Subcommittee Markup of HR 3993, the Calling Card Consumer Protection Act, 3/24/2010.

HR 3993 [LOC | WW], the "Calling Card Consumer Protection Act", Subcommittee Markup.
Date: March 24, 2010.

Editor's Notes:
• This document displays the language of the bill as introduced [16 pages in PDF] on November 3, 2009, with changes made by the House Commerce Committee's (HCC) Subcommittee on Commerce, Trade and Consumer Protection on March 24, 2010, by adoption of the manager's amendment [5 pages in PDF].
• No other amendments were approved at this markup.
• Committee staff may make further technical and conforming amendments.
• Deletions are shown in strikethrough. Additions are shown in red.
• TLJ added hyperlinks.
• Copyright Tech Law Journal.

A BILL

To require accurate and reasonable disclosure of the terms and conditions of prepaid telephone calling cards and services.

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

(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 ~~in a clear and conspicuous manner~~ 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 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.

(D) ~~Applicable~~ 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).

(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 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 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 clearly and conspicuously disclosed 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. ~~ENFORCEMENT BY THE FEDERAL TRADE COMMISSION~~ 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 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~~ 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 ~~affect~~ 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 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;

(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) 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~~ 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 ~~90 days~~ 180 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.

Nothing in this Act shall affect the authority of any State to establish or continue in effect a provision of the law of a State relating to regulation of prepaid calling cards, prepaid calling card distributors, prepaid calling services, or prepaid calling service providers, except to the extent that such provision of law is inconsistent with the provisions of this Act or a regulation prescribed under this Act, and then only to the extent of such inconsistency. A provision of the law of a State is not inconsistent with this Act or a regulation prescribed under this Act if such provision provides equal or greater protection to consumers than what is provided under this Act or the regulations prescribed under this Act.

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. ~~GAO STUDY~~ STUDIES.

~~Beginning~~ (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.