In the House of Representatives, U. S.,
July 25, 1994.
Resolved, That the House agree to the amendment of
the Senate to the bill (H.R. 868) entitled ‘‘An Act to
strengthen the authority of the Federal Trade Commission to
protect consumers in connection with sales made with a tele-
phone, and for other purposes’’, with the following
AMENDMENT:
In lieu of the matter inserted by said amendment, in-
sert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Telemarketing and
Consumer Fraud and Abuse Prevention Act’’.
SEC. 2. FINDINGS.
The Congress makes the following findings:
(1) Telemarketing differs from other sales activi-
ties in that it can be carried out by sellers across
State lines without direct contact with the consumer.
Telemarketers also can be very mobile, easily moving
from State to State.
(2) Interstate telemarketing fraud has become a
problem of such magnitude that the resources of the
Federal Trade Commission are not sufficient to en-
sure adequate consumer protection from such fraud.
(3) Consumers and others are estimated to lose
$40 billion a year in telemarketing fraud.
(4) Consumers are victimized by other forms of
telemarketing deception and abuse.
(5) Consequently, Congress should enact legisla-
tion that will offer consumers necessary protection
from telemarketing deception and abuse.
SEC. 3. TELEMARKETING RULES.
(a) IN GENERAL.—
(1) The Commission shall prescribe rules prohib-
iting deceptive telemarketing acts or practices and
other abusive telemarketing acts or practices.
(2) The Commission shall include in such rules
respecting deceptive telemarketing acts or practices a
definition of deceptive telemarketing acts or practices
which may include acts or practices of entities or in-
dividuals 
that 
assist 
or 
facilitate 
deceptive
telemarketing, including credit card laundering.
(3) The Commission shall include in such rules
respecting other abusive telemarketing acts or prac-
tices—
(A) a requirement that telemarketers may
not undertake a pattern of unsolicited telephone
calls which the reasonable consumer would con-
sider coercive or abusive of such consumer’s right
to privacy,
(B) restrictions on the hours of the day and
night when unsolicited telephone calls can be
made to consumers, and
(C) a requirement that any person engaged
in telemarketing for the sale of goods or services
shall promptly and clearly disclose to the person
receiving the call that the purpose of the call is
to sell goods or services and make such other dis-
closures as the Commission deems appropriate,
including the nature and price of the goods and
services.
In prescribing the rules described in this paragraph,
the Commission shall also consider recordkeeping re-
quirements.
(b) RULEMAKING.—The Commission shall prescribe
the rules under subsection (a) within 365 days after the
date of enactment of this Act. Such rules shall be prescribed
in accordance with section 553 of title 5, United States
Code.
(c) ENFORCEMENT.—Any violation of any rule pre-
scribed under subsection (a) shall be treated as a violation
of a rule under section 18 of the Federal Trade Commission
Act (15 U.S.C. 57a) regarding unfair or deceptive acts or
practices.
(d) 
SECURITIES
AND
EXCHANGE
COMMISSION
RULES.—
(1) PROMULGATION.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), not later than 6 months after
the effective date of rules promulgated by the
Federal Trade Commission under subsection (a),
the Securities and Exchange Commission shall
promulgate, or require any national securities
exchange or registered securities association to
promulgate, rules substantially similar to such
rules to prohibit deceptive and other abusive
telemarketing acts or practices by persons de-
scribed in paragraph (2).
(B) EXCEPTION.—The Securities and Ex-
change Commission is not required to promul-
gate a rule under subparagraph (A) if it deter-
mines that—
(i) Federal securities laws or rules
adopted by the Securities and Exchange
Commission thereunder provide protection
from 
deceptive 
and 
other 
abusive
telemarketing by persons described in para-
graph (2) substantially similar to that pro-
vided by rules promulgated by the Federal
Trade Commission under subsection (a); or
(ii) such a rule promulgated by the Se-
curities and Exchange Commission is not
necessary or appropriate in the public in-
terest, or for the protection of investors, or
would be inconsistent with the maintenance
of fair and orderly markets.
If the Securities and Exchange Commission de-
termines that an exception described in clause (i)
or (ii) applies, the Securities and Exchange
Commission shall publish in the Federal Register
its determination with the reasons for it.
(2) APPLICATION.—
(A) IN GENERAL.—The rules promulgated
by the Securities and Exchange Commission
under paragraph (1)(A) shall apply to a broker,
dealer, transfer agent, municipal securities deal-
er, municipal securities broker, government secu-
rities broker, government securities dealer, in-
vestment adviser or investment company, or any
individual associated with a broker, dealer,
transfer agent, municipal securities dealer, mu-
nicipal securities broker, government securities
broker, government securities dealer, investment
adviser or investment company. The rules pro-
mulgated by the Federal Trade Commission
under subsection (a) shall not apply to persons
described in the preceding sentence.
(B) DEFINITIONS.—For purposes of sub-
paragraph (A)—
(i) 
the 
terms 
‘‘broker’’, 
‘‘dealer’’,
‘‘transfer 
agent’’, 
‘‘municipal 
securities
dealer’’, 
‘‘municipal 
securities 
broker’’,
‘‘government securities broker’’, and ‘‘gov-
ernment securities dealer’’ have the mean-
ings given such terms by paragraphs (4),
(5), (25), (30), (31), (43), and (44) of sec-
tion 3(a) of the Securities and Exchange
Act of 1934 (15 U.S.C. 78c(a)(4), (5), (25),
(30), (31), (43), and (44));
(ii) the term ‘‘investment adviser’’ has
the meaning given such term by section
202(a)(11) of the Investment Advisers Act of
1940 (15 U.S.C. 80b–2(a)(11)); and
(iii) the term ‘‘investment company’’
has the meaning given such term by section
3(a) of the Investment Company Act of
1940 (15 U.S.C. 80a–3(a)).
(e) COMMODITY
FUTURES
TRADING
COMMISSION
RULES.—
(1) APPLICATION.—The rules promulgated by the
Federal Trade Commission under subsection (a) shall
not apply to persons described in subsection (f)(1) of
section 6 of the Commodity Exchange Act (7 U.S.C.
8, 9, 15, 13b, 9a).
(2) PROMULGATION.—Section 6 of the Commod-
ity Exchange Act (7 U.S.C. 8, 9, 15, 13b, 9a) is
amended by adding at the end the following new sub-
section:
‘‘(f)(1) Except as provided in paragraph (2), not later
than six months after the effective date of rules promulgated
by the Federal Trade Commission under section 3(a) of the
Telemarketing and Consumer Fraud and Abuse Prevention
Act, the Commission shall promulgate, or require each reg-
istered futures association to promulgate, rules substan-
tially similar to such rules to prohibit deceptive and other
abusive telemarketing acts or practices by any person reg-
istered or exempt from registration under this Act in con-
nection with such person’s business as a futures commission
merchant, introducing broker, commodity trading advisor,
commodity pool operator, leverage transaction merchant,
floor broker, or floor trader, or a person associated with any
such person.
‘‘(2) The Commission is not required to promulgate
rules under paragraph (1) if it determines that—
‘‘(A) rules adopted by the Commission under this
Act provide protection from deceptive and abusive
telemarketing by persons described under paragraph
(1) substantially similar to that provided by rules
promulgated by the Federal Trade Commission under
section 3(a) of the Telemarketing and Consumer
Fraud and Abuse Prevention Act; or
‘‘(B) such a rule promulgated by the Commission
is not necessary or appropriate in the public interest,
or for the protection of customers in the futures and
options markets, or would be inconsistent with the
maintenance of fair and orderly markets.
If the Commission determines that an exception described
in subparagraph (A) or (B) applies, the Commission shall
publish in the Federal Register its determination with the
reasons for it.’’.
SEC. 4. ACTIONS BY STATES.
(a) IN GENERAL.—Whenever an attorney general of
any State has reason to believe that the interests of the resi-
dents of that State have been or are being threatened or
adversely affected because any person has engaged or is en-
gaging in a pattern or practice of telemarketing which vio-
lates any rule of the Commission under section 3, the State,
as parens patriae, may bring a civil action on behalf of
its residents in an appropriate district court of the United
States to enjoin such telemarketing, to enforce compliance
with such rule of the Commission, to obtain damages, res-
titution, or other compensation on behalf of residents of such
State, or to obtain such further and other relief as the court
may deem appropriate.
(b) NOTICE.—The State shall serve prior written no-
tice of any civil action under subsection (a) or (f)(2) upon
the Commission and provide the Commission with a copy
of its complaint, except that if it is not feasible for the State
to provide such prior notice, the State shall serve such notice
immediately upon instituting such action. Upon receiving
a notice respecting a civil action, the Commission shall have
the right (1) to intervene in such action, (2) upon so inter-
vening, to be heard on all matters arising therein, and (3)
to file petitions for appeal.
(c) CONSTRUCTION.—For purposes of bringing any
civil action under subsection (a), nothing in this Act shall
prevent an attorney general from exercising the powers con-
ferred on the attorney general by the laws of such State
to conduct investigations or to administer oaths or affirma-
tions or to compel the attendance of witnesses or the produc-
tion of documentary and other evidence.
are authorized by the State to bring actions in such
State on behalf of its residents.
SEC. 5. ACTIONS BY PRIVATE PERSONS.
(a) IN GENERAL.—Any person adversely affected by
any pattern or practice of telemarketing which violates any
rule of the Commission under section 3, or an authorized
person acting on such person’s behalf, may, within 3 years
after discovery of the violation, bring a civil action in an
appropriate district court of the United States against a
person who has engaged or is engaging in such pattern or
practice of telemarketing if the amount in controversy ex-
ceeds the sum or value of $50,000 in actual damages for
each person adversely affected by such telemarketing. Such
an action may be brought to enjoin such telemarketing, to
enforce compliance with any rule of the Commission under
section 3, to obtain damages, or to obtain such further and
other relief as the court may deem appropriate.
(b) NOTICE.—The plaintiff shall serve prior written
notice of the action upon the Commission and provide the
Commission with a copy of its complaint, except in any
case where such prior notice is not feasible, in which case
the person shall serve such notice immediately upon insti-
tuting such action. The Commission shall have the right
(A) to intervene in the action, (B) upon so intervening, to
be heard on all matters arising therein, and (C) to file peti-
tions for appeal.
(c) ACTION BY THE COMMISSION.—Whenever a civil
action has been instituted by or on behalf of the Commission
for violation of any rule prescribed under section 3, no per-
son may, during the pendency of such action instituted by
or on behalf of the Commission, institute a civil action
against any defendant named in the complaint in such ac-
tion for violation of any rule as alleged in such complaint.
(d) COST AND FEES.—The court, in issuing any final
order in any action brought under subsection (a), may
award costs of suit and reasonable fees for attorneys and
expert witnesses to the prevailing party.
(e) CONSTRUCTION.—Nothing in this section shall re-
strict any right which any person may have under any stat-
ute or common law.
(f) VENUE; SERVICE OF PROCESS.—Any civil action
brought under subsection (a) in a district court of the
United States may be brought in the district in which the
defendant is found, is an inhabitant, or transacts business
or wherever venue is proper under section 1391 of title 28,
United States Code. Process in such an action may be
served in any district in which the defendant is an inhab-
itant or in which the defendant may be found.
SEC. 6. ADMINISTRATION AND APPLICABILITY OF ACT.
(a) IN GENERAL.—Except as otherwise provided in
sections 3(d), 3(e), 4, and 5, this Act shall be enforced by
the Commission under the Federal Trade Commission Act
(15 U.S.C. 41 et seq.). Consequently, no activity which is
outside the jurisdiction of that Act shall be affected by this
Act.
(b) ACTIONS BY THE COMMISSION.—The Commission
shall prevent any person from violating a rule of the Com-
mission under section 3 in the same manner, by the same
means, and with the same jurisdiction, powers, and duties
as though all applicable terms and provisions of the Federal
Trade Commission Act (15 U.S.C. 41 et seq.) were incor-
porated into and made a part of this Act. Any person who
violates such rule shall be subject to the penalties and enti-
tled to the privileges and immunities provided in the Fed-
eral Trade Commission Act in the same manner, by the
same means, and with the same jurisdiction, power, and
duties as though all applicable terms and provisions of the
Federal Trade Commission Act were incorporated into and
made a part of this Act.
(c) EFFECT ON OTHER LAWS.—Nothing contained in
this Act shall be construed to limit the authority of the Com-
mission under any other provision of law.
SEC. 7. DEFINITIONS.
For purposes of this Act:
(1) The term ‘‘attorney general’’ means the chief
legal officer of a State.
(2) The term ‘‘Commission’’ means the Federal
Trade Commission.
(3) The term ‘‘State’’ means any State of the
United States, the District of Columbia, Puerto Rico,
the Northern Mariana Islands, and any territory or
possession of the United States.
(4) The term ‘‘telemarketing’’ means a plan, pro-
gram, or campaign which is conducted to induce pur-
chases of goods or services by use of one or more tele-
phones and which involves more than one interstate
telephone call. The term does not include the solicita-
tion of sales through the mailing of a catalog which—
(A) contains a written description, or illus-
tration of the goods or services offered for sale,
(B) includes the business address of the sell-
er,
(C) includes multiple pages of written mate-
rial or illustrations, and
(D) has been issued not less frequently than
once a year,
where the person making the solicitation does not so-
licit customers by telephone but only receives calls
initiated by customers in response to the catalog and
during those calls takes orders only without further
solicitation.
SEC. 8. FALSE ADVERTISEMENTS CONCERNING SERVICES.
Section 12(a) of the Federal Trade Commission Act
(15 U.S.C. 52(a)) is amended by inserting ‘‘services,’’ im-
mediately after ‘‘devices,’’ each place it appears.
SEC. 9. ENFORCEMENT OF ORDERS.
(a) GENERAL AUTHORITY.—Subject to subsections (b)
and (c), the Federal Trade Commission may bring a crimi-
nal contempt action for violations of orders of the Commis-
sion obtained in cases brought under section 13(b) of the
Federal Trade Commission Act (15 U.S.C. 53(b)).
(b) APPOINTMENT.—An action authorized by sub-
section (a) may be brought by the Federal Trade Commis-
sion only after, and pursuant to, the appointment by the
Attorney General of an attorney employed by the Commis-
sion, as a special assistant United States Attorney.
(c) REQUEST FOR APPOINTMENT.—
(1) APPOINTMENT UPON REQUEST OR MOTION.—
A special assistant United States Attorney may be
appointed under subsection (b) upon the request of the
Federal Trade Commission or the court which has en-
tered the order for which contempt is sought or upon
the Attorney General’s own motion.
(2) TIMING.—The Attorney General shall act
upon any request made under paragraph (1) within
45 days of the receipt of the request.
(d) TERMINATION OF AUTHORITY.—The authority of
the Federal Trade Commission to bring a criminal con-
tempt action under subsection (a) expires 2 years after the
date of the first promulgation of rules under section 3. The
expiration of such authority shall have no effect on an ac-
tion brought before the expiration date.
SEC. 10. REVIEW.
Upon the expiration of 5 years following the date of
the first promulgation of rules under section 3, the Commis-
sion shall review the implementation of this Act and its
effect on deceptive telemarketing acts or practices and re-
port the results of the review to the Congress.
Attest:
Clerk.
103D CONGRESS
2D SESSION
H. R. 868
AMENDMENT
TO
SENATE AMENDMENT