In the Senate of the United States,
June 30 1993.
Resolved, That the bill from the House of Representa-
tives (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 telephone, and for other
purposes’’, do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SHORT TITLE
SECTION
1. This Act may be cited as the
‘‘Telemarketing and Consumer Fraud and Abuse Preven-
tion Act’’.
DEFINITIONS
SEC. 2. As used in this Act, the term—
(1) ‘‘attorney general’’ means the chief legal offi-
cer of a State;
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(2) ‘‘Commission’’ means the Federal Trade
Commission;
(3) ‘‘State’’ means any State of the United
States, the District of Columbia, Puerto Rico, the
Northern Mariana Islands, and any territory or pos-
session of the United States;
(4) ‘‘telemarketing’’ means a plan, program, or
campaign which is conducted to induce purchases of
goods or services by significant use of one or more
telephones and which has involved interstate telephone
calls; the term does not include other use of a tele-
phone in connection with business or personal trans-
actions, nor does the term include the solicitation 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;
(D) is issued not less frequently than once
a year; and
(E) is at least the third catalog satisfying
the requirements of subparagraphs (A) through
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(D) that has been issued by the seller within the
last 5 years,
where the seller does not place calls to customers but
only receives calls initiated by customers in response
to the catalog and during those calls takes orders only
without further solicitation; and
(5) ‘‘credit card laundering’’ means—
(A) the act or practice by a person engaged
in telemarketing (other than an act or practice
permitted in a valid agreement with a member
of a credit card system or the member’s agent)
of transferring to another person to be presented
to a member of a credit card system or the mem-
ber’s agent, for payment, one or more evidences
or records of transactions involving goods or
services offered by telemarketing and paid for by
credit card;
(B) the act or practice by a person acting
on behalf of a person engaged in telemarketing
(other than an act or practice permitted in a
valid agreement with a member of a credit card
system or the member’s agent) of causing or ar-
ranging for a third person to present to a mem-
ber of a credit card system or the member’s
agent, for payment, one or more evidences or
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records of transactions involving goods or serv-
ices offered by telemarketing and paid for by
credit card;
(C) the act or practice by a person (other
than an act or practice permitted in a valid
agreement with a member of a credit card system
or the member’s agent) of knowingly presenting
to a member of a credit card system or the mem-
ber’s agent, for payment, one or more evidences
or records received from another person of trans-
actions involving goods or services offered by
telemarketing and paid for by credit card; or
(D) such other acts or practices defined in
the rules of the Commission as credit card laun-
dering.
TELEMARKETING RULES
SEC. 3. (a) RULES ON TELEMARKETING ACTIVITIES.—
The 
Commission 
shall 
prescribe 
rules 
regarding
telemarketing activities. In prescribing such rules, the Com-
mission shall consider the inclusion of—
(1) a requirement that goods or services offered
by telemarketing be shipped or provided within a
specified period and that if the goods or services are
not shipped or provided within such period a refund
be required;
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(2) where practicable, authority for a person who
orders a good or service through telemarketing to can-
cel the order within a specified period;
(3) restrictions on the hours of the day when un-
solicited telephone calls can be made to consumers;
(4) a prohibition of telemarketing generated by
computers on equipment that does not permit the in-
dividual called to terminate the telephone call; and
(5) recordkeeping requirements.
(b) PROHIBITION OF FRAUDULENT TELEMARKETING
ACTS OR PRACTICES.—The Commission also shall prescribe
rules prohibiting fraudulent telemarketing acts or practices
and shall include in such rules a definition of the term
‘‘fraudulent telemarketing acts or practices’’, which may in-
clude activities of entities or individuals that assist or fa-
cilitate fraudulent telemarketing. Credit card laundering
shall be a fraudulent telemarketing act or practice. Such
rules shall also require that, in each telemarketing call, any
person engaged in telemarketing shall promptly and clearly
disclose to the prospective purchaser that the purpose of the
call is to sell goods or services and shall make such other
disclosures as the Commission deems appropriate, including
the nature and price of the goods and services.
(c) DEADLINE; ADMINISTRATIVE PROCEDURE.—The
Commission shall prescribe the rules under subsections (a)
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and (b) of this section within 180 days after the date of
enactment of this Act. Such rules shall be prescribed in ac-
cordance with section 553 of title 5, United States Code.
(d) TREATMENT OF RULE VIOLATIONS.—Any viola-
tion of any rule prescribed under subsection (a) or (b) of
this section shall be treated as a violation of a trade regula-
tion rule promulgated under section 18 of the Federal Trade
Commission Act (15 U.S.C. 57a) regarding unfair or decep-
tive acts or practices (subject to any remedy or penalty ap-
plicable to any violation thereof).
(e) EFFECT ON STATE LAW.—The rules promulgated
under this section shall not be construed as preempting
State law.
ACTIONS BY STATE ATTORNEYS GENERAL
SEC. 4. (a) AUTHORITY OF STATES.—Whenever the at-
torney general of any State has reason to believe that the
interests of the residents of that State have been or are being
threatened or adversely affected because any person has en-
gaged or is engaging in a pattern or practice of
telemarketing which violates any rule, regulation, or order
of the Commission under this Act, the State may bring a
civil action on behalf of its residents to enjoin such
telemarketing, to enforce compliance with any rule, regula-
tion, or order of the Commission under this Act, to obtain
damages on behalf of their residents, or to obtain such fur-
ther and other relief as the court may deem appropriate.
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(b) COURT JURISDICTION.—The district courts of the
United States, the United States courts of any territory,
and the District Court of the United States for the District
of Columbia shall have exclusive jurisdiction over all civil
actions brought under this section to enforce any liability
or duty created by any rule, regulation, or order of the Com-
mission under this Act, or to obtain damages or other relief
with respect thereto. Upon proper application, such courts
shall also have jurisdiction to issue writs of mandamus, or
orders affording like relief, commanding the defendant to
comply with the provisions of any rule, regulation, or order
of the Commission under this Act, including the require-
ment that the defendant take such action as is necessary
to remove the danger of violation of any such rule, regula-
tion, or order. Upon a proper showing, a permanent or tem-
porary injunction or restraining order shall be granted
without bond.
(c) RIGHTS OF COMMISSION.—The State shall serve
prior written notice of any such civil action upon the Com-
mission 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 State shall serve such notice
immediately upon instituting such action. The Commission
shall have the right (1) to intervene in the action, (2) upon
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so intervening, to be heard on all matters arising therein,
and (3) to file petitions for appeal.
(d) VENUE; SERVICE OF PROCESS.—Any civil action
brought under this section in a district court of the United
States may be brought in the district wherein the defendant
is found or is an inhabitant or transacts business or wher-
ever venue is proper under section 1391 of title 28, United
States Code, and process in such cases may be served in
any district in which the defendant is an inhabitant or
wherever the defendant may be found.
(e) EFFECT ON STATE POWERS OF ATTORNEYS GEN-
ERAL.—For purposes of bringing any civil action under
this section, nothing in this Act shall prevent the attorney
general from exercising the powers conferred on the attorney
general by the laws of such State to conduct investigations
or to administer oaths or affirmations or to compel the at-
tendance of witnesses or the production of documentary and
other evidence.
(f) EFFECT ON ACTIONS UNDER STATE STATUTE.—
Nothing contained in this section shall prohibit an author-
ized State official from proceeding in State court on the
basis of an alleged violation of any general civil or criminal
statute of such State.
(g) CIVIL ACTION
BY COMMISSION.—Whenever the
Commission has instituted a civil action for violation of
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any rule prescribed under this Act, no State may, during
the pendency of such action instituted by the Commission,
subsequently institute a civil action against any defendant
named in the Commission’s complaint for violation of any
rule as alleged in the Commission’s complaint.
ACTIONS BROUGHT BY PRIVATE PERSONS
SEC. 5. (a) DEFINITION.—As used in this section, the
term ‘‘person adversely affected by telemarketing’’ means—
(1) any person who has incurred loss or damage
in connection with telemarketing and who actually
purchased goods or services through telemarketing, or
paid or is obligated to pay for goods or services pur-
chased through telemarketing;
(2) any financial institution that has incurred
loss or damage in connection with telemarketing; or
(3) any member organization comprised of fi-
nancial institution members, or any parent organiza-
tion of such member organization, if one or more of
the financial institution members is eligible to bring
a civil action under this subsection.
Such term does not include a governmental entity.
(b) PRIVATE RIGHT OF ACTION.—(1) Any person ad-
versely affected by any pattern or practice of telemarketing
which violates any rule, regulation, or order of the Commis-
sion under this Act may, within 3 years after discovery of
the violation, bring a civil action against a person who has
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engaged or is engaging in such pattern or practice of
telemarketing if the amount in controversy exceeds the sum
or value of $50,000 in actual damages for each person ad-
versely affected by such telemarketing. Such an action may
be brought to enjoin such telemarketing, to enforce compli-
ance with any rule, regulation, or order of the Commission
under this Act, to obtain damages, or to obtain such further
and other relief as the court may deem appropriate.
(2) The district courts of the United States, the United
States courts of any territory, and the District Court of the
United States for the District of Columbia shall have exclu-
sive jurisdiction over all civil actions brought under this
section to enforce any liability or duty created by any rule,
regulation, or order of the Commission under this Act, or
to obtain damages or other relief with respect thereto. Upon
proper application, such courts shall also have jurisdiction
to issue writs of mandamus, or orders affording like relief,
commanding the defendant to comply with the provisions
of any rule, regulation, or order of the Commission under
this Act, including the requirement that the defendant take
such action as is necessary to remove the danger of violation
or of any such rule, regulation, or order. Upon a proper
showing, a permanent or temporary injunction or restrain-
ing order shall be granted without bond.
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(3) 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 instituting such action.
The Commission shall have the right (A) to intervene in
the action, (B) upon so intervening, to be heard on all mat-
ters arising therein, and (C) to file petitions for appeal.
(4) Whenever the Commission has instituted a civil ac-
tion for violation of any rule prescribed under this Act, no
person may, during the pendency of such action instituted
by the Commission, subsequently institute a civil action
against any defendant named in the Commission’s com-
plaint for violation of any rule as alleged in the Commis-
sion’s complaint.
(5) Any civil action brought under this section in a
district court of the United States may be brought in the
district wherein the defendant is found or is an inhabitant
or transacts business or wherever venue is proper under sec-
tion 1391 of title 28, United States Code, and process in
such cases may be served in any district in which the de-
fendant is an inhabitant or wherever the defendant may
be found.
(c) AWARD OF COSTS AND FEES.—The court, in issu-
ing any final order in any action brought under subsection
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(b), may award costs of suit and reasonable fees for attor-
neys and expert witnesses to the prevailing party.
(d) RIGHTS UNDER STATUTE OR COMMON LAW.—
Nothing in this section shall restrict any right which any
person may have under any statute or common law.
VENUE
SEC. 6. Any suit brought against a person, partner-
ship, or corporation under section 13(b) of the Federal
Trade Commission Act (15 U.S.C. 53(b)) may be brought
where the defendant resides or transacts business, or wher-
ever venue is proper under section 1391 of title 28, United
States Code. In such a suit, if the court determines that
the interests of justice require that any other person, part-
nership, or corporation should be a party in such suit, the
court may cause such person, partnership, or corporation
to be summoned without regard to whether they reside or
transact business in the district in which the suit is
brought. In any suit under this section, process may be
served on any person, partnership, or corporation, wherever
they may be found.
SUBPOENA
SEC. 7. (a) PHYSICAL EVIDENCE DEFINED.—Section
20(a) of the Federal Trade Commission Act (15 U.S.C. 57b–
1(a)) is amended—
(1) by redesignating paragraph (7) as para-
graph (8); and
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(2) by inserting immediately after paragraph (6)
the following new paragraph:
‘‘(7) The term ‘physical evidence’ means any ob-
ject or device.’’.
(b) ISSUANCE OF DEMAND.—Section 20(c)(1) of the
Federal Trade Commission Act (15 U.S.C. 57b–1(c)(1)) is
amended—
(1) by inserting ‘‘physical evidence or’’ imme-
diately after ‘‘any’’ the second time it appears;
(2) by inserting ‘‘to produce such physical evi-
dence 
for 
inspection,’’ 
immediately 
before 
‘‘to
produce’’;
(3) by inserting ‘‘physical evidence,’’ imme-
diately after ‘‘concerning’’; and
(4) by inserting ‘‘evidence,’’ immediately before
‘‘material, answers,’’.
(c) CONTENTS OF DEMAND.—Section 20(c)(3)) of the
Federal Trade Commission Act (15 U.S.C. 57b–1(c)(3)) is
amended—
(1) by inserting ‘‘physical evidence or’’ imme-
diately before ‘‘documentary material’’ the first time
it appears;
(2) in subparagraph (A)—
(A) by inserting ‘‘physical evidence or’’ im-
mediately before ‘‘documentary’’; and
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(B) by inserting ‘‘evidence or’’ immediately
after ‘‘permit such’’;
(3) in subparagraph (B), by inserting ‘‘evidence
or ’’ immediately before ‘‘material’’; and
(4) in subparagraph (C), by inserting ‘‘evidence
or’’ immediately before ‘‘material’’.
(d) PRODUCTION OF EVIDENCE IN RESPONSE TO DE-
MAND.—Section 20(c)(10) of the Federal Trade Commission
Act (15 U.S.C. 57b–1(c)(10)) is amended by inserting
‘‘physical evidence or’’ immediately before ‘‘documentary
material’’ each place it appears.
FALSE ADVERTISEMENTS CONCERNING SERVICES
SEC. 8. Section 12(a) of the Federal Trade Commis-
sion Act (15 U.S.C. 52(a)) is amended by inserting ‘‘serv-
ices,’’ immediately after ‘‘devices,’’ each place it appears.
CLEARINGHOUSE
SEC. 9. The Commission shall establish a clearinghouse
for inquiries made to Federal agencies concerning
telemarketing. The clearinghouse will provide information
(other than information which may not be disclosed under
section 552(b) of title 5, United States Code, or under regu-
lations prescribed by the Commission to implement section
552(b) of title 5, United States Code) to anyone making
inquiries respecting persons engaged in telemarketing or di-
rect such inquiries to the appropriate Federal or State
agency.
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FINANCIAL DATA
SEC. 10. Section 1109(a)(3) of the Right to Financial
Privacy Act of 1978 (12 U.S.C. 3409(a)(3)) is amended—
(1) by redesignating subparagraph (E) as sub-
paragraph (F);
(2) by striking ‘‘or’’ at the end of subparagraph
(D); and
(3) by inserting immediately after subparagraph
(D) the following new subparagraph:
‘‘(E) dissipation, removal, or destruction of
assets that are subject to forfeiture, seizure, re-
dress, or restitution under any law of the United
States by reason of having been obtained in vio-
lation of law; or’’.
CRIMINAL CONTEMPT AUTHORITY
SEC. 11. Section 16(a)(1) of the Federal Trade Com-
mission Act (15 U.S.C. 56(a)(1)) is amended—
(1) in subparagraph (A) by striking ‘‘civil’’ the
first place it appears and inserting in lieu thereof
‘‘Federal court’’; and
(2) by adding at the end the following: ‘‘The
Commission may bring a criminal contempt action
for violations of orders obtained in cases brought
under section 13(b) of this Act in the same manner
as civil penalty and other Federal court actions to
which this subsection applies. Such cases may be ini-
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tiated by the Commission on its own complaint, or
pursuant to its acceptance of an appointment by a
court to assist it in enforcing such orders pursuant to
Rule 42(b) of the Federal Rules of Criminal Proce-
dure.’’.
ADMINISTRATION AND APPLICABILITY OF ACT
SEC. 12. (a) ENFORCEMENT.—Except as otherwise
provided in sections 4 and 5 of this Act, this Act shall be
enforced by the Commission under the Federal Trade Com-
mission Act (15 U.S.C. 41 et seq.).
(b) APPLICABILITY OF FTCA.—The Commission shall
prevent any person from violating a rule, regulation, or
order of the Commission under this Act in the same man-
ner, by the same means, and with the same jurisdiction,
powers, and duties as though all applicable terms and pro-
visions of the Federal Trade Commission Act (15 U.S.C.
41 et seq.) were incorporated into and made a part of this
Act. Any person who violates such a rule, regulation, or
order shall be subject to the penalties and entitled to the
privileges and immunities provided in the Federal Trade
Commission Act 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 were incorporated into and made
a part of this Act.
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(c) EXEMPTION.—(1) No provision of this Act shall
apply to any person exempt from the jurisdiction of the
Commission under section 5(a)(2) of the Federal Trade
Commission Act (15 U.S.C. 45(a)(2)), and nothing in this
Act shall be construed to vest the Commission, or the attor-
ney general of any State or any person, with jurisdiction
or authority over any person not otherwise subject to the
jurisdiction or authority of the Commission.
(2)(A) No provision of this Act shall apply—
(i) to a broker, dealer, municipal securities deal-
er, government securities broker, government securities
dealer, or investment company in connection with the
offer, sale, or purchase of any security, or to an issuer
in connection with the offer, sale, or purchase of any
security which that issuer has issued, or to any in-
vestment adviser providing investment advice relating
to any security; or
(ii) to the solicitation, acceptance, confirmation,
or execution of orders for the entry into, purchase of,
or sale of any contract, account, agreement, or trans-
action subject to the exclusive jurisdiction of the Com-
modity Futures Trading Commission under the Com-
modity Exchange Act (7 U.S.C. 1 et seq.) by a person
registered under the Commodity Exchange Act in
order to engage in such activity, including as a fu-
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tures commission merchant, introducing broker, com-
modity trading advisor, commodity pool operator, le-
verage transaction merchant, floor broker, or floor
trader, or as a person associated with any such
person.
(B) For purposes of subparagraph (A)(i)—
(1) the terms ‘‘broker’’, ‘‘dealer’’, ‘‘municipal se-
curities dealer’’, ‘‘government securities broker’’, and
‘‘government securities dealer’’ have the meanings
given them in section 3(a) (4), (5), (30), (43), and
(44), respectively, of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a) (4), (5), (30), (43), and (44));
(2) the term ‘‘investment adviser’’ has the mean-
ing given it in section 202(a)(11) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b–2(a)(11));
(3) the term ‘‘investment company’’ has the
meaning given it in section 3(a) of the Investment
Company Act of 1940 (15 U.S.C. 80a–3(a));
(4) the term ‘‘issuer’’ has the meaning given it
in section 2(4) of the Securities Act of 1933 (15
U.S.C. 77b(4)); and
(5) the term ‘‘security’’ has the meaning given to
it in section 2(1) of the Securities Act of 1933 (15
U.S.C. 77b(1)), section 3(a)(10) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78c(a)(10)), and sec-
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tion 2(a)(36) of the Investment Company Act of 1940
(15 U.S.C. 80a–2(a)(36)).
LIFE CARE HOME STUDY
SEC. 13. (a) STUDY.—The Federal Trade Commission
shall conduct a study of unfair or deceptive acts or practices
in the life care home industry, including acts or practices
engaged in by life care homes. Within 24 months after the
date of enactment of this Act, the Commission shall report
the findings and conclusions of the study to Congress. The
Commission shall indicate in its report whether it intends
to initiate a trade regulation rulemaking under section 18
of the Federal Trade Commission Act (15 U.S.C. 57a) re-
specting unfair or deceptive acts or practices in the life care
home industry and the reasons for such determination.
(b) DEFINITIONS.—For purposes of subsection (a), the
term—
(1) ‘‘life care home’’ includes the facility or fa-
cilities occupied, or planned to be occupied, by resi-
dents or prospective residents where a provider under-
takes to provide living accommodations and services
pursuant to a life care contract, regardless of whether
such facilities are operated on a profit or nonprofit
basis; and
(2) ‘‘life care contract’’ includes a contract be-
tween a resident and a provider to provide the resi-
dent, for the duration of such resident’s life, living ac-
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commodations and related services in a life care
home, including nursing care services, medical serv-
ices, and other health-related services, which is condi-
tioned upon the transfer of an entrance fee to the pro-
vider and which may be further conditioned upon the
payment of periodic service fees.
SUNSET
SEC. 14. The provisions of sections 3, 4, and 5 shall
cease to have force and effect on and after the date that
is five years following the date of enactment of this Act.
Attest:
Secretary.
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