I 

111TH CONGRESS 

1ST SESSION H. R. 3993 

To require accurate and reasonable disclosure of the terms and conditions 

of prepaid telephone calling cards and services. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 3, 2009 

Mr. ENGEL introduced the following bill; which was referred to the Committee 

on Energy and Commerce 

A BILL 

To require accurate and reasonable disclosure of the terms 

and conditions of prepaid telephone calling cards and 

services. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Calling Card Consumer 

5 Protection Act’’. 

6 SEC. 2. DEFINITIONS. 

7 For purposes of this Act, the following definitions 

8 apply: 

9 (1) The term ‘‘Commission’’ means the Federal 

10 Trade Commission. 


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1 (2) The term ‘‘prepaid calling card’’ has the 

2 meaning given the term ‘‘prepaid calling card’’ by 

3 section 64.5000(a) of the Federal Communications 

4 Commission’s regulations (47 C.F.R. 64.5000(a)). 

5 Such term shall also include calling cards that use 

6 VoIP service or a successor protocol. Such term 

7 shall also include an electronic or other mechanism 

8 that allows users to pay in advance for a specified 

9 amount of calling. Such term shall not include— 

10 (A) calling cards or other rights of use 

11 that are provided for free or at no additional 

12 cost as a promotional item accompanying a 

13 product or service purchased by a consumer; 

14 (B) any card, device, or other right of use, 

15 the purchase of which establishes a customer16 carrier relationship with a provider of wireless 

17 telecommunications service or wireless hybrid 

18 service, or that provides access to a wireless 

19 telecommunications service or wireless hybrid 

20 service account wherein the purchaser has a 

21 pre-existing relationship with the wireless serv22 ice provider; or 

23 (C) payphone service, as that term is de24 fined in section 276(d) of the Communications 

25 Act of 1934 (47 U.S.C. 276(d)). 


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1 (3) The term ‘‘prepaid calling card provider’’ 

2 has the meaning given the term ‘‘prepaid calling 

3 card provider’’ by section 64.5000(b) of the Federal 

4 Communications Commission’s regulations (47 

5 C.F.R. 64.5000(b)). Such term shall also include— 

6 (A) a provider of a prepaid calling card 

7 that uses VoIP service or a successor protocol; 

8 and 

9 (B) a provider of a prepaid calling card 

10 that allows users to pay in advance for a speci11 fied amount of minutes through an electronic or 

12 other mechanism. 

13 (4) The term ‘‘prepaid calling card distributor’’ 

14 means any entity or person that purchases prepaid 

15 calling cards from a prepaid calling card provider or 

16 another prepaid calling card distributor and sells, re17 sells, issues, or distributes such cards to one or more 

18 distributors of such cards or to one or more retail 

19 sellers of such cards. 

20 (5) The term ‘‘wireless hybrid service’’ is de21 fined as a service that integrates both commercial 

22 mobile radio service (as defined by section 20.3 of 

23 the Federal Communications Commission’s regula24 tions (47 C.F.R. 20.3)) and VoIP service. 


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1 (6) The term ‘‘VoIP service’’ has the meaning 

2 given the term ‘‘interconnected Voice over Internet 

3 protocol service’’ by section 9.3 of the Federal Com4 munications Commission’s regulations (47 C.F.R. 

5 9.3). Such term shall include any voice calling serv6 ice that utilizes a voice over Internet protocol or any 

7 successor protocol in the transmission of the call. 

8 (7) The term ‘‘fees’’ includes all charges, fees, 

9 taxes, or surcharges applicable to a prepaid calling 

10 card that are— 

11 (A) required by Federal law or regulation 

12 or order of the Federal Communications Com13 mission or by the laws and regulations of any 

14 State or political subdivision of a State; or 

15 (B) expressly permitted to be assessed 

16 under Federal law or regulation or order of the 

17 Federal Communications Commission or under 

18 the laws and regulations of any State or polit19 ical subdivision of a State. 

20 (8) The term ‘‘additional charge’’ means any 

21 charge assessed by a prepaid calling card provider or 

22 prepaid calling card distributor for the use of a pre23 paid calling card, other than a fee or rate. 

24 (9) The term ‘‘international preferred destina25 tion’’ means one or more specific international desVerDate Nov 24 2008 05:02 Nov 04, 2009 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3993.IH H3993

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1 tinations named on a prepaid calling card or on the 

2 packaging material accompanying a prepaid calling 

3 card. 

4 SEC. 3. REQUIRED DISCLOSURES OF PREPAID CALLING 

5 CARDS. 

6 (a) REQUIRED DISCLOSURE.—Any prepaid calling 

7 card provider or prepaid calling card distributor shall ac8 curately disclose in a clear and conspicuous manner the 

9 following information relating to the terms and conditions 

10 of the prepaid calling card: 

11 (1) The name of the prepaid calling card pro12 vider and such provider’s customer service telephone 

13 number and hours of service. 

14 (2)(A) The number of domestic interstate min15 utes available from the prepaid calling card and the 

16 number of available minutes for all international 

17 preferred destinations served by the prepaid calling 

18 card at the time of purchase; or 

19 (B) the dollar value of the prepaid calling card, 

20 the domestic interstate rate per minute provided by 

21 such card, and the applicable per minute rates for 

22 all international preferred destinations served by the 

23 prepaid calling card at the time of purchase. 


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1 (3)(A) The applicable per minute rate for all in2 dividual international destinations served by the card 

3 at the time of purchase; or 

4 (B) a toll-free customer service number and 

5 website (if the provider maintains a website) where 

6 a consumer may obtain the information described in 

7 subparagraph (A) and a statement that such infor8 mation may be obtained through such toll-free cus9 tomer service number and website. 

10 (4) The following terms and conditions per11 taining to, or associated with, the use of the prepaid 

12 calling card: 

13 (A) Any applicable fees associated with the 

14 use of the prepaid calling card. 

15 (B) A description of any additional charges 

16 associated with the use of the prepaid calling 

17 card and the amount of such charges. 

18 (C) Any limitation on the use or period of 

19 time for which the promoted or advertised min20 utes or rates will be available. 

21 (D) Applicable policies relating to refund, 

22 recharge, and any predetermined decrease in 

23 value of such card over a period of time. 


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1 (E) Any expiration date applicable to the 

2 prepaid calling card or the minutes available 

3 with such calling card. 

4 (b) LOCATION OF DISCLOSURE AND LANGUAGE RE5 QUIREMENT.— 

6 (1) CLEAR AND CONSPICUOUS.— 

7 (A) CARDS.—The disclosures required 

8 under subsection (a) shall be printed in plain 

9 English language (except as provided in para10 graph (2)) in a clear and conspicuous manner 

11 and location on the prepaid calling card. If the 

12 card is enclosed in packaging that obscures the 

13 disclosures on the card, such disclosures also 

14 shall be printed on the outside packaging of the 

15 card. 

16 (B) ONLINE SERVICES.—In addition to the 

17 requirements under subparagraph (A), in the 

18 case of a prepaid calling card that consumers 

19 purchase via the Internet, the disclosures re20 quired under subsection (a) shall be displayed 

21 in plain English language (except as provided in 

22 paragraph (2)) in a clear and conspicuous man23 ner and location on the Internet website that 

24 the consumer must access prior to purchasing 

25 such card. 


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1 (C) ADVERTISING AND OTHER PRO2 MOTIONAL MATERIAL.—Any advertising for a 

3 prepaid calling card that contains any represen4 tation, expressly or by implication, regarding 

5 the dollar value, the per minute rate, or the 

6 number of minutes provided by the card shall 

7 include in a clear and conspicuous manner and 

8 location all the disclosures described in sub9 section (a). 

10 (2) FOREIGN LANGUAGES.—If a language other 

11 than English is prominently used on a prepaid call12 ing card, its packaging, or in point-of-sale adver13 tising, Internet advertising, or promotional material 

14 for such card, the disclosures required by this sec15 tion shall be disclosed in that language on such card, 

16 packaging, advertisement, or promotional material. 

17 (c) MINUTES ANNOUNCED, PROMOTED, OR ADVER18 TISED THROUGH VOICE PROMPTS.—Any information pro19 vided to a consumer by any voice prompt given to the con20 sumer at the time the consumer uses the prepaid calling 

21 card relating to the remaining value of the calling card 

22 or the number of minutes available from the calling card 

23 shall be accurate, taking into account the application of 

24 the fees and additional charges required to be disclosed 

25 under subsection (a). 


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1 (d) DISCLOSURES REQUIRED UPON PURCHASE OF

2 ADDITIONAL MINUTES.—If a prepaid calling card permits 

3 a consumer to add value to the card or purchase additional 

4 minutes after the original purchase of the prepaid calling 

5 card, any changes to the rates or additional charges re6 quired to be disclosed under subsection (a) shall apply only 

7 to the additional minutes to be purchased and shall be 

8 disclosed to the consumer before the completion of such 

9 purchase. 

10 SEC. 4. ENFORCEMENT BY THE FEDERAL TRADE COMMIS11 SION. 

12 (a) UNFAIR AND DECEPTIVE ACT OR PRACTICE.— 

13 A violation of section 3 shall be treated as a violation of 

14 a rule defining an unfair or deceptive act or practice pre15 scribed under section 18(a)(1)(B) of the Federal Trade 

16 Commission Act (15 U.S.C. 57a(a)(1)(B)). 

17 (b) AUTHORITY OF THE COMMISSION.—The Commis18 sion shall enforce this Act in the same manner and by 

19 the same means as though all applicable terms and provi20 sions of the Federal Trade Commission Act were incor21 porated into and made a part of this Act. Notwithstanding 

22 any provision of the Federal Trade Commission Act or any 

23 other provision of law and solely for purposes of this Act, 

24 common carriers subject to the Communications Act of 


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1 1934 (47 U.S.C. 151 et seq.) and any amendment thereto 

2 shall be subject to the jurisdiction of the Commission. 

3 (c) RULEMAKING AUTHORITY.—Not later than 180 

4 days after the date of enactment of this Act, the Commis5 sion shall, in consultation with the Federal Communica6 tions Commission and in accordance with section 553 of 

7 title 5, United States Code, issue regulations to carry out 

8 this Act. In promulgating such regulations, the Commis9 sion shall— 

10 (1) take into consideration the need for clear 

11 disclosures that provide for easy comprehension and 

12 comparison by consumers, taking into account the 

13 size of prepaid calling cards; and 

14 (2) give due consideration to the views of the 

15 Federal Communications Commission with regard to 

16 matters for which that Commission has particular 

17 expertise and authority and shall take into consider18 ation the views of States. 

19 In promulgating such regulations, the Commission shall 

20 not issue regulations that otherwise affect the rates, 

21 terms, and conditions of prepaid calling cards. 

22 (d) SAVINGS PROVISION.—Nothing in this Act shall 

23 be construed to limit the authority of the Commission 

24 under any other provision of law. Except to the extent ex25 pressly provided in this Act, nothing in this Act shall be 


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1 construed to alter or affect the exemption for common car2 riers provided by section 5(a)(2) of the Federal Trade 

3 Commission Act (15 U.S.C. 45(a)(2)). Nothing in this Act 

4 is intended to limit the authority of the Federal Commu5 nications Commission. 

6 SEC. 5. STATE ENFORCEMENT. 

7 (a) IN GENERAL.— 

8 (1) CIVIL ACTIONS.—In any case in which the 

9 attorney general of a State, a State utility commis10 sion, or other consumer protection agency has rea11 son to believe that an interest of the residents of 

12 that State has been or is threatened or adversely af13 fected by the engagement of any person in a practice 

14 that is prohibited under this Act, the State utility 

15 commission or other consumer protection agency, if 

16 authorized by State law, or the State, as parens 

17 patriae, may bring a civil action on behalf of the 

18 residents of that State in a district court of the 

19 United States of appropriate jurisdiction, or any 

20 other court of competent jurisdiction to— 

21 (A) enjoin that practice; 

22 (B) enforce compliance with this Act; 

23 (C) obtain damage, restitution, or other 

24 compensation on behalf of residents of the 

25 State; or 


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1 (D) obtain such other relief as the court 

2 may consider to be appropriate. 

3 (2) NOTICE TO THE COMMISSION.— 

4 (A) IN GENERAL.—Before filing an action 

5 under paragraph (1), the State shall provide to 

6 the Commission— 

7 (i) written notice of the action; and 

8 (ii) a copy of the complaint for the ac9 tion. 

10 (B) EXEMPTION.— 

11 (i) IN GENERAL.—Subparagraph (A) 

12 shall not apply with respect to the filing of 

13 an action by a State under this subsection, 

14 if the attorney general or other appropriate 

15 officer determines that it is not feasible to 

16 provide the notice described in that sub17 paragraph before the filing of the action. 

18 (ii) NOTIFICATION.—In an action de19 scribed in clause (i), the State shall pro20 vide notice and a copy of the complaint to 

21 the Commission at the same time as the 

22 State files the action. 

23 (b) INTERVENTION BY COMMISSION.— 

24 (1) IN GENERAL.—On receiving notice under 

25 subsection (a)(2), the Commission shall have the 


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1 right to intervene in the action that is the subject 

2 of the notice. 

3 (2) EFFECT OF INTERVENTION.—If the Com4 mission intervenes in an action under subsection (a), 

5 it shall have the right— 

6 (A) to be heard with respect to any matter 

7 that arises in that action; 

8 (B) to remove the action to the appro9 priate United States District Court; and 

10 (C) to file a petition for appeal. 

11 (c) CONSTRUCTION.—For purposes of bringing any 

12 civil action under subsection (a), nothing in this section 

13 shall be construed to prevent an attorney general of a 

14 State, a State utility commission, or other consumer pro15 tection agency authorized by State law from exercising the 

16 powers conferred on the attorney general or other appro17 priate official by the laws of that State to— 

18 (1) conduct investigations; 

19 (2) administer oaths or affirmations; 

20 (3) compel the attendance of witnesses or the 

21 production of documentary and other evidence; or 

22 (4) enforce any State law. 

23 (d) ACTION BY THE COMMISSION MAY PRECLUDE

24 STATE ACTION.—In any case in which an action is insti25 tuted by or on behalf of the Commission for violation of 


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1 this Act, or any regulation issued under this Act, no State 

2 may, during the pendency of that action, institute an ac3 tion under subsection (a) against any defendant named 

4 in the complaint in that action for violation of this Act 

5 or regulation. 

6 (e) VENUE; SERVICE OF PROCESS.— 

7 (1) VENUE.—Any action brought under sub8 section (a) may be brought in the district court of 

9 the United States that meets applicable require10 ments relating to venue under section 1391 of title 

11 28, United States Code. 

12 (2) SERVICE OF PROCESS.—In an action 

13 brought under subsection (a), process may be served 

14 in any district in which the defendant— 

15 (A) is an inhabitant; or 

16 (B) may be found. 

17 (f) LIMITATION.—No prepaid calling card distributor 

18 who is a retail merchant or seller of prepaid calling cards, 

19 who, with respect to such cards, is exclusively engaged in 

20 point-of-sale transactions may be liable for damages in an 

21 action authorized under this section unless such dis22 tributor acted with actual knowledge that the act or prac23 tice giving rise to such action is unfair or deceptive and 

24 is unlawful under this Act. 


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1 SEC. 6. APPLICATION. 

2 This Act shall apply to— 

3 (1) any prepaid calling card issued or placed 

4 into the stream of commerce beginning 90 days after 

5 the date on which final regulations are promulgated 

6 pursuant to section 4(c); and 

7 (2) any advertising, promotion, point-of-sale 

8 material or voice prompt regarding a prepaid calling 

9 card that is disseminated beginning 90 days after 

10 the date on which final regulations are promulgated 

11 pursuant to section 4(c). 

12 If the Commission determines that it is not feasible for 

13 prepaid calling card providers or distributors to comply 

14 with the requirements of this Act with respect to prepaid 

15 calling cards issued or placed into the stream of commerce 

16 after such 90-day period, the Commission may extend 

17 such period by not more than an additional 90 days. 

18 SEC. 7. EFFECT ON STATE LAWS. 

19 Nothing in this Act shall affect the authority of any 

20 State to establish or continue in effect a provision of the 

21 law of a State relating to regulation of prepaid calling 

22 cards, prepaid calling card distributors, prepaid calling 

23 services, or prepaid calling service providers, except to the 

24 extent that such provision of law is inconsistent with the 

25 provisions of this Act or a regulation prescribed under this 

26 Act, and then only to the extent of such inconsistency. 


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1 A provision of the law of a State is not inconsistent with 

2 this Act or a regulation prescribed under this Act if such 

3 provision provides equal or greater protection to con4 sumers than what is provided under this Act or the regula5 tions prescribed under this Act. 

6 SEC. 8. GAO STUDY. 

7 Beginning 2 years after the date on which final regu8 lations are promulgated pursuant to section 4(c), the 

9 Comptroller General shall conduct a study of the effective10 ness of this Act and the disclosures required under this 

11 Act and shall submit a report of such study to Congress 

12 not later than 3 years after the date of enactment of this 

13 Act. 

Æ 


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