Freedom From Toll Fraud Act

Summary: Freedom from Toll Fraud Act - Amends the Communications Act of 1934 to revise the requirements that must be met in order to charge the calling party for information provided during a call to a toll free (800) number. 
Amends the Telephone Disclosure and Dispute Resolution Act (TDDRA) to modify the definition of "pay-per-call services" to allow the Federal Trade Commission to extend the definition to other services providing audio information or audio entertainment if the Commission determines that such services are susceptible to the unfair and deceptive practices prohibited by rules prescribed under specified provisions of the TDDRA.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Freedom From Toll Fraud Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Reforms required by the Telephone Disclosure and 
        Dispute Resolution Act of 1992 have improved the reputation of 
        the pay-per-call industry and resulted in regulations that have 
        reduced the incidence of misleading practices that are harmful 
        to the public interest.
            (2) Among the successful reforms is a prohibition on 
        charges being assessed for calls to 800 telephone numbers or 
        other telephone numbers advertised or widely understood to be 
        toll free.
            (3) Nevertheless, certain interstate pay-per-call 
        businesses are taking advantage of an exception in the 
        prohibition on charging for information conveyed during a call 
        to a ``toll-free'' number to continue to engage in misleading 
        practices. These practices are not in compliance with the 
        intent of Congress in passing the Telephone Disclosure and 
        Dispute Resolution Act.
            (4) Therefore, it is necessary for Congress to clarify that 
        its intent is that charges for information provided during a 
        call to an 800 number or other number widely advertised and 
        understood to be toll free shall not be assessed to the calling 
        party unless the calling party agrees to be billed according to 
        the terms of a written subscription agreement.

SEC. 2. AMENDMENT TO THE COMMUNICATIONS ACT OF 1934.

    (a) Amendment.--Section 228(c) of the Communications Act of 1934 
(47 U.S.C. 228(c)) is amended--
            (1) by striking subparagraph (C) of paragraph (7) and 
        inserting the following:
                    ``(C) the calling party being charged for 
                information conveyed during the call unless--
                            ``(i) the calling party has a written 
                        subscription agreement with the information 
                        provider that meets the requirements of 
                        paragraph (8); or
                            ``(ii) the calling party is charged in 
                        accordance with paragraph (9); or''; and
            (2) by adding at the end the following new paragraphs:
            ``(8) Subscription agreements for billing for information 
        provided via toll-free calls.--
                    ``(A) In general.--For purposes of paragraph 
                (7)(C)(i), a written subscription agreement shall 
                specify the terms and conditions under which the 
                information is offered and include--
                            ``(i) the rate at which charges are 
                        assessed for the information;
                            ``(ii) the information provider's name;
                            ``(iii) the information provider's business 
                        address;
                            ``(iv) the information provider's regular 
                        business telephone number;
                            ``(v) the information provider's agreement 
                        to notify the subscriber at least 30 days in 
                        advance of all future changes in the rates 
                        charged for the information;
                            ``(vi) the signature of a legally competent 
                        subscriber agreeing to the terms of the 
                        agreement; and
                            ``(vii) the subscriber's choice of payment 
                        method, which may be by phone bill or credit or 
                        calling card.
                    ``(B) Billing arrangements.--If a subscriber 
                elects, pursuant to subparagraph (A)(vii), to pay by 
                means of a phone bill--
                            ``(i) the agreement shall clearly explain 
                        that the subscriber will be assessed for calls 
                        made to the information service from the 
                        subscribers phone line;
                            ``(ii) the phone bill shall include, in 
                        prominent type, the following disclaimer:
                                    `Common carriers may not disconnect 
                                local or long distance telephone 
                                service for failure to pay disputed 
                                charges for information services.'; and
                            ``(iii) the phone bill shall clearly list 
                        the 800 number dialed.
                    ``(C) Use of pin's to prevent unauthorized use.--A 
                written agreement does not meet the requirements of 
                this paragraph unless it provides the subscriber a 
                personal identification number to obtain access to the 
                information provided, and includes instructions on its 
                use.
                    ``(D) Exceptions.--Notwithstanding paragraph 
                (7)(C), a written agreement that meets the requirements 
                of this paragraph is not required--
                            ``(i) for services provided pursuant to a 
                        tariff that has been approved or permitted to 
                        take effect by the Commission or a State 
                        commission; or
                            ``(ii) for any purchase of goods or of 
                        services that are not information services.
                    ``(E) Termination of service.--On complaint by any 
                person, a carrier may terminate the provision of 
                service to an information provider unless the provider 
                supplies evidence of a written agreement that meets the 
                requirements of this section. The remedies provided in 
                this paragraph are in addition to any other remedies 
                that are available under title V of this Act.
            ``(9) Charges by credit or calling card in absence of 
        agreement.--For purposes of paragraph (7)(C)(ii), a calling 
        party is not charged in accordance with this paragraph unless 
        the calling party is charged by means of a credit or calling 
        card and the information service provider includes in response 
        to each call an introductory disclosure message that--
                    ``(A) clearly states that there is a charge for the 
                call;
                    ``(B) clearly states the service's total cost per 
                minute and any other fees for the service or for any 
                service to which the caller may be transferred;
                    ``(C) explains that the charges must be billed on 
                either a credit or calling card;
                    ``(D) asks the caller for the credit or calling 
                card number;
                    ``(E) clearly states that charges for the call 
                begin at the end of the introductory message; and
                    ``(F) clearly states that the caller can hang up at 
                or before the end of the introductory message without 
                incurring any charge whatsoever.
            ``(10) Definition of calling card.--As used in this 
        subsection, the term `calling card' means an identifying number 
        or code unique to the individual, that is issued to the 
        individual by a common carrier and enables the individual to be 
        charged by means of a phone bill for charges incurred 
        independent of where the call originates.''.
    (b) Regulations.--The Federal Communications Commission shall 
revise its regulations to comply with the amendment made by subsection 
(a) of this section within 180 days after the date of enactment of this 
Act.

SEC. 3. AMENDMENT TO TITLE II OF TDDRA.

    Section 204(1) of the Telephone Disclosure and Dispute Resolution 
Act is amended to read as follows:
            ``(1) The term `pay-per-call services' has the meaning 
        provided in section 228(i)(1) of the Communications Act of 
        1934, except that the Commission by rule may, notwithstanding 
        subparagraphs (B) and (C) of such section, extend such 
        definition to other similar services providing audio 
        information or audio entertainment if the Commission determines 
        that such services are susceptible to the unfair and deceptive 
        practices that are prohibited by the rules prescribed pursuant 
        to section 201(a).''.