A bill to prohibit unauthorized third-party charges on wireline telephone bills, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Telephone Billing Act of 
2012''.

SEC. 2. FINDINGS.

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

SEC. 3. UNAUTHORIZED THIRD-PARTY CHARGES.

    (a) In General.--Section 258 of the Communications Act of 1934 (47 
U.S.C. 258) is amended--
            (1) by amending the heading to read as follows: ``sec. 258. 
        preventing illegal changes in subscriber carrier sections and 
        unauthorized third-party charges.''; and
            (2) by adding at the end the following:
    ``(c) Prohibition.--
            ``(1) In general.--No local exchange carrier or provider of 
        interconnected VoIP service shall place a third-party charge 
        that is not directly related to the provision of telephone 
        services on the bill of a customer, unless--
                    ``(A) the third-party charge is from a certified 
                third-party vendor;
                    ``(B) the third-party charge is for a product or 
                service that a local exchange carrier or provider of 
                interconnected VoIP service jointly markets or jointly 
                sells with its own service;
                    ``(C) the customer affirmatively consented to the 
                placement of the third-party charge on the bill; and
                    ``(D) the local exchange carrier or provider of 
                interconnected VoIP service has a good faith reason to 
                believe that the third-party charge is for a product or 
                service requested by the customer.
            ``(2) Forfeiture.--Any person who commits a violation under 
        paragraph (1) shall be subject to a civil forfeiture, which 
        shall be determined in accordance with section 503, except that 
        the amount of the penalty shall be double the otherwise 
        applicable amount of the penalty under section 503.
            ``(3) Definitions.--In this subsection:
                    ``(A) Certified third-party vendor.--The term 
                `certified third-party vendor' means a person that has 
                a contractual right to receive billing and collection 
                services from a local exchange carrier or a provider of 
                interconnected VoIP service.
                    ``(B) Third-party charge.--The term `third-party 
                charge' means a charge for a product or service not 
                provided by a local exchange carrier or a provider of 
                interconnected VoIP service that is included on a bill 
                for the services the local exchange carrier or provider 
                of interconnected VoIP service offers to its 
                customers.''.
    (b) Rulemaking.--Not later than 90 days after the date of enactment 
of this Act, the Federal Communications Commission shall prescribe any 
rules necessary to implement the provisions of this section.
    (c) Effective Date.--The Federal Communications Commission shall 
prescribe that any rule adopted under subsection (b) shall become 
effective not later than 1 year after the date of enactment of this 
Act.

SEC. 4. THIRD-PARTY CHARGES ON WIRELESS BILLS.

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

Summary: Fair Telephone Billing Act of 2012 - Amends the Communications Act of 1934 to prohibit local exchange carriers or providers of interconnected VoIP service from placing a third-party charge that is not directly related to the provision of telephone services on the bill of a customer, unless the third-party charge is: (1) from a certified third-party vendor, (2) for a product or service that the carrier or provider markets or sells jointly with its own service, and (3) consented to and believed to be requested by the customer. Defines a third-party charge as a charge for a product or service not provided by a local exchange carrier or a provider of interconnected VoIP service that is included on a bill for the services the local exchange carrier or provider of interconnected VoIP service offers to its customers. Subjects violators to civil forfeiture and specified penalties. Directs the Federal Communications Commission (FCC) to promulgate rules to: (1) ensure that a provider of wireless services gives each customer the means to avoid receiving third-party charges on the wireless customer's wireless bill and discloses such an option clearly and conspicuously, (2) establish procedures for such a provider to ensure that third-party charges have been authorized by the wireless customer. And (3) enable a wireless customer to seek and receive reimbursement from the provider for any unauthorized third-party charges.