled to get what they pay for. Sometimes there are companies 
that are very legitimate. Most of the companies are legitimate.
  If a company says that you get 60 minutes of calling card, and it's a 
legitimate card, and that card may be a little bit more expensive than 
the fraudulent card, the unsuspecting consumer will buy the cheaper 
card thinking that he or she will get a better deal, when, in reality, 
the 60 minutes may only be 30 or 32 or 35 minutes.
  The bottom line is this, if you are for the consumer, if you are for 
truth in marketing, then you should support this bill. If you are not, 
and you want things to go along the way they have been, then don't vote 
for the bill.
  I am so delighted that we have bipartisan consideration on this and 
that, in a bipartisan fashion, we all agree that this is something that 
really should pass.
  Nobody, nobody should be against this, not the telecom companies, not 
consumer groups, not any Members of Congress.
  If we want to stand for legitimacy and say that we want to protect 
the consumer, and that we want people to understand that when they 
purchase something, they know what they are getting, then we ought to 
all vote for this bill.
  I thank my colleagues. This is a tremendous victory for the consumers 
in America.
  Mr. TERRY. Madam Speaker, I yield 4 minutes to the gentleman from 
Kentucky.
  Mr. WHITFIELD of Kentucky. I certainly want to thank Chairman Rush 
and the Democratic staff and the Republican staff for working so 
diligently to pass not only the Calling Card Consumer Protection Act, 
but also the Travel Promotion Act. I certainly want to congratulate Mr. 
Engel for bringing this matter before the House. It certainly is an 
important issue, and we are all delighted that this bill is moving 
forward.
  Madam Speaker, I simply wanted to have a colloquy, if I could, with 
Chairman Rush about a couple of issues relating to this bill, and 
simply wanted to confirm with Mr. Rush the intent of certain provisions 
as they relate to small retailers that are selling these prepaid 
calling cards.
  I guess my question, Chairman Rush, is that if a retailer sells a 
card but is unaware that the calling card does not make all of the 
disclosures required by the act, will the retail merchant be subject to 
monetary penalties under sections 4 or 5 of the bill?
  Mr. RUSH. I want to assure the gentleman if the retailer knowingly 
sells fraudulent cards, it would be subject to FTC penalty. But if the 
seller, the retailer does not know that they are fraudulent cards, then 
the penalties would not apply, only injunctive relief.
  Mr. WHITFIELD of Kentucky. Thank you very much, Chairman Rush.
  To be clear, it is also my understanding that, obviously, to protect 
consumers, a retailer could be enjoined by the FTC, or State 
authorities, and required to stop selling fraudulent cards, which they 
should be required to stop, whether or not they knew the cards were 
fraudulent.
  Such retailer would not, however, it's my understanding, and I think 
you pointed this out, they would not be subject to civil penalties or 
damages unless they knew the cards were unlawful; is that correct?

[[Page 21849]]


  Mr. RUSH. The gentleman is correct.
  Mr. WHITFIELD of Kentucky. I thank the gentleman very much, and I 
just wanted to express once again, the pleasure of working with the 
chairman on this.
  We appreciate your great leadership.
  Once again, I want to thank the staffs on both sides of the aisle.
  Mr. ENGEL. Would the gentleman yield?
  Mr. WHITFIELD of Kentucky. Yes, sir.
  Mr. ENGEL. I thank the gentleman from Kentucky for bringing up that 
very important point. He should know, as I am sure he does, that there 
is no intent to penalize mom-and-pop store owners or anybody who may 
sell a card of this degree without any knowledge that there is 
something wrong with the card.
  The purpose of this legislation is to go after the companies who 
fraudulently manufacture and sell these cards, not to go after 
individual grocery stores or mom and pop stores that sell these cards. 
I definitely agree with the gentleman that if someone does not have a 
knowledge that they are selling the card that may be flawed, we should 
not in any way, shape or form penalize them. That is certainly not the 
intent of the bill.
  Mr. WHITFIELD of Kentucky. We certainly appreciate that clarification 
and look forward to the passage of this bill.
  Mr. DINGELL. Madam Speaker, I rise in strong support of an excellent 
and sorely needed piece of legislation, H.R. 3402, the ``Calling Card 
Consumer Protection Act''. This bill is intended to combat the fraud 
and deception that is rampant in the marketing of prepaid calling 
cards. Many of our consumers--especially recent immigrants, the poor, 
students, and members of the military and their families--are vitally 
dependent on these prepaid cards to keep in touch with family and 
friends.
  This bill requires providers and distributors of these cards to make 
full, clear, and honest disclosures on the cards, their packaging, and 
advertising materials. No more hidden charges. No more cards that do 
not deliver the minutes they promise. The bill empowers the Federal 
Trade Commission to enforce the Act. Violators would be subject to 
injunctive and other equitable relief to stop them from cheating 
consumers. If a violation is ``knowing'', they would be subject to 
civil penalties. In this way, the bill ensures that retailers who sell 
these dirty cards are subject only to injunctive relief, unless it can 
be shown that retailers knew the cards were fraudulent. Thus, we get 
the fraudulent cards off the market without punishing innocent 
retailers.
  This bill maximizes protections for consumers and maintains a clear 
line between the areas of expertise of two agencies--the Federal Trade 
Commission (FTC) and the Federal Communications Commission (FCC). The 
bill provides the FTC with limited jurisdiction over common carriers, 
but is careful to preserve FCC's jurisdiction over common carriers for 
all other purposes. The bill also appropriately excludes prepaid 
wireless services as the record has not demonstrated a need for 
requiring such disclosures.
  Once again, to promote uniform disclosures on cards bought across the 
United States, it provides a narrow preemption of State prepaid calling 
card disclosure requirements only. It preserves a strong enforcement 
role for State Attorneys General and public utility commissions.
  Finally, the bill mandates that the FTC conduct a rulemaking to 
ensure that all stakeholders--the calling card and telecommunications 
industry, States, and consumer groups--have a say in the final details 
of the uniform disclosure requirements that this legislation promotes.
  Madam Speaker, H.R. 3402 is thoughtful and balanced legislation that 
is critical to protect some of our most vulnerable consumers. This bill 
has strong bipartisan support. I want to commend the author of this 
bill, the gentleman from New York, Eliot Engel, for his fine 
leadership, and I urge Members to vote yes.
  Mrs. BONO MACK. Madam Speaker, I would like to express my opposition 
to the Calling Card Consumer Protection Act, H.R. 3402.
  Madam Speaker, I rise in opposition to H.R. 3402, the Calling Card 
Consumer Protection Act. This bill--while well-intentioned--would only 
add to an increase in regulatory confusion because it sets up a system 
where lateral government organizations will not only be enforcing laws 
but also issuing their own interpretations of those laws. This is 
inefficient and it will breed confusion and conflict.
  How can we reasonably expect multiple governmental organizations, in 
this instance the Federal Communications Commission and the Federal 
Trade Commission, to agree on the meaning of a particular statute when 
members of those individual commissions can't seem to agree among 
themselves? The truth is we can't and that is why the FCC and FTC dual 
authority provision should be corrected.
  Finally, I recognize that State attorneys general can play a role in 
enforcing a Federal statute. However, empowering multiple entities with 
this authority will only force American businesses to spend valuable 
resources fighting litigation rather than investing in infrastructure, 
jobs, and consumer services.
  Madam Speaker for these reasons I ask that my colleagues oppose H.R. 
3402.
  Ms. SCHAKOWSKY. Madam Speaker, I rise today in support of H.R. 3402, 
the Calling Card Consumer Protection Act. After years of deceptive and 
abusive marketing practice by the calling card industry, I am pleased 
to be here today to offer protection to our constituents who rely on 
the cards to stay in touch with their loved ones. The victims of 
calling card fraud are often the most vulnerable among us--they are 
low-income, immigrants, military families--in short, the ones who can 
least afford it. I think this is sensible legislation, and I thank my 
colleague and friend Congressman Eliot Engel for all of his hard work 
to enact this bill.
  I am proud to represent a diverse constituency and am proud to 
support the Calling Card Consumer Protection Act to crack down on those 
abuses. Too many people are lured in by promises of cheap overseas 
calls but end up getting less than half of what they paid for. These 
cards use hidden fees so creative and outlandish that they would almost 
be funny if they weren't so awful, and the practice must stop.
  The legislation before us today goes a long way toward solving this 
problem. It would require calling cards to clearly present what 
services they offer and any additional fees associated with the card. 
Most importantly, if someone buys a card that says it's good for 250 
minutes, they will receive those 250 minutes. Consumers deserve to get 
what they paid for.
  While I support H.R. 3402, I do want to express my concern with a 
couple of provisions in the bill, especially those that involve State 
standards and enforcement. Many States and the Federal Trade 
Commission, FTC, already have tools to address the many abuses related 
to the sale of prepaid calling cards. As we heard from the FTC 
Commissioner in our hearing, those States are at the forefront of 
cracking down on deceptive practices. Therefore, we need to be very 
careful about preempting States from setting or enforcing standards 
related to the cards.
  I believe that the disclosure preemption provision in H.R. 3402 
should set a floor, not a ceiling, and allow those States that want to 
enact stricter disclosure standards to do so. Illinois is on the 
forefront of policing calling cards, and our State law mandates strong 
disclosures that should not be preempted with weaker ones. I also hope 
that the FTC will solicit input from the States as they work to 
establish minimum standards.
  Finally, I also believe that retailers should be held responsible for 
selling cards that do not meet the Federal and State standards. 
Illinois State law requires retailers to obtain a proof that the 
underlying carrier is certified, with the underlying carrier and all 
resellers responsible for ensuring that the required disclosures are 
made. This is not a burdensome step for retailers to ensure that the 
product they sell is in compliance with the law, and this is a 
commonsense provision that should be included in H.R. 3402 as well.
  I look forward to working with Rep. Engel, my colleagues on 
Committee, and my friends on the Senate Commerce Committee to improve 
this bill and to see it enacted into law.
  Mr. TERRY. Madam Speaker, I yield back the balance of my time.
  Mr. RUSH. Madam Speaker, I have no other speakers, and we yield back 
the balance of our time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Illinois (Mr. Rush) that the House suspend the rules and 
pass the bill, H.R. 3402, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

[[Page 21850]]



                          ____________________