1. Short title
This Act may be cited as the “Fair Telephone Billing Act of 2013”.
Fair Telephone Billing Act of 2013
A BILL
To prohibit unauthorized third-party charges on wireline telephone bills, and for other purposes.
2. Findings
Congress makes the following findings:
For years, telephone users have complained that their wireline telephone bills included unauthorized third-party charges.
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.
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.
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.
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.
Telephone companies regularly placed third-party charges on their customers’ telephone bills without their customers’ authorization.
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.
In the last decade, millions of business and residential consumers have transitioned from wireline telephone service to interconnected VoIP service.
Users of interconnected VoIP service often use the service as the primary telephone line for their residences and businesses.
Millions more business and residential consumers are expected to migrate to interconnected VoIP service in the coming years as the evolution of the nation’s traditional voice communications networks to IP-based networks continues.
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.
3. Unauthorized third-party charges
In general— Section 258 of the Communications Act of 1934 (47 U.S.C. 258) is amended—
by amending the heading to read as follows: “Sec. 258. Preventing illegal changes in subscriber carrier selections and unauthorized third-party charges.”; and
by adding at the end the following:
“(c) Prohibition
“(1) In general—No local exchange carrier or provider of interconnected VoIP service shall place or cause to be placed 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 contracted 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 was provided with clear and conspicuous disclosure of all material terms and conditions prior to consenting under subparagraph (D);
“(D) the customer provided affirmative consent for the placement of the third-party charge on the bill; and
“(E) the local exchange carrier or provider of interconnected VoIP service has implemented reasonable procedures to ensure that the third-party charge is for a product or service requested by the customer.
“(2) Forfeiture and refund
“(A) In general—Any person who commits a violation of paragraph (1) shall be subject to a civil forfeiture, which shall be determined in accordance with section 503 of title V of this Act, except that the amount of the penalty shall be double the otherwise applicable amount of the penalty under that section.
“(B) Refund—Any local exchange carrier or provider of interconnected VoIP service that commits a violation of paragraph (1) shall be liable to the customer in an amount equal to all charges paid by that customer related to the violation of paragraph (1), in accordance with such procedures as the Commission may prescribe.
“(3) Additional remedies—The remedies under this subsection are in addition to any other remedies provided by law.
“(4) Definitions—In this subsection:
“(A) Affirmative consent—The term affirmative consent means express verifiable authorization.
“(B) Contracted third-party vendor—The term contracted 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 for a product or service that the person provides directly to a customer.
“(C) 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.”
Rulemaking—
In general— Not later than 90 days after the date of enactment of this Act, the Federal Communications Commission, in consultation with the Federal Trade Commission, shall prescribe any rules necessary to implement the provisions of this section.
Minimum contents— At a minimum, the regulations promulgated by the Federal Communications Commission under this subsection shall—
define how local exchange carriers and providers of interconnected VoIP service will obtain affirmative consent from a consumer for a third-party charge;
include adequate protections to ensure that consumers are fully aware of the charges to which they are consenting; and
impose recordkeeping requirements on local exchange carriers and providers of interconnected VoIP service related to any grants of affirmative consent by consumers.
Effective date— The Federal Communications Commission shall prescribe that any rule adopted under subsection (b) shall become effective for a local exchange carrier or provider of interconnected VoIP service not later than the date that the carrier's or provider's contractual obligation to permit another person to charge a customer for a good or service on a bill rendered by the carrier or provider expires, or 180 days after the date of enactment of this Act, whichever is earlier.
4. Relationship to other laws
No preemption of State laws— Nothing in this Act shall be construed to preempt any State law, except that no State law may relieve any person of a requirement otherwise applicable under this Act.
Preservation of FTC authority— Nothing in this Act shall be construed as modifying, limiting, or otherwise affecting the applicability of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) or any other law enforced by the Federal Trade Commission.
5. Severability
If any provision of this Act or the application of that provision to any person or circumstance is held invalid, the remainder of this Act and the application of that provision to any other person or circumstance shall not be affected thereby.