This Code of Conduct adopted by Pilgrim Telephone, Inc. is incorporated into and a required component of all vendor, service provider, sales organization and other Pilgrim Agreements. Pilgrim requires that all persons and businesses doing business with it conduct themselves in an ethical manner, respect consumer rights and privacy, and operate in compliance with all applicable laws and regulations.
The purpose of this Code of Conduct is to provide a working knowledge of basic legal and regulatory requirements, and provide notice of requirements with respect to vendor assurances of compliance with applicable laws and regulations. Persons and businesses executing Agreements with Pilgrim warrant that they have reviewed and will comply with all requirements herein.
The listings contained herein are not intended to constitute a comprehensive statement of the most current applicable statutory language, and it does not constitute the provision of legal advice. Parties relying on this listing are advised to obtain independent legal analysis and advice, and to check for the current language of the statutes contained below as well as any additional statutes and regulations that may apply.
Every party’s compliance obligations require diligence in the operation of any web site, and in all Promotions and communications with the public. Parties must obtain and maintain all hardware and software necessary to ensure proper functioning of any Web site, and monitor all links on its Web site to ensure that the destination sites for such links make no representations that would themselves constitute a violation of their Agreements with Pilgrim. Parties should also make best efforts to ensure that sites linking to its site do not make statements or representations that could constitute a violation of any Agreement with Pilgrim or any of Pilgrim’s terms of service contained in its tariffs or on this web site.
Parties may not knowingly place, or allow others to place, promotions in any work (including but not limited to publications, television channels, web sites, video programming streams, video discs or tapes, magazines, or any other transmission, media or publication) when any part of that work is not fully in compliance with all applicable federal, state and local laws and regulations, including but not limited to obscene or indecent communications and consumer protection laws.
Consumer Protection and Trade Laws. The Federal Trade Commission (FTC) enforces advertising and other requirements as set forth in 15 U.S.C. §§ 5701, 5711-14 and 5721-24 and 16 C.F.R. §§ 16.308.1-308.9. The requirements of the Federal Communications Commission (FCC) are set forth in 47 U.S.C. § 228 and 47 C.F.R. § 64.1501-15. These provisions are attached immediately below at Roman Numerals I – IV.
Dating and Adult Service Provisions. If applicable, Parties are responsible for obtaining and maintaining any records required under 18 U.S.C. § 2257, and ensuring compliance with obscenity and indecency laws, including but not limited to 47 U.S.C. § 223 and 18 U.S.C. §§ 1460-70. These provisions are reproduced at Roman Numerals VI-VIII.
Advertising Regulations. All advertising must be conducted in compliance with all applicable rules and regulations of the FCC, FTC, United States Postal Service and other governmental authorities. Specific attention is directed to:
1. CAN-SPAM Act. Parties must comply with the provisions of the CAN-SPAM Act, to be codified at 18 U.S.C. § 1037. This law is reproduced at Roman Numeral IX. Parties certify that they will not engage in or support spam advertising or promotions.
2. Telemarketing Sales Rule (TSR) and Telemarketing. Any Party engaged in telemarketing must comply with the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. § 6101-08, and the TSR regulations adopted by the FTC found at 16 C.F.R. § 310, as well as the regulations of the FCC found at 47 C.F.R. § 64.1200. Parties certify that they will comply with these regulations and postings to the Do Not Call registry. The FTC’s TSR is reproduced below at Roman Numeral X, the remaining regulations have not been appended.
3. Telephone Consumer Protection Act (TCPA). Unsolicited facsimile messages are governed by the TCPA, found at 47 U.S.C. § 227. These regulations have not been appended.
4. United States Postal Service (USPS) Regulations. The use of mails for unsolicited advertisements or the advertising of adult products or services is regulated pursuant to 39 U.S.C. § 3010, and all mailings must comply with the USPS Domestic Mail Manual. See § C032 for adult mailings. These regulations have not been appended.
Delivery of Automatic Number Identification (ANI). The delivery and use of ANI is restricted by the FCC pursuant to rules found at 47 C.F.R. § 64.1602. Any Party receiving ANI from Pilgrim must comply with 47 C.F.R. § 64.1602 and all other rules and regulations imposed by the FTC and FCC, and indemnify Pilgrim for all costs, legal and other expenses arising from the misuse of ANI. Any instance of misuse of ANI will lead to termination of rights to receive ANI, and may lead to termination of service and reporting of the offending Party to the appropriate legal authorities.
Any Party receiving ANI from Pilgrim consents to Pilgrim obtaining injunctive relief in the courts of Boston, Massachusetts to prevent violations of these provisions of the Code of Conduct, and to the payment of Pilgrim’s attorneys fees for obtaining such injunctive relief. Any Party receiving ANI agrees to these terms and conditions upon receipt of ANI.
The relevant FCC regulations are reprinted at Roman Numeral V. As required by the FCC, Pilgrim has adopted the following restrictions upon the use of ANI when provided by Pilgrim.
(a) Pilgrim --
(1) Permits the use of telephone number and billing information for billing and collection, routing, screening, and completion of the originating telephone subscriber's call or transaction, or for services directly related to the originating telephone subscriber's call or transaction;
(2) Prohibits the reuse or selling the telephone number or billing information without first
(i) Notifying the originating telephone subscriber and,
(ii) Obtaining the affirmative consent of such subscriber for such reuse or sale.
(3) Prohibits the disclosure, except as permitted by paragraphs (1) and (2) above, any information derived from the automatic number identification or charge number service for any purpose other than
(i) Performing the services or transactions that are the subject of the originating telephone subscriber's call,
(ii) Ensuring network performance security, and the effectiveness of call delivery,
(iii) Compiling, using, and disclosing aggregate information, and
(iv) Complying with applicable law or legal process.
(b) The requirements imposed under paragraph (a), above,
shall not prevent a person to whom Pilgrim supplies automatic number identification or charge number services are provided from using
(1) The telephone number and billing information provided pursuant to such service, and
(2) Any information derived from the automatic number identification or charge number service, or from the analysis of the characteristics of a telecommunications transmission, to offer a product or service that is directly related to the products or services previously acquired by that customer from such person. Use of such information is subject to the requirements of 47 CFR 64.1200, restrictions on Telemarketing and Telephone Solicitation, and 64.1504(c), Restrictions on the Use of Toll-Free Numbers.
Applicable statutory provisions as of the date of this web site posting include, but are not limited to, the following:
I. FEDERAL TRADE COMMISSION STATUTE
TITLE 15--Commerce And Trade
CHAPTER 83--Telephone Disclosure And Dispute Resolution
Sec. 5701. Short title; findings
(a) Short title
This chapter may be cited as the ``Telephone Disclosure and Dispute
Resolution Act''.
(b) Findings
The Congress finds the following:
(1) The use of pay-per-call services, most commonly through the use of 900 telephone numbers, has grown exponentially in the past few years into a national, billion-dollar industry as a result of recent technological innovations. Such services are convenient to consumers, cost-effective to vendors, and profitable to communications common carriers.
(2) Many pay-per-call businesses provide valuable information, consumer choices, and stimulate innovative and responsive services that benefit the public.
(3) The interstate nature of the pay-per-call industry means that its activities are beyond the reach of individual States and therefore requires Federal regulatory treatment to protect the public interest.
(4) The lack of nationally uniform regulatory guidelines has led to confusion for callers, subscribers, industry participants, and regulatory agencies as to the rights of callers and the oversight responsibilities of regulatory authorities, and has allowed some pay-per-call businesses to engage in practices that abuse the rights of consumers.
(5) Some interstate pay-per-call businesses have engaged in practices which are misleading to the consumer, harmful to the public interest, or contrary to accepted standards of business practices and thus cause harm to the many reputable businesses that are serving the public.
(6) Because the consumer most often incurs a financial obligation as soon as a pay-per-call transaction is completed, the accuracy and descriptiveness of vendor advertisements become crucial in avoiding consumer abuse. The obligation for accuracy should include price-per-call and duration-of-call information, odds disclosure for lotteries, games, and sweepstakes, and obligations for obtaining parental consent from callers under 18.
(7) The continued growth of the legitimate pay-per-call industry is dependent upon consumer confidence that unfair and deceptive behavior will be effectively curtailed and that consumers will have adequate rights of redress.
(8) Vendors of telephone-billed goods and services must also feel confident in their rights and obligations for resolving billing disputes if they are to use this new marketplace for the sale of products of more than nominal value.
Sec. 5711. Federal Trade Commission regulations
(a) In general
(1) Advertising regulations
The Commission shall prescribe rules in accordance with this subsection to prohibit unfair and deceptive acts and practices in any advertisement for pay-per-call services. Such rules shall require that the person offering such pay-per-call services--
(A) clearly and conspicuously disclose in any advertising the cost of the use of such telephone number, including the total cost or the cost per minute and any other fees for that service and for any other pay-per-call service to which the caller may be transferred;
(B) in the case of an advertisement which offers a prize or award or a service or product at no cost or for a reduced cost, and conspicuously disclose the odds of being able to receive such prize, award, service, or product at no cost or reduced cost, or, if such odds are not calculable in advance, the factors determining such odds;
(C) in the case of an advertisement that promotes a service that is not operated or expressly authorized by a Federal agency but that provides information on a Federal program, include at the beginning of such advertisement a clear disclosure that the service is not authorized, endorsed, or approved by any Federal agency;
(D) shall not direct such advertisement at children under the age of 12, unless such service is a bona fide educational service;
(E) in the case of advertising directed primarily to individuals under the age of 18, clearly and conspicuously state in such advertising that such individual must have the consent of such individual's parent or legal guardian for the use of such services;
(F) be prohibited from using advertisements that emit electronic tones which can automatically dial a pay-per-call telephone number;
(G) ensure that, whenever the number to be called is shown in television and print media advertisements, the charges for the call are clear and conspicuous and (when shown in television advertisements) displayed for the same duration as that number is displayed;
(H) in delivering any telephone message soliciting calls to a pay-per-call service, specify clearly, and at no less than the audible volume of the solicitation, the total cost and the cost per minute and any other fees for that service and for any other pay-per-call service to which the caller may be transferred; and
(I) not advertise an 800 telephone number, or any other telephone number advertised or widely understood to be toll free, from which callers are connected to an access number for a pay-per-call service.
(2) Pay-per-call service standards
The Commission shall prescribe rules to require that each provider of pay-per-call services--
(A) include in each pay-per-call message an introductory disclosure message that--
(i) describes the service being provided;
(ii) specifies clearly and at a reasonably understandable volume the total cost or the cost per minute and any other fees for that service and for any other pay-per-call service to which the caller may be transferred;
(iii) informs the caller that charges for the call begin at the end of the introductory message;
(iv) informs the caller that parental consent is required for calls made by children; and
(v) in the case of a pay-per-call service that is not operated or expressly authorized by a Federal agency but that provides information on any Federal program, a statement that clearly states that the service is not authorized, endorsed, or approved by any Federal agency;
(B) enable the caller to hang up at or before the end of the introductory message without incurring any charge whatsoever;
(C) not direct such services at children under the age of 12, unless such service is a bona fide educational service;
(D) stop the assessment of time-based charges immediately upon disconnection by the caller;
(E) disable any bypass mechanism which allows frequent callers to avoid listening to the disclosure message described in subparagraph (A) after the institution of any price increase and for a period of time sufficient to give such frequent callers adequate and sufficient notice of the price change;
(F) be prohibited from providing pay-per-call services through an 800 number or other telephone number advertised or widely understood to be toll free;
(G) be prohibited from billing consumers in excess of the amounts described in the introductory message and from billing for services provided in violation of the rules prescribed by the Commission pursuant to this section;
(H) ensure that any billing statement for such provider's charges shall--
(i) display any charges for pay-per-call services in a part of the consumer's bill that is identified as not being related to local and long distance telephone charges; and
(ii) for each charge so displayed, specify, at a minimum, the type of service, the amount of the charge, and the date, time, and duration of the call;
(I) be liable for refunds to consumers who have been billed for pay-per-call services pursuant to programs that have been found to have violated the regulations prescribed pursuant to this section or subchapter II of this chapter or any other Federal law; and
(J) comply with such additional standards as the Commission may prescribe to prevent abusive practices.
(3) Access to information
The Commission shall by rule require a common carrier that provides telephone services to a provider of pay-per-call services to make available to the Commission any records and financial information maintained by such carrier relating to the arrangements (other than for the provision of local exchange service) between such carrier and any provider of pay-per-call services.
(4) Evasions
The rules issued by the Commission under this section shall include provisions to prohibit unfair or deceptive acts or practices that evade such rules or undermine the rights provided to customers under this subchapter, including through the use of alternative billing or other procedures.
(5) Exemptions
The regulations prescribed by the Commission pursuant to paragraph (2)(A) may exempt from the requirements of such paragraph—
(A) calls from frequent callers or regular subscribers using a bypass mechanism to avoid listening to the disclosure message required by such regulations, subject to the requirements of paragraph (2)(E); or
(B) pay-per-call services provided at nominal charges, as defined by the Commission in such regulations.
(6) Consideration of other rules required
In conducting a proceeding under this section, the Commission shall consider requiring, by rule or regulation, that providers of pay-per-call services--
(A) automatically disconnect a call after one full cycle of the program; and
(B) include a beep tone or other appropriate and clear signal during a live interactive group program so that callers will be alerted to the passage of time.
(7) Special rule for infrequent publications
The rules prescribed by the Commission under subparagraphs (A) and (G) of paragraph (1) may permit, in the case of publications that are widely distributed, that are printed annually or less frequently, and that have an established policy of not publishing specific prices, advertising that in lieu of the cost disclosures required by such subparagraphs, clearly and conspicuously disclose that use of the telephone number may result in a substantial charge.
(8) Treatment of rules
A rule issued under this subsection shall be treated as a rule issued under section 57a(a)(1)(B) of this title.
(b) Rulemaking
The Commission shall prescribe the rules under subsection (a) of this section within 270 days after October 28, 1992. Such rules shall be prescribed in accordance with section 553 of title 5.
(c) Enforcement
Any violation of any rule prescribed under subsection (a) of this section shall be treated as a violation of a rule respecting unfair or deceptive acts or practices under section 45 of this title. Notwithstanding section 45(a)(2) of this title, communications common carriers shall be subject to the jurisdiction of the Commission for purposes of this subchapter.
Sec. 5712. Actions by States
(a) In general
Whenever an attorney 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 engaged or is engaging in a pattern or practice which violates any rule of the Commission under section 5711(a) of this title, the State may bring a civil action on behalf of its residents in an appropriate district court of the United States to enjoin such pattern or practice, to enforce compliance with such rule of the Commission, to obtain damages on behalf of their residents, or to obtain such further and other relief as the court may deem appropriate.
(b) Notice
The State shall serve prior written notice of any civil action under subsection (a) of this section 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 intervening, to be heard on all matters arising therein, and (3) to file petitions for appeal.
(c) Venue
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 wherein the violation occurred or is occurring, 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.
(d) Investigatory powers
For purposes of bringing any civil action under this section, nothing in this chapter 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 attendance of witnesses or the production of documentary and other evidence.
(e) Effect on State court proceedings
Nothing contained in this section shall prohibit an authorized State official from proceeding in State court on the basis of an alleged violation of any general civil or criminal antifraud statute of such State.
(f) Limitation
Whenever the Commission has instituted a civil action for violation of any rule or regulation under this chapter, 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.
(g) Actions by other State officials
(1) Nothing contained in this section shall prohibit an authorized State official from proceeding in State court on the basis of an alleged violation of any general civil or criminal statute of such State.
(2) In addition to actions brought by an attorney general of a State under subsection (a) of this section, such an action may be brought by officers of such State who are authorized by the State to bring actions in such State for protection of consumers and who are designated by the Commission to bring an action under subsection (a) of this section against persons that the Commission has determined have or are engaged in a pattern or practice which violates a rule of the Commission under section 5711(a) of this title.
Sec. 5713. Administration and applicability of subchapter
(a) In general
Except as otherwise provided in section 5712 of this title, this subchapter 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 chapter, except for purposes of this subchapter.
(b) Actions by Commission
The Commission shall prevent any person from violating a rule of the Commission under section 5711 of this title 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 incorporated into and made a part of this subchapter. Any person who violates such rule 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, 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 subchapter.
Sec. 5714. Definitions
For purposes of this subchapter:
(1) The term ``pay-per-call services'' has the meaning provided in section 228(i) of title 47, except that the Commission by rule may, notwithstanding subparagraphs (B) and (C) of section 228(i)(1) of title 47, extend such definition to other similar services providing audio information or audio entertainment if the Commission determines that such services are susceptible to the unfair and deceptive practices that are prohibited by the rules prescribed pursuant to section 5711(a) of this title.
(2) The term ``attorney general'' means the chief legal officer of a State.
(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 ``Commission'' means the Federal Trade Commission.
Sec. 5721. Regulations
(a) In general
(1) Rules required
The Commission shall, in accordance with the requirements of this section, prescribe rules establishing procedures for the correction of billing errors with respect to telephone-billed purchases. The rules prescribed by the Commission shall also include provisions to prohibit unfair or deceptive acts or practices that evade such rules or undermine the rights provided to customers under this subchapter.
(2) Substantial similarity to credit billing
The Commission shall promulgate rules under this section that impose requirements that are substantially similar to the requirements imposed, with respect to the resolution of credit disputes, under the Truth in Lending and Fair Credit Billing Acts [15 U.S.C. 1601 et seq., 1666 et seq.].
(3) Treatment of rule
A rule issued under paragraph (1) shall be treated as a rule issued under section 57a(a)(1)(B) of this title.
(b) Rulemaking schedule and procedure
The Commission shall prescribe the rules under subsection (a) of this section within 270 days after October 28, 1992. Such rules shall be prescribed in accordance with section 553 of title 5.
(c) Enforcement
Any violation of any rule prescribed under subsection (a) of this section shall be treated as a violation of a rule under section 45 of this title regarding unfair or deceptive acts or practices. Notwithstanding section 45(a)(2) of this title, communications common carriers shall be subject to the jurisdiction of the Commission for purposes of this subchapter.
(d) Correction of billing errors and correction of credit reports
In prescribing rules under this section, the Commission shall consider, with respect to telephone-billed purchases, the following:
(1) The initiation of a billing review by a customer.
(2) Responses by billing entities and providing carriers to the initiation of a billing review.
(3) Investigations concerning delivery of telephone-billed purchases.
(4) Limitations upon providing carrier responsibilities, limitations on a carrier's responsibility to verify delivery of audio information or entertainment.
(5) Requirements on actions by billing entities to set aside charges from a customer's billing statement.
(6) Limitations on collection actions by billing entities and vendors.
(7) The regulation of credit reports on billing disputes.
(8) The prompt notification of credit to an account.
(9) Rights of customers and telephone common carriers regarding claims and defenses.
(10) The extent to which the regulations should diverge from requirements under the Truth in Lending and Fair Credit Billing Acts [15 U.S.C. 1601 et seq., 1666 et seq.] in order to protect customers, and in order to be cost effective to billing entities.
Sec. 5722. Relation to State laws
(a) State law applicable unless inconsistent
This subchapter does not annul, alter, or affect, or exempt any person subject to the provisions of this subchapter from complying with, the laws of any State with respect to telephone billing practices, except to the extent that those laws are inconsistent with any provision of this subchapter, and then only to the extent of the inconsistency. The Commission is authorized to determine whether such inconsistencies exist. The Commission may not determine that any State law is inconsistent with any provision of this subchapter [1] if the Commission determines that such law gives greater protection to the consumer.
(b) Regulatory exemptions
The Commission shall by regulation exempt from the requirements of this subchapter any class of telephone-billed purchase transactions within any State if it determines that under the law of that State that class of transactions is subject to requirements substantially similar to those imposed under this subchapter \1\ or that such law gives greater protection to the consumer, and that there is adequate provision for enforcement.
Sec. 5724. Definitions
As used in this subchapter--
(1) The term ``telephone-billed purchase'' means any purchase that is completed solely as a consequence of the completion of the call or a subsequent dialing, touch tone entry, or comparable action of the caller. Such term does not include--
(A) a purchase by a caller pursuant to a preexisting agreement with the vendor;
(B) local exchange telephone services or interexchange telephone services or any service that the Federal Communications Commission determines, by rule--
(i) is closely related to the provision of local exchange telephone services or interexchange telephone services; and
(ii) is subject to billing dispute resolution procedures required by Federal or State statute or regulation; or
(C) the purchase of goods or services which is otherwise subject to billing dispute resolution procedures required by Federal statute or regulation.
(2) A ``billing error'' consists of any of the following:
(A) A reflection on a billing statement for a telephone-billed purchase which was not made by the customer or, if made, not in the amount reflected on such statement.
(B) A reflection on a billing statement of a telephone-billed purchase for which the customer requests additional clarification, including documentary evidence thereof.
(C) A reflection on a billing statement of a telephone-billed purchase that was not accepted by the customer or not provided to the customer in accordance with the stated terms of the transaction.
(D) A reflection on a billing statement of a telephone-billed purchase for a call made to an 800 or other toll free telephone number.
(E) The failure to reflect properly on a billing statement a payment made by the customer or a credit issued to the customer with respect to a telephone-billed purchase.
(F) A computation error or similar error of an accounting nature on a statement.
(G) Failure to transmit the billing statement to the last known address of the customer, unless that address was furnished less than twenty days before the end of the billing cycle for which the statement is required.
(H) Any other error described in regulations prescribed by the Commission pursuant to section 553 of title 5.
(3) The term ``Commission'' means the Federal Trade Commission.
(4) The term ``providing carrier'' means a local exchange or interexchange common carrier providing telephone services (other than local exchange services) to a vendor for a telephone-billed purchase that is the subject of a billing error complaint.
(5) The term ``vendor'' means any person who, through the use of the telephone, offers goods or services for a telephone-billed purchase.
(6) The term ``customer'' means any person who acquires or attempts to acquire goods or services in a telephone-billed purchase.
II. FEDERAL TRADE COMMISSION REGULATIONS
16 CFR PART 308 -- Trade Regulation Rule Pursuant To The Telephone Disclosure And Dispute Resolution Act Of 1992
Section 308.1 Scope of regulations in this part.
Section 308.2 Definitions.
Section 308.3 Advertising of pay-per-call services.
Section 308.4 Special rule for infrequent publications.
Section 308.5 Pay-per-call service standards.
Section 308.6 Access to information.
Section 308.7 Billing and collection for pay-per-call services.
Section 308.8 Severability.
Section 308.9 Rulemaking review.
§308.1 Scope of regulations in this part.
This rule implements titles II and III of the Telephone Disclosure and Dispute Resolution Act of 1992, to be codified in relevant part at 15 U.S.C. 5711-14, 5721-24.
§308.2 Definitions.
(a) Bona fide educational service means any pay-per-call service dedicated to providing information or instruction relating to education, subjects of academic study, or other related areas of school study.
(b) Commission means the Federal Trade Commission.
(c) Pay-per-call service has the meaning provided in section 228 of the Communications Act of 1934, 47 U.S.C. 228. [2]
(d) Person means any individual, partnership, corporation, association, government or governmental subdivision or agency, or other entity.
(e) (1) Presubscription or comparable arrangement means a contractual agreement in which
(i) The service provider clearly and conspicuously discloses to the consumer all material terms and conditions associated with the use of the service, including the service provider's name and address, a business telephone number which the consumer may use to obtain additional information or to register a complaint, and the rates for the service;
(ii) The service provider agrees to notify the consumer of any future rate changes;
(iii) The consumer agrees to utilize the service on the terms and conditions disclosed by the service provider; and
(iv) The service provider requires the use of an identification number or other means to prevent unauthorized access to the service by nonsubscribers.
(2) Disclosure of a credit card or charge card number, along with authorization to bill that number, made during the course of a call to a pay-per-call service shall constitute a presubscription or comparable arrangement if the credit or charge card is subject to the dispute resolution requirements of the Fair Credit Billing Act and the Truth in Lending Act, as amended. No other action taken by the consumer during the course of a call to a pay-per-call service can be construed as creating a presubscription or comparable arrangement.
(f) Program-length commercial means any commercial or other advertisement fifteen (15) minutes in length or longer or intended to fill a television or radio broadcasting or cablecasting time slot of fifteen (15) minutes in length or longer.
(g) Provider of pay-per-call services means any person who sells or offers to sell a pay-per-call service. A person who provides only transmission services or billing and collection services shall not be considered a provider of pay-per-call services.
(h) Reasonably understandable volume means at an audible level that renders the message intelligible to the receiving audience, and, in any event, at least the same audible level as that principally used in the advertisement or the pay-per-call service.
(i) Service bureau means any person, other than a common carrier, who provides, among other things, access to telephone service and voice storage to pay-per-call service providers.
(j) Slow and deliberate manner means at a rate that renders the message intelligible to the receiving audience, and, in any event, at a cadence or rate no faster than that principally used in the advertisement or the pay-per-call service.
(k) Sweepstakes, including games of chance, means a game or promotional mechanism that involves the elements of a prize and chance and does not require consideration.
§308.3 Advertising of pay-per-call services.
(a) General requirements. The following requirements apply to disclosures required in advertisements under §§308.3 (b)-(d), and (f):
(1) The disclosures shall be made in the same language as that principally used in the advertisement.
(2) Television video and print disclosures shall be of a color or shade that readily contrasts with the background of the advertisement.
(3) In print advertisements, disclosures shall be parallel with the base of the advertisement.
(4) Audio disclosures, whether in television or radio, shall be delivered in a slow and deliberate manner and in a reasonably understandable volume.
(5) Nothing contrary to, inconsistent with, or in mitigation of, the required disclosures shall be used in any advertisement in any medium; nor shall any audio, video or print technique be used that is likely to detract significantly from the communication of the disclosures.
(6) In any program-length commercial, required disclosures shall be made at least three times (unless more frequent disclosure is otherwise required) near the beginning, middle and end of the commercial.
(b) Cost of the call.
(1) The provider of pay-per-call services shall clearly and conspicuously disclose the cost of the call, in Arabic numerals, in any advertisement for the pay-per-call service, as follows:
(i) If there is a flat fee for the call, the advertisement shall state the total cost of the call.
(ii) If the call is billed on a time-sensitive basis, the advertisement shall state the cost per minute and any minimum charges. If the length of the program can be determined in advance, the advertisement shall also state the maximum charge that could be incurred if the caller listens to the complete program.
(iii) If the call is billed on a variable rate basis, the advertisement shall state, in accordance with §§308.3(b)(1) (i) and (ii), the cost of the initial portion of the call, any minimum charges, and the range of rates that may be charged depending on the options chosen by the caller.
(iv) The advertisement shall disclose any other fees that will be charged for the service.
(v) if the caller may be transferred to another pay-per-call service, the advertisement shall disclose the cost of the other call, in accordance with §§308.3(b)(1) (i), (ii), (iii), and (iv).
(2) For purposes of §308.3(b), disclosures shall be made "clearly and conspicuously" as
set forth in §308.3(a) and as follows:
(i) In a television or videotape advertisement, the video disclosure shall appear adjacent to each video presentation of the pay-per-call number. However, in an advertisement displaying more than one pay-per-call number with the same cost, the video disclosure need only appear adjacent to the largest presentation of the pay-per-call number. Each letter or numeral of the video disclosure shall be, at a minimum, one-half the size of each letter or numeral of the pay-per-call number to which the disclosure is adjacent. In addition, the video disclosure shall appear on the screen for the duration of the presentation of the pay-per-call number. An audio disclosure shall be made at least once, simultaneously with a video presentation of the disclosure. However, no audio presentation of the disclosure is required in: (A) An advertisement fifteen (15) seconds or less in length in which the pay-per-call number is not presented in the audio portion, or (B) an advertisement in which there is no audio presentation of information regarding the pay-per-call service, including the pay-per-call number. In an advertisement in which the pay-per-call number is presented only in the audio portion, the cost of the call shall be delivered immediately following the first and last delivery of the pay-per-call number, except that in a program-length commercial, the disclosure shall be delivered immediately following each delivery of the pay-per-call number.
(ii) In a print advertisement, the disclosure shall be placed adjacent to each presentation of the pay-per-call number. However, in an advertisement displaying more than one pay-per-call number with the same cost, the disclosure need only appear adjacent to the largest presentation of the pay-per-call number. Each letter or numeral of the disclosure shall be, at a minimum, one-half the size of each letter or numeral of the pay-per-call number to which the disclosure is adjacent.
(iii) In a radio advertisement, the disclosure shall be made at least once, and shall be delivered immediately following the first delivery of the pay-per-call number. In a program-length commercial, the disclosure shall be delivered immediately following each delivery of the pay-per-call number.
(c) Sweepstakes; games of chance.
(1) The provider of pay-per-call services that advertises a prize or award or a service or product at no cost or for a reduced cost, to be awarded to the winner of any sweepstakes, including games of chance, shall clearly and conspicuously disclose in the advertisement the odds of being able to receive the prize, award, service, or product at no cost or reduced cost. If the odds are not calculable in advance, the advertisement shall disclose the factors used in calculating the odds. Either the advertisement or the preamble required by §308.5(a) for such service shall clearly and conspicuously disclose that no call to the pay-per-call service is required to participate, and shall also disclose the existence of a free alternative method of entry, and either instructions on how to enter, or a local or toll-free telephone number or address to which consumers may call or write for information on how to enter the sweepstakes. Any description or characterization of the prize, award, service, or product that is being offered at no cost or reduced cost shall be truthful and accurate.
(2) For purposes of §308.3(c), disclosures shall be made "clearly and conspicuously" as set forth in §308.3(a) and as follows:
(i) In a television or videotape advertisement, the disclosures may be made in either the audio or video portion of the advertisement. If the disclosures are made in the video portion, they shall appear on the screen in sufficient size and for sufficient time to allow consumers to read and comprehend the disclosures.
(ii) In a print advertisement, the disclosures shall appear in a sufficient size and prominence and such location to be readily noticeable, readable and comprehensible.
(d) Federal programs.
(1) The provider of pay-per-call services that advertises a pay-per-call service that is not operated or expressly authorized by a Federal agency, but that provides information on a Federal program, shall clearly and conspicuously disclose in the advertisement that the pay-per-call service is not authorized, endorsed, or approved by any Federal agency. Advertisements providing information on a Federal program shall include, but not be limited to, advertisements that contain a seal, insignia, trade or brand name, or any other term or symbol that reasonably could be interpreted or construed as implying any Federal government connection, approval, or endorsement.
(2) For purposes of §308.3(d), disclosures shall be made "clearly and conspicuously" as set forth in §308.3(a) and as follows:
(i) In a television or videotape advertisement, the disclosure may be made in either the audio or video portion of the advertisement. If the disclosure is made in the video portion, it shall appear on the screen in sufficient size and for sufficient time to allow consumers to read and comprehend the disclosure. The disclosure shall begin within the first fifteen (15) seconds of the advertisement.
(ii) In a print advertisement, the disclosure shall appear in a sufficient size and prominence and such location to be readily noticeable, readable and comprehensible. The disclosure shall appear in the top one-third of the advertisement.
(iii) In a radio advertisement, the disclosure shall begin within the first fifteen (15) seconds of the advertisement.
(e) Prohibition on advertising to children.
(1) The provider of pay-per-call services shall not direct advertisements for such pay-per-call services to children under the age of 12, unless the service is a bona fide educational service.
(2) For the purposes of this regulation, advertisements directed to children under 12 shall include: any pay-per-call advertisement appearing during or immediately adjacent to programming for which competent and reliable audience composition data demonstrate that more than 50% of the audience is composed of children under 12, and any pay-per-call advertisement appearing in a periodical for which competent and reliable readership data demonstrate that more than 50% of the readership is composed of children under 12.
(3) For the purposes of this regulation, if competent and reliable audience composition or readership data does not demonstrate that more than 50% of the audience or readership is composed of children under 12, then the Commission shall consider the following criteria in determining whether an advertisement is directed to children under 12:
(i) Whether the advertisement appears in a publication directed to children under 12, including, but not limited to, books, magazines and comic books;
(ii) Whether the advertisement appears during or immediately adjacent to television programs directed to children under 12, including, but not limited to, children's programming as defined by the Federal Communications Commission, animated programs, and after-school programs;
(iii) Whether the advertisement appears on a television station or channel directed to children under 12;
(iv) Whether the advertisement is broadcast during or immediately adjacent to radio programs directed to children under 12, or broadcast on a radio station directed to children under 12;
(v) Whether the advertisement appears on the same video as a commercially-prepared video directed to children under 12, or preceding a movie directed to children under 12 shown in a movie theater;
(vi) Whether the advertisement or promotion appears on product packaging directed to children under 12; and
(vii) Whether the advertisement, regardless of when or where it appears, is directed to children under 12 in light of its subject matter, visual content, age of models, language, characters, tone, message, or the like.
(f) Advertising to individuals under the age of 18.
(1) The provider of pay-per-call services shall ensure that any pay-per-call advertisement directed primarily to individuals under the age of 18 shall contain a clear and conspicuous disclosure that all individuals under the age of 18 must have the permission of such individual's parent or legal guardian prior to calling such pay-per-call service.
(2) For purposes of §308.3(f), disclosures shall be made "clearly and conspicuously" as set forth in §308.3(a) and as follows:
(i) In a television or videotape advertisement, each letter or numeral of the video disclosure shall be, at a minimum, one-half the size of each letter or numeral of the largest presentation of the pay-per-call number. The video disclosure shall appear on the screen for sufficient time to allow consumers to read and comprehend the disclosure. An audio disclosure shall be made at least once, simultaneously with a video presentation of the disclosure. However, no audio presentation of the disclosure is required in: (A) An advertisement fifteen (15) seconds or less in length in which the pay-per-call number is not presented in the audio portion, or (B) an advertisement in which there is no audio presentation of information regarding the pay-per-call service, including the pay-per-call number.
(ii) In a print advertisement, each letter or numeral of the disclosure shall be, at a minimum, one-half the size of each letter or numeral of the largest presentation of the pay-per-call number.
(3) For the purposes of this regulation, advertisements directed primarily to individuals under 18 shall include: Any pay-per-call advertisement appearing during or immediately adjacent to programming for which competent and reliable audience composition data demonstrate that more than 50% of the audience is composed of individuals under 18, and any pay-per-call advertisement appearing in a periodical for which competent and reliable readership data demonstrate that more than 50% of the readership is composed of individuals under 18.
(4) For the purposes of this regulation, if competent and reliable audience composition or readership data does not demonstrate that more than 50% of the audience or readership is composed of individuals under 18, then the Commission shall consider the following criteria in determining whether an advertisement is directed primarily to individuals under 18:
(i) Whether the advertisement appears in publications directed primarily to individuals under 18, including, but not limited to, books, magazines and comic books;
(ii) Whether the advertisement appears during or immediately adjacent to television programs directed primarily to Individuals under 18, including, but not limited to, mid-afternoon weekday television shows;
(iii) Whether the advertisement is broadcast on radio stations that are directed primarily to individuals under 18;
(iv) Whether the advertisement appears on a cable or broadcast television station directed primarily to individuals under 18;
(v) Whether the advertisement appears on the same video as a commercially-prepared video directed primarily to individuals under 18, or preceding a movie directed primarily to individuals under 18 shown in a movie theater; and
(vi) Whether the advertisement, regardless of when or where it appears, is directed primarily to individuals under 18 in light of its subject matter, visual content, age of models, language, characters, tone, massage, or the like.
(g) Electronic tones in advertisements. The provider of pay-per-call services is prohibited from using advertisements that emit electronic tones that can automatically dial a pay-per-call service.
(h) Telephone solicitations. The provider of pay-per-call services shall ensure that any telephone message that solicits calls to the pay-per-call service discloses the cost of the call in a slow and deliberate manner and in a reasonably understandable volume, in accordance with §§308.3(b)(1)(i)-(v).
(i) Referral to toll-free telephone numbers. The provider of pay-per-call services is prohibited from referring in advertisements to an 800 telephone number, or any other telephone number advertised as or widely understood to be toll-free, if that number violates the prohibition concerning toll-free numbers set forth in §308.5(i).
§308.4 Special rule for infrequent publications.
(a) The provider of any pay-per-call service that advertises a pay-per-call service in a publication that meets the requirements set forth in §308.4(c) may include in such advertisement, in lieu of the cost disclosures required by §308.3(b), a clear and conspicuous disclosure that a call to the advertised pay-per-call service may result in a substantial charge.
(b) The provider of any pay-per-call service that places an alphabetical listing in a publication that meets the requirements set forth in §308.4(c) is not required to make any of the disclosures required by §§308.3 (b), (c), (d) and (f) in the alphabetical listing, provided that such listing does not contain any information except the name, address and telephone number of the pay-per-call provider.
(c) The publication referred to in §308.4 (a) and (b) must be:
(1) Widely distributed;
(2) Printed annually or less frequently; and
(3) One that has an established policy of not publishing specific prices in advertisements.
§308.5 Pay-per-call service standards.
(a) Preamble message. The provider of pay-per-call services shall include, in each pay-per-call message, an introductory disclosure message ("preamble") in the same language as that principally used in the pay-per-call message, that clearly, in a slow and deliberate manner and in a reasonably understandable volume:
(1) Identifies the name of the provider of the pay-per-call service and describes the service being provided;
(2) Specifies the cost of the service as follows:
(i) If there is a flat fee for the call, the preamble shall state the total cost of the call;
(ii) If the call is billed on a time-sensitive basis, the preamble shall state the cost per minute and any minimum charges; if the length of the program can be determined in advance, the preamble shall also state the maximum charge that could be incurred if the caller listens to the complete program;
(iii) If the call is billed on a variable rate basis, the preamble shall state, in accordance with §§308.5(a)(2) (i) and (ii), the cost of the initial portion of the call, any minimum charges, and the range of rates that may be charged depending on the options chosen by the caller;
(iv) Any other fees that will be charged for the service shall be disclosed, as well as fees for any other pay-per-call service to which the caller may be transferred;
(3) Informs the caller that charges for the call begin, and that to avoid charges the call must be terminated, three seconds after a clearly discernible signal or tone indicating the end of the preamble;
(4) Informs the caller that anyone under the age of 18 must have the permission of parent or legal guardian in order to complete the call; and
(5) Informs the caller, in the case of a pay-per-call service that is not operated or expressly authorized by a Federal agency but that provides information on a Federal program, or that uses a trade or brand name or any other term that reasonably could be interpreted or construed as implying any Federal government connection, approval or endorsement, that the pay-per-call service is not authorized, endorsed, or approved by any Federal agency.
(b) No charge to caller for preamble message. The provider of pay-per-call services is prohibited from charging a caller any amount whatsoever for such a service if the caller hangs up at any time prior to three seconds after the signal or tone indicating the end of the preamble described in §308.5(a). However, the three-second delay, and the message concerning such delay described in §308.5(a)(3), is not required if the provider of pay-per-call services offers the caller an affirmative means (such as pressing a key on a telephone keypad) of indicating a decision to incur the charges.
(c) Nominal cost calls. The preamble described in §308.5(a) is not required when the entire cost of the pay-per-call service, whether billed as a flat rate or on a time sensitive basis, is $2.00 or less.
(d) Data service calls. The preamble described in §308.5(a) is not required when the entire call consists of the non-verbal transmission of information.
(e) Bypass mechanism. The provider of pay-per-call services that offers to frequent callers or regular subscribers to such services the option of activating a bypass mechanism to avoid listening to the preamble during subsequent calls shall not be deemed to be in violation of §308.5(a), provided that any such bypass mechanism shall be disabled for a period of no less than 30 days immediately after the institution of an increase in the price for the service or a change in the nature of the service offered.
(f) Billing limitations. The provider of pay-per-call services is prohibited from billing consumers in excess of the amount described in the preamble for those services and from billing for any services provided in violation of any section of this rule.
(g) Stopping the assessment of time-based charges. The provider of pay-per-call services shall stop the assessment of time-based charges immediately upon disconnection by the caller.
(h) Prohibition on services to children. The provider of pay-per-call services shall not direct such services to children under the age of 12, unless such service is a bona fide educational service. The Commission shall consider the following criteria in determining whether a pay-per-call service is directed to children under 12:
(1) Whether the pay-per-call service is advertised in the manner set forth in §§308.3(e) (2) and (3); and
(2) Whether the pay-per-call service, regardless of when or where it is advertised, is directed to children under 12, in light of its subject matter, content, language, featured personality, characters, tone, message, or the like.
(i) Prohibition concerning toll-free numbers. Any person is prohibited from using an 800 number or other telephone number advertised as or widely understood to be toll-free in a manner that would result in:
(1) The calling party being assessed, by virtue of completing the call, a charge for the call;
(2) The calling party being connected to an access number for, or otherwise transferred to, a pay-per-call service;
(3) The calling party being charged for information conveyed during the call unless the calling party has a presubscription or comparable arrangement to be charged for the information; or
(4) The calling party being called back collect for the provision of audio or data information services, simultaneous voice conversation services, or products.
(j) Disclosure requirements for billing statements. The provider of pay-per-call services shall ensure that any billing statement for such provider's charges shall:
(1) Display any charges for pay-per-call services in a portion of the consumer's bill that is identified as not being related to local and long distance telephone charges;
(2) For each charge so displayed, specify the type of service, the amount of the charge, and the date, time, and, for calls billed on a time-sensitive basis, the duration of the call; and
(3) Display the local or toll-free telephone number where consumers can obtain answers to their questions and information on their rights and obligations with regard to their use of pay-per-call services, and can obtain the name and mailing address of the provider of pay-per-call services.
(k) Refunds to consumers. The provider of pay-per-call services shall be liable for refunds or credits to consumers who have been billed for pay-per-call services, and who have paid the charges for such services, pursuant to pay-per-call programs that have been found to have violated any provision of this rule or any other Federal rule or law.
(l) Service bureau liability. A service bureau shall be liable for violations of the rule by pay-per-call services using its call processing facilities where it knew or should have known of the violation.
§308.6 Access to information.
Any common carrier that provides telecommunication services to any provider of pay-per-call services shall make available to the Commission, upon written request, any records and financial information maintained by such carrier relating to the arrangements (other than for the provision of local exchange service) between such carrier and any provider of pay-per-call services.
§308.7 Billing and collection for pay-per-call services.
(a) Definitions. For the purposes of this section, the following definitions shall apply:
(1) Billing entity means any person who transmits a billing statement to a customer for a telephone-billed purchase, or any person who assumes responsibility for receiving and responding to billing error complaints or inquiries.
(2) Billing error means any of the following:
(i) A reflection on a billing statement of a telephone-billed purchase that was not made by the customer nor made from the telephone of the customer who was billed for the purchase or, if made, was not in the amount reflected on such statement.
(ii) A reflection on a billing statement of a telephone-billed purchase for which the customer requests additional clarification, including documentary evidence thereof.
(iii) A reflection on a billing statement of a telephone-billed purchase that was not accepted by the customer or not provided to the customer in accordance with the stated terms of the transaction.
(iv) A reflection on a billing statement of a telephone-billed purchase for a call made to an 800 or other toll free telephone number.
(v) The failure to reflect properly on a billing statement a payment made by the customer or a credit issued to the customer with respect to a telephone-billed purchase.
(vi) A computation error or similar error of an accounting nature on a billing statement of a telephone-billed purchase.
(vii) Failure to transmit a billing statement for a telephone-billed purchase to a customer's last known address if that address was furnished by the customer at least twenty days before the end of the billing cycle for which the statement was required.
(viii) A reflection on a billing statement of a telephone-billed purchase that is not identified in accordance with the requirements of §308.5(j).
(3) Customer means any person who acquires or attempts to acquire goods or services in a telephone-billed purchase, or who receives a billing statement for a telephone-billed purchase charged to a telephone number assigned to that person by a providing carrier.
(4) Preexisting agreement means a "presubscription or comparable arrangement," as that term is defined in §308.2(e).
(5) Providing carrier means a local exchange or interexchange common carrier providing telephone services (other than local exchange services) to a vendor for a telephone-billed purchase that is the subject of a billing error complaint or inquiry.
(6) Telephone-billed purchase means any purchase that is completed solely as a consequence of the completion of the call or a subsequent dialing, touch tone entry, or comparable action of the caller. Such term does not include:
(i) A purchase by a caller pursuant to a preexisting agreement with a vendor;
(ii) Local exchange telephone services or interexchange telephone services or any service that the Federal Communications Commission determines by rule --
(A) Is closely related to the provision of local exchange telephone services or interexchange telephone services; and
(B) Is subject to billing dispute resolution procedures required by Federal or state statute or regulation; or
(iii) The purchase of goods or services that is otherwise subject to billing dispute resolution procedures required by Federal statute or regulation.
(7) Vendor means any person who, through the use of the telephone, offers goods or services for a telephone-billed purchase.
(b) Initiation of billing review. A customer may initiate a billing review with respect to a telephone-billed purchase by providing the billing entity with notice of a billing error no later than 60 days after the billing entity transmitted the first billing statement that contains a charge for such telephone-billed purchase. If the billing error is the reflection on a billing statement of a telephone-billed purchase not provided to the customer in accordance with the stated terms of the transaction, the 60-day period shall begin to run from the date the goods or services are delivered or, if not delivered, should have been delivered, if such date is later than the date the billing statement was transmitted. A billing error notice shall:
(1) Set forth or otherwise enable the billing entity to identify the customer's name and the telephone number to which the charge was billed;
(2) Indicate the customer's belief that the statement contains a billing error and the type, date, and amount of such; and
(3) Set forth the reasons for the customer's belief, to the extent possible, that the statement contains a billing error.
(c) Disclosure of method of providing notice; presumption if oral notice is permitted. A billing entity shall clearly and conspicuously [3] disclose on each billing statement or on other material accompanying the billing statement the method (oral or written) by which the customer may provide notice to initiate review of a billing error in the manner set forth in §308.7(b). If oral notice is permitted, any customer who orally communicates an allegation of a billing error to a billing entity shall be presumed to have properly initiated a billing review in accordance with the requirements of §308.7(b).
(d) Response to customer notice. A billing entity that receives notice of a billing error as described in §308.7(b) shall:
(1) Send a written acknowledgement to the customer including a statement that any disputed amount need not be paid pending investigation of the billing error. This shall be done no later than forty (40) days after receiving the notice, unless the action required by §308.7(d)(2) is taken within such 40-day period; and
(2) (i) Correct the billing error and credit the customer's account for any disputed amount and any related charges, and notify the customer of the correction. The billing entity also shall disclose to the customer that collection efforts may occur despite the credit, and shall provide the names, mailing addresses, and business telephone numbers of the vendor and providing carrier, as applicable, that are the subject of the telephone-billed purchase, or provide the customer with a local or toll-free telephone number that the customer may call to obtain this information directly. However, the billing entity is not required to make the disclosure concerning collection efforts if the vendor, its agent, or the providing carrier, as applicable, will not collect or attempt to collect the disputed charge; or
(ii) Transmit an explanation to the customer, after conducting a reasonable investigation (including, where appropriate, contacting the vendor or providing carrier), [4] setting forth the reasons why it has determined that no billing error occurred or that a different billing error occurred from that asserted, make any appropriate adjustments to the customer's account, and, if the customer so requests, provide a written explanation and copies of documentary evidence of the customer's indebtedness.
(3) The action required by §308.7(d)(2) shall be taken no later than two complete billing cycles of the billing entity (in no event later than ninety (90) days) after receiving the notice of the billing error and before taking any action to collect the disputed amount, or any part thereof. After complying with §308.7(d)(2), the billing entity shall:
(i) If it is determined that any disputed amount is in error, promptly notify the appropriate providing carrier or vendor, as applicable, of its disposition of the customer's billing error and the reasons therefor; and
(ii) Promptly notify the customer in writing of the time when payment is due of any portion of the disputed amount determined not to be in error, which time shall be the longer of ten (10) days or the number of days the customer is ordinarily allowed (whether by custom, contract or state law) to pay undisputed amounts, and that failure to pay such amount may be reported to a credit reporting agency or subject the customer to a collection action, if that in fact may happen.
(e) Withdrawal of billing error notice. A billing entity need not comply with the requirements of §308.7(d) if the customer has, after giving notice of a billing error and before the expiration of the time limits specified therein, agreed that the billing statement was correct or agreed to withdraw voluntarily the billing error notice.
(f) Limitation on responsibility for billing error. After complying with the provisions of §308.7(d), a billing entity has no further responsibility under that section if the customer continues to make substantially the same allegation with respect to a billing error.
(g) Customer's right to withhold disputed amount; limitation on collection action. Once the customer has submitted notice of a billing error to a billing entity, the customer need not pay, and the billing entity, providing carrier, or vendor may not try to collect, any portion of any required payment that the customer reasonably believes is related to the disputed amount until the billing entity receiving the notice has complied with the requirements of §308.7(d). The billing entity, providing carrier, or vendor are not prohibited from taking any action to collect any undisputed portion of the bill, or from reflecting a disputed amount and related charges on a billing statement, provided that the billing statement clearly states that payment of any disputed amount or related charges is not required pending the billing entity's compliance with §308.7(d).
(h) Prohibition on charges for initiating billing review. A billing entity, providing carrier, or vendor may not impose on the customer any charge related to the billing review, including charges for documentation or investigation.
(i) Restrictions on credit reporting –
(1) Adverse credit reports prohibited. Once the customer has submitted notice of a billing error to a billing entity, a billing entity, providing carrier, vendor, or other agent may not report or threaten directly or indirectly to report adverse information to any person because of the customer's withholding payment of the disputed amount or related charges, until the billing entity has met the requirements of §308.7(d) and allowed the customer as many days thereafter to make payment as prescribed by §308.7(d)(3)(ii).
(2) Reports on continuing disputes. If a billing entity receives further notice from a customer within the time allowed for payment under §308.7(i)(1) that any portion of the billing error is still in dispute, a billing entity, providing carrier, vendor, or other agent may not report to any person that the customer's account is delinquent because of the customer's failure to pay that disputed amount unless the billing entity, providing carrier, vendor, or other agent also reports that the amount is in dispute and notifies the customer in writing of the name and address of each person to whom the vendor, billing entity, providing carrier, or other agent has reported the account as delinquent.
(3) Reporting of dispute resolutions required. A billing entity, providing carrier, vendor, or other agent shall report in writing any subsequent resolution of any matter reported pursuant to §308.7(i)(2) to all persons to whom such matter was initially reported.
(j) Forfeiture of right to collect disputed amount. Any billing entity, providing carrier, vendor, or other agent who fails to comply with the requirements of §§308.7(c), (d), (g), (h), or (i) forfeits any right to collect from the customer the amount indicated by the customer, under §308.7(b)(2), to be in error, and any late charges or other related charges thereon, up to $50 per transaction.
(k) Prompt notification of returns and crediting of refunds. When a vendor other than the billing entity accepts the return of property or forgives a debt for services in connection with a telephone-billed purchase, the vendor shall, within seven (7) business days from accepting the return or forgiving the debt, either:
(1) Mail or deliver a cash refund directly to the customer's address, and notify the appropriate billing entity that the customer has been given a refund, or
(2) Transmit a credit statement to the billing entity through the vendor's normal channels for billing telephone-billed purchases. The billing entity shall, within seven (7) business days after receiving a credit statement, credit the customer's account with the amount of the refund.
(l) Right of customer to assert claims or defenses. Any billing entity or providing carrier who seeks to collect charges from a customer for a telephone-billed purchase that is the subject of a dispute between the customer and the vendor shall be subject to all claims (other than tort claims) and defenses arising out of the transaction and relating to the failure to resolve the dispute that the customer could assert against the vendor, if the customer has made a good faith attempt to resolve the dispute with the vendor or providing carrier (other than the billing entity). The billing entity or providing carrier shall not be liable under this paragraph for any amount greater than the amount billed to the customer for the purchase (including any related charges).
(m) Retaliatory actions prohibited. A billing entity, providing carrier, vendor, or other agent may not accelerate any part of the customer's indebtedness or restrict or terminate the customer's access to pay-per-call services solely because the customer has exercised in good faith rights provided by this section.
(n) Notice of billing error rights –
(1) Annual statement.
(i) A billing entity shall mail or deliver to each customer, with the first billing statement for a telephone-billed purchase mailed or delivered after the effective date of these regulations, a statement of the customer's billing rights with respect to telephone-billed purchases. Thereafter the billing entity shall mail or deliver the billing rights statement at least once per calendar year to each customer to whom it has mailed or delivered a billing statement for a telephone-billed purchase during the previous twelve months. The billing rights statement shall disclose that the rights and obligations of the customer and the billing entity, set forth therein, are provided under the federal Telephone Disclosure and Dispute Resolution Act. The statement shall describe the procedure that the customer must follow to notify the billing entity of a billing error and the steps that the billing entity must take in response to the customer's notice. If the customer is permitted to provide oral notice of a billing error, the statement shall disclose that a customer who orally communicates an allegation of a billing error is presumed to have provided sufficient notice to initiate a billing review. The statement shall also disclose the customer's right to withhold payment of any disputed amount, and that any action to collect any disputed amount will be suspended, pending completion of the billing review. The statement shall further disclose the customer's rights and obligations if the billing entity determines that no billing error occurred, including what action the billing entity may take if the customer continues to withhold payment of the disputed amount. Additionally, the statement shall inform the customer of the billing entity's obligation to forfeit any disputed amount (up to $50 per transaction) if the billing entity fails to follow the billing and collection procedures prescribed by §308.7 of this rule.
(ii) A billing entity that is a common carrier may comply with §308.7(n)(1)(i) by, within 60 days after the effective date of these regulations, mailing or delivering the billing rights statement to all of its customers and, thereafter, mailing or delivering the billing rights statement at least once per calendar year, at intervals of not less than 6 months nor more than 18 months, to all of its customers.
(2) Alternative summary statement. As an alternative to §308.7(n)(1), a billing entity may mail or deliver, on or with each billing statement, a statement that sets forth the procedure that a customer must follow to notify the billing entity of a billing error. The statement shall also disclose the customer's right to withhold payment of any disputed amount, and that any action to collect any disputed amount will be suspended, pending completion of the billing review.
(3) General disclosure requirements.
(i) The disclosures required by §308.7(n)(1) shall be made clearly and conspicuously on a separate statement that the customer may keep.
(ii) The disclosures required by §308.7(n)(2) shall be made clearly and conspicuously and may be made on a separate statement or on the customer's billing statement. If any of the disclosures are provided on the back of the billing statement, the billing entity shall include a reference to those disclosures on the front of the statement.
(iii) At the billing entity's option, additional information or explanations may be supplied with the disclosures required by §308.7(n), but none shall be stated, utilized, or placed so as to mislead or confuse the customer or contradict, obscure, or detract attention from the information required to be disclosed. The disclosures required by §308.7(n) shall appear separately and above any other disclosures.
(o) Multiple billing entities. If a telephone-billed purchase involves more than one billing entity, only one set of disclosures need by given, and the billing entities shall agree among themselves which billing entity must comply with the requirements that this regulation imposes on any or all of them. The billing entity designated to receive and respond to billing errors shall remain the only billing entity responsible for complying with the terms of §308.7(d). If a billing entity other than the one designated to receive and respond to billing errors receives notice of a billing error as described in §308.7(b), that billing entity shall either: (1) Promptly transmit to the customer the name, mailing address, and business telephone number of the billing entity designated to receive and respond to billing errors; or (2) transmit the billing error notice within fifteen (15) days to the billing entity designated to receive and respond to billing errors. The time requirements in §308.7(d) shall not begin to run until the billing entity designated to receive and respond to billing errors receives notice of the billing error, either from the customer or from the billing entity to whom the customer transmitted the notice.
(p) Multiple customers. If there is more than one customer involved in a telephone-billed purchase, the disclosures may be made to any customer who is primarily liable on the account.
§308.8 Severability.
The provisions of this rule are separate and severable from one another. If any provision is stayed or determined to be invalid, it is the Commission's intention that the remaining provisions shall continue in effect.
§308.9 Rulemaking review.
No later than four years after the effective date of this Rule, the Commission shall initiate a rulemaking review proceeding to evaluate the operation of the rule.
III. FEDERAL COMMUNICATIONS COMMISSION STATUTE
TITLE 47--Telegraphs, Telephones, And Radiotelegraphs
Chapter 5--Wire Or Radio Communication
Subchapter II--Common Carriers
Sec. 228. Regulation of carrier offering of pay-per-call services
(a) Purpose
It is the purpose of this section--
(1) to put into effect a system of national regulation and review that will oversee interstate pay-per-call services; and
(2) to recognize the Commission's authority to prescribe regulations and enforcement procedures and conduct oversight to afford reasonable protection to consumers of pay-per-call services and to assure that violations of Federal law do not occur.
(b) General authority for regulations
The Commission by regulation shall, within 270 days after October 28, 1992, establish a system for oversight and regulation of pay-per-call services in order to provide for the protection of consumers in accordance with this chapter and other applicable Federal statutes and regulations. The Commission's final rules shall--
(1) include measures that provide a consumer of pay-per-call services with adequate and clear descriptions of the rights of the caller;
(2) define the obligations of common carriers with respect to the provision of pay-per-call services;
(3) include requirements on such carriers to protect against abusive practices by providers of pay-per-call services;
(4) identify procedures by which common carriers and providers of pay-per-call services may take affirmative steps to protect against nonpayment of legitimate charges; and
(5) require that any service described in subparagraphs (A) and B) of subsection (i)(1) of this section be offered only through the use of certain telephone number prefixes and area codes.
(c) Common carrier obligations
Within 270 days after October 28, 1992, the Commission shall, by regulation, establish the following requirements for common carriers:
(1) Contractual obligations to comply
Any common carrier assigning to a provider of pay-per-call services a telephone number with a prefix or area code designated by the Commission in accordance with subsection (b)(5) of this section shall require by contract or tariff that such provider comply with the provisions of titles II and III of the Telephone Disclosure and Dispute Resolution Act [15 U.S.C. 5711 et seq.; 5721 et seq.] and the regulations prescribed by the Federal Trade Commission pursuant to those titles.
(2) Information availability
A common carrier that by tariff or contract assigns a telephone number with a prefix or area code designated by the Commission in accordance with subsection (b)(5) of this section to a provider of a pay-per-call service shall make readily available on request to Federal and State agencies and other interested persons--
(A) a list of the telephone numbers for each of the pay-per-call services it carries;
(B) a short description of each such service;
(C) a statement of the total cost or the cost per minute and any other fees for each such service;
(D) a statement of the pay-per-call service's name, business address, and business telephone; and
(E) such other information as the Commission considers necessary for the enforcement of this section and other applicable Federal statutes and regulations.
(3) Compliance procedures
A common carrier that by contract or tariff assigns a telephone number with a prefix or area code designated by the Commission in accordance with subsection (b)(5) of this section to a provider of pay-per-call services shall terminate, in accordance with procedures specified in such regulations, the offering of a pay-per-call service of a provider if the carrier knows or reasonably should know that such service is not provided in compliance with title II or III of the Telephone Disclosure and Dispute Resolution Act [15 U.S.C. 5711 et seq.; 5721 et seq.] or the regulations prescribed by the Federal Trade Commission pursuant to such titles.
(4) Subscriber disconnection prohibited
A common carrier shall not disconnect or interrupt a subscriber's local exchange telephone service or long distance telephone service because of nonpayment of charges for any pay-per-call service.
(5) Blocking and presubscription
A common carrier that provides local exchange service shall--
(A) offer telephone subscribers (where technically feasible) the option of blocking access from their telephone number to all, or to certain specific, prefixes or area codes used by pay-per-call services, which option--
(i) shall be offered at no charge (I) to all subscribers for a period of 60 days after the issuance of the regulations under subsection (b) of this section, and (II) to any subscriber who subscribes to a new telephone number until 60 days after the time the new telephone number is effective; and
(ii) shall otherwise be offered at a reasonable fee; and
(B) offer telephone subscribers (where the Commission determines it is technically and economically feasible), in combination with the blocking option described under subparagraph (A), the option of presubscribing to or blocking only specific pay-per-call services for a reasonable one-time charge.
The regulations prescribed under subparagraph (A)(i) of this paragraph may permit the costs of such blocking to be recovered by contract or tariff, but such costs may not be recovered from local or long-distance ratepayers. Nothing in this subsection precludes a common carrier from filing its rates and regulations regarding blocking and presubscription in its interstate tariffs.
(6) Verification of charitable status
A common carrier that assigns by contract or tariff a telephone number with a prefix or area code designated by the Commission in accordance with subsection (b)(5) of this section to a provider of pay-per-call services that the carrier knows or reasonably should know is engaged in soliciting charitable contributions shall obtain from such provider proof of the tax exempt status of any person or organization for which contributions are solicited.
(7) Billing for 800 calls
A common carrier shall prohibit by tariff or contract the use of any 800 telephone number, or other telephone number advertised or widely understood to be toll free, in a manner that would result in--
(A) the calling party being assessed, by virtue of completing the call, a charge for the call;
(B) the calling party being connected to a pay-per-call service;
(C) the calling party being charged for information conveyed during the call unless--
(i) the calling party has a written agreement (including an agreement transmitted through electronic medium) that meets the requirements of paragraph (8); or
(ii) the calling party is charged for the information in accordance with paragraph (9);
(D) the calling party being called back collect for the provision of audio information services or simultaneous voice conversation services; or
(E) the calling party being assessed, by virtue of being asked to connect or otherwise transfer to a pay-per-call service, a charge for the call.
(8) Subscription agreements for billing for information provided via toll-free calls
(A) In general
For purposes of paragraph (7)(C)(i), a written subscription does not meet the requirements of this paragraph unless the agreement specifies the material terms and conditions under which the information is offered and includes--
(i) the rate at which charges are assessed for the information;
(ii) the information provider's name;
(iii) the information provider's business address;
(iv) the information provider's regular business telephone number;
(v) the information provider's agreement to notify the subscriber at least one billing cycle in advance of all future changes in the rates charged for the information; and
(vi) the subscriber's choice of payment method, which may be by direct remit, debit, prepaid account, phone bill, credit or calling card.
(B) Billing arrangements
If a subscriber elects, pursuant to subparagraph (A)(vi), to pay by means of a phone bill—
(i) the agreement shall clearly explain that the subscriber will be assessed for calls made to the information service from the subscriber's phone line;
(ii) the phone bill shall include, in prominent type, following disclaimer:
``Common carriers may not disconnect local or long distance telephone service for failure to pay disputed charges for information services.''
; and
(iii) the phone bill shall clearly list the 800 number dialed.
(C) Use of PINs to prevent unauthorized use
A written agreement does not meet the requirements of this paragraph unless it--
(i) includes a unique personal identification number or other subscriber-specific identifier and requires a subscriber to use this number or identifier to obtain access to the information provided and includes instructions on its use; and
(ii) assures that any charges for services accessed by use of the subscriber's personal identification number or subscriber-specific identifier be assessed to subscriber's source of payment elected pursuant to subparagraph (A)(vi).
(D) Exceptions
Notwithstanding paragraph (7)(C), a written agreement that meets the requirements of this paragraph is not required--
(i) for calls utilizing telecommunications devices for the deaf;
(ii) for directory services provided by a common carrier or its affiliate or by a local exchange carrier or its affiliate; or
(iii) for any purchase of goods or of services that are not information services.
(E) Termination of service
On receipt by a common carrier of a complaint by any person that an information provider is in violation of the provisions of this section, a carrier shall--
(i) promptly investigate the complaint; and
(ii) if the carrier reasonably determines that the complaint is valid, it may terminate the provision of service to an information provider unless the provider supplies evidence of a written agreement that meets the requirements of this section.
(F) Treatment of remedies
The remedies provided in this paragraph are in addition to any other remedies that are available under subchapter V of this chapter.
(9) Charges by credit, prepaid, debit, charge, or calling card in absence of agreement
For purposes of paragraph (7)(C)(ii), a calling party is not charged in accordance with this paragraph unless the calling party is charged by means of a credit, prepaid, debit, charge, or calling card and the information service provider includes in response to each call an introductory disclosure message that--
(A) clearly states that there is a charge for the call;
(B) clearly states the service's total cost per minute and any other fees for the service or for any service to which the caller may be transferred;
(C) explains that the charges must be billed on either a credit, prepaid, debit, charge, or calling card;
(D) asks the caller for the card number;
(E) clearly states that charges for the call begin at the end of the introductory message; and
(F) clearly states that the caller can hang up at or before the end of the introductory message without incurring any charge whatsoever.
(10) Bypass of introductory disclosure message
The requirements of paragraph (9) shall not apply to calls from repeat callers using a bypass mechanism to avoid listening to the introductory message: Provided, That information providers shall disable such a bypass mechanism after the institution of any price increase and for a period of time determined to be sufficient by the Federal Trade Commission to give callers adequate and sufficient notice of a price increase.
(11) ``Calling card'' defined
As used in this subsection, the term ``calling card'' means an identifying number or code unique to the individual, that is issued to the individual by a common carrier and enables the individual to be charged by means of a phone bill for charges incurred independent of where the call originates.
(d) Billing and collection practices
The regulations required by this section shall require that any common carrier that by tariff or contract assigns a telephone number with a prefix or area code designated by the Commission in accordance with subsection (b)(5) of this section to a provider of a pay-per-call service and that offers billing and collection services to such provider--
(1) ensure that a subscriber is not billed--
(A) for pay-per-call services that such carrier knows or reasonably should know was provided in violation of the regulations issued pursuant to title II of the Telephone Disclosure and Dispute Resolution Act [15 U.S.C. 5711 et seq.]; or
(B) under such other circumstances as the Commission determines necessary in order to protect subscribers from abusive practices;
(2) establish a local or a toll-free telephone number to answer questions and provide information on subscribers' rights and obligations with regard to their use of pay-per-call services and to provide to callers the name and mailing address of any provider of pay-per-call services offered by the common carrier;
(3) within 60 days after the issuance of final regulations pursuant to subsection (b) of this section, provide, either directly or through contract with any local exchange carrier that provides billing or collection services to the common carrier, to all of such common carrier's telephone subscribers, to all new subscribers, and to all subscribers requesting service at a new location, a disclosure statement that sets forth all rights and obligations of the subscriber and the carrier with respect to the use and payment for pay-per-call services, including the right of a subscriber not to be billed and the applicable blocking option; and
(4) in any billing to telephone subscribers that includes charges for any pay-per-call service--
(A) display any charges for pay-per-call services in a part of the subscriber's bill that is identified as not being related to local and long distance telephone charges;
(B) for each charge so displayed, specify, at a minimum, the type of service, the amount of the charge, and the date, time, duration of the call; and
(C) identify the toll-free number established pursuant to paragraph (2).
(e) Liability
(1) Common carriers not liable for transmission or billing
No common carrier shall be liable for a criminal or civil sanction or penalty solely because the carrier provided transmission or billing and collection for a pay-per-call service unless the carrier knew or reasonably should have known that such service was provided in violation of a provision of, or regulation prescribed pursuant to, title II or III of the Telephone Disclosure and Dispute Resolution Act [15 U.S.C. 5711 et seq.; 5721 et seq.] or any other Federal law. This paragraph shall not prevent the Commission from imposing a sanction or penalty on a common carrier for a violation by that carrier of a regulation prescribed under this section.
(2) Civil liability
No cause of action may be brought in any court or administrative agency against any common carrier or any of its affiliates on account of any act of the carrier or affiliate to terminate any pay-per-call service in order to comply with the regulations prescribed under this section, title II or III of the Telephone Disclosure and Dispute Resolution Act [15 U.S.C. 5711 et seq.; 5721 et seq.], or any other Federal law unless the complainant demonstrates that the carrier or affiliate did not act in good faith.
(f) Special provisions
(1) Consumer refund requirements
The regulations required by subsection (d) of this section shall establish procedures, consistent with the provisions of titles II and III of the Telephone Disclosure and Dispute Resolution Act [15 U.S.C. 5711 et seq.; 5721 et seq.], to ensure that carriers and other parties providing billing and collection services with respect to pay-per-call services provide appropriate refunds to subscribers who have been billed for pay-per-call services pursuant to programs that have been found to have violated this section or such regulations, any provision of, or regulations prescribed pursuant to, title II or III of the Telephone Disclosure and Dispute Resolution Act, or any other Federal law.
(2) Recovery of costs
The regulations prescribed by the Commission under this section shall permit a common carrier to recover its cost of complying with such regulations from providers of pay-per-call services, but shall not permit such costs to be recovered from local or long distance ratepayers.
(3) Recommendations on data pay-per-call
The Commission, within one year after October 28, 1992, shall submit to the Congress the Commission's recommendations with respect to the extension of regulations under this section to persons that provide, for a per-call charge, data services that are not pay-per-call services.
(g) Effect on other law
(1) No preemption of election law
Nothing in this section shall relieve any provider of pay-per-call services, common carrier, local exchange carrier, or any other person from the obligation to comply with Federal, State, and local election statutes and regulations.
(2) Consumer protection laws
Nothing in this section shall relieve any provider of pay-per-call services, common carrier, local exchange carrier, or any other person from the obligation to comply with any Federal, State, or local statute or regulation relating to consumer protection or unfair trade.
(3) Gambling laws
Nothing in this section shall preclude any State from enforcing its statutes and regulations with regard to lotteries, wagering, betting, and other gambling activities.
(4) State authority
Nothing in this section shall preclude any State from enacting and enforcing additional and complementary oversight and regulatory systems or procedures, or both, so long as such systems and procedures govern intrastate services and do not significantly impede the enforcement of this section or other Federal statutes.
(5) Enforcement of existing regulations
Nothing in this section shall be construed to prohibit the Commission from enforcing regulations prescribed prior to October 28, 1992, in fulfilling the requirements of this section to the extent that such regulations are consistent with the provisions of this section.
(h) Effect on dial-a-porn prohibitions
Nothing in this section shall affect the provisions of section 223 of this title.
(i) ``Pay-per-call services'' defined
For purposes of this section--
(1) The term ``pay-per-call services'' means any service--
(A) in which any person provides or purports to provide--
(i) audio information or audio entertainment produced or packaged by such person;
(ii) access to simultaneous voice conversation services; or
(iii) any service, including the provision of a product, charges for which are assessed on the basis of the completion of the call;
(B) for which the caller pays a per-call or per-time-interval charge that is greater than, or in addition to, the charge for transmission of the call; and
(C) which is accessed through use of a 900 telephone number or other prefix or area code designated by the Commission in accordance with subsection (b)(5) of this section.
(2) Such term does not include directory services provided by a common carrier or its affiliate or by a local exchange carrier or its affiliate, or any service for which users are assessed charges only after entering into a presubscription or comparable arrangement with the provider of such service.
IV. FEDERAL COMMUNICATIONS COMMISSION REGULATIONS
47 CFR PART 64 -- Miscellaneous Rules Relating to Common Carriers
Subpart O -- Interstate Pay-Per-Call and Other Information Services
Section 64.1501 Definitions.
Section 64.1502 Limitations on the provision of pay-per-call services.
Section 64.1503 Termination of pay-per-call and other information programs.
Section 64.1504 Restrictions on the use of toll-free numbers.
Section 64.1505 Restrictions on collect telephone calls.
Section 64.1506 Number designation.
Section 64.1507 Prohibition on disconnection or interruption of service for failure to remit pay-per-call and similar service charges.
Section 64.1508 Blocking access to 900 service.
Section 64.1509 Disclosure and dissemination of pay-per-call information.
Section 64.1510 Billing and collection of pay-per-call and similar service charges.
Section 64.1511 Forgiveness of charges and refunds.
Section 64.1512 Involuntary blocking of pay-per-call services.
Section 64.1513 Verification of charitable status.
Section 64.1514 Generation of signalling tones.
Section 64.1515 Recovery of costs.
§64.1501 Definitions.
For purposes of this subpart, the following definitions shall apply:
(a) Pay-per-call service means any service:
(1) In which any person provides or purports to provide:
(i) Audio information or audio entertainment produced or packaged by such person;
(ii) Access to simultaneous voice conversation services; or
(iii) Any service, including the provision of a product, the charges for which are assessed on the basis of the completion of the call;
(2) For which the caller pays a per-call or per-time-interval charge that is greater than, or in addition to, the charge for transmission of the call; and
(3) Which is accessed through use of a 900 number;
(4) Provided, however, such term does not include directory services provided by a common carrier or its affiliate or by a local exchange carrier or its affiliate, or any service for which users are assessed charges only after entering into a presubscription or comparable arrangement with the provider of such service.
(b) Presubscription or comparable arrangement means a contractual agreement in which:
(1) The service provider clearly and conspicuously discloses to the consumer all material terms and conditions associated with the use of the service, including the service provider's name and address, a business telephone number which the consumer may use to obtain additional information or to register a complaint, and the rates for the service;
(2) The service provider agrees to notify the consumer of any future rate changes;
(3) The consumer agrees to use the service on the terms and conditions disclosed by the service provider; and
(4) The service provider requires the use of an identification number or other means to prevent unauthorized access to the service by nonsubscribers;
(5) Provided, however, that disclosure of a credit, prepaid account, debit, charge, or calling card number, along with authorization to bill that number, made during the course of a call to an information service shall constitute a presubscription or comparable arrangement if an introductory message containing the information specified in §64.1504(c)(2) is provided prior to, and independent of, assessment of any charges. No other action taken by a consumer during the course of a call to an information service, for which charges are assessed, can create a presubscription or comparable arrangement.
(6) Provided, that a presubscription arrangement to obtain information services provided by means of a toll-free number shall conform to the requirements of §64.1504(c).
(c) Calling card means an identifying number or code unique to the individual, that is issued to the individual by a common carrier and enables the individual to be charged by means of a phone bill for charges incurred independent of where the call originates.
§64.1502 Limitations on the provision of pay-per-call services.
Any common carrier assigning a telephone number to a provider of interstate pay-per-call service shall require, by contract or tariff, that such provider comply with the provisions of this subpart and of titles II and III of the Telephone Disclosure and Dispute Resolution Act (Pub. L. No. 102-556) (TDDRA) and the regulations prescribed by the Federal Trade Commission pursuant to those titles.
§64.1503 Termination of pay-per-call and other information programs.
(a) Any common carrier assigning a telephone number to a provider of interstate pay-per-call service shall specify by contract or tariff that pay-per-call programs not in compliance with §64.1502 shall be terminated following written notice to the information provider. The information provider shall be afforded a period of no less than seven and no more than 14 days during which a program may be brought into compliance. Programs not in compliance at the expiration of such period shall be terminated immediately.
(b) Any common carrier providing transmission or billing and collection services to a provider of interstate information service through any 800 telephone number, or other telephone number advertised or widely understood to be toll-free, shall promptly investigate any complaint that such service is not provided in accordance with §64.1504 or §64.1510(c), and, if the carrier reasonably determines that the complaint is valid, may terminate the provision of service to an information provider unless the provider supplies evidence of a written agreement that meets the requirements of this §64.1504(c)(1).
§64.1504 Restrictions on the use of toll-free numbers.
A common carrier shall prohibit by tariff or contract the use of any 800 telephone number, or other telephone number advertised or widely understood to be toll-free, in a manner that would result in:
(a) The calling party or the subscriber to the originating line being assessed, by virtue of completing the call, a charge for a call;
(b) The calling party being connected to a pay-per-call service;
(c) The calling party being charged for information conveyed during the call unless:
(1) The calling party has a written agreement (including an agreement transmitted through electronic medium) that specifies the material terms and conditions under which the information is offered and includes:
(i) The rate at which charges are assessed for the information;
(ii) The information provider's name;
(iii) The information provider's business address;
(iv) The information provider's regular business telephone number;
(v) The information provider's agreement to notify the subscriber at least one billing cycle in advance of all future changes in the rates charged for the information;
(vi) The subscriber's choice of payment method, which may be by direct remit, debit, prepaid account, phone bill, or credit or calling card and, if a subscriber elects to pay by means of phone bill, a clear explanation that the subscriber will be assessed for calls made to the information service from the subscriber's phone line;
(vii) A unique personal identification number or other subscriber-specific identifier that must be used to obtain access to the information service and instructions on its use, and, in addition, assures that any charges for services accessed by use of the subscriber's personal identification number or subscriber-specific identifier be assessed to subscriber's source of payment elected pursuant to paragraph (c)(1)(vi) of this section; or
(2) The calling party is charged for the information by means of a credit, prepaid, debit, charge, or calling card and the information service provider includes in response to each call an introductory message that:
(i) Clearly states that there is a charge for the call;
(ii) Clearly states the service's total cost per minute and any other fees for the service or for any service to which the caller may be transferred;
(iii) Explains that the charges must be billed on either a credit, prepaid, debit, charge, or calling card;
(iv) Asks the caller for the card number;
(v) Clearly states that charges for the call begin at the end of the introductory message; and
(vi) Clearly states that the caller can hang at or before the end of the introductory message without incurring any charge whatsoever.
(d) The calling party being called back collect for the provision of audio or data information services, simultaneous voice conversation services, or products; and
(e) The calling party being assessed by virtue of the caller being asked to connect or otherwise transfer to a pay-per-call service, a charge for the call.
(f) Provided, however, that:
(1) Notwithstanding paragraph (c)(1) of this section, a written agreement that meets the requirements of that paragraph is not required for:
(i) Calls utilizing telecommunications devices for the deaf;
(ii) Directory services provided by a common carrier or its affiliate or by a local exchange carrier or its affiliate; or
(iii) Any purchase of goods or of services that are not information services.
(2) The requirements of paragraph (c)(2) of this section shall not apply to calls from repeat callers using a bypass mechanism to avoid listening to the introductory message: Provided, That information providers shall disable such a bypass mechanism after the institution of any price increase for a period of time determined to be sufficient by the Federal Trade Commission to give callers adequate and sufficient notice of a price increase.
§64.1505 Restrictions on collect telephone calls.
(a) No common carrier shall provide interstate transmission or billing and collection services to an entity offering any service within the scope of §64.1501(a)(1) that is billed to a subscriber on a collect basis at a per-call or per-time-interval charge that is greater than, or in addition to, the charge for transmission of the call.
(b) No common carrier shall provide interstate transmission services for any collect information services billed to a subscriber at a tariffed rate unless the called party has taken affirmative action clearly indicating that it accepts the charges for the collect service.
§64.1506 Number designation.
Any interstate service described in §64.1501(a)(1)-(2), and not subject to the exclusions contained in §64.1501(a)(4), shall be offered only through telephone numbers beginning with a 900 service access code.
§64.1507 Prohibition on disconnection or interruption of service for failure to remit pay-per-call and similar service charges.
No common carrier shall disconnect or interrupt in any manner, or order the disconnection or interruption of, a telephone subscriber's local exchange or long distance telephone service as a result of that subscriber's failure to pay:
(a) Charges for interstate pay-per-call service;
(b) Charges for interstate information services provided pursuant to a presubscription or comparable arrangement; or
(c) Charges for interstate information services provided on a collect basis which have been disputed by the subscriber.
§64.1508 Blocking access to 900 service.
(a) Local exchange carriers must offer to their subscribers, where technically feasible, an option to block access to services offered on the 900 service access code. Blocking is to be offered at no charge, on a one-time basis, to:
(1) All telephone subscribers during the period from November 1, 1993 through December 31, 1993; and
(2) Any subscriber who subscribes to a new telephone number for a period of 60 days after the new number is effective.
(b) For blocking requests not within the one-time option or outside the time frames specified in paragraph (a) of this section, and for unblocking requests, local exchange carriers may charge a reasonable one-time fee. Requests by subscribers to remove 900 services blocking must be in writing.
(c) The terms and conditions under which subscribers may obtain 900 services blocking are to be included in tariffs filed with this Commission.
§64.1509 Disclosure and dissemination of pay-per-call information.
(a) Any common carrier assigning a telephone number to a provider of interstate pay-per-call services shall make readily available, at no charge, to Federal and State agencies and all other interested persons:
(1) A list of the telephone numbers for each of the pay-per-call services it carries;
(2) A short description of each such service;
(3) A statement of the total cost or the cost per minute and any other fees for each such service; and
(4) A statement of the pay-per-call service provider's name, business address, and business telephone number.
(b) Any common carrier assigning a telephone number to a provider of interstate pay-per-call services and offering billing and collection services to such provider shall:
(1) Establish a local or toll-free telephone number to answer questions and provide information on subscribers' rights and obligations with regard to their use of pay-per-call services and to provide to callers the name and mailing address of any provider of pay-per-call services offered by that carrier; and
(2) Provide to all its telephone subscribers, either directly or through contract with any local exchange carrier providing billing and collection services to that carrier, a disclosure statement setting forth all rights and obligations of the subscriber and the carrier with respect to the use and payment of pay-per-call services. Such statement must include the prohibition against disconnection of basic communications services for failure to pay pay-per-call charges established by §64.1507, the right of a subscriber to obtain blocking in accordance with §64.1508, the right of a subscriber not to be billed for pay-per-call services not offered in compliance with federal laws and regulations established by §64.1510(a)(1), and the possibility that a subscriber's access to 900 services may be involuntarily blocked pursuant to §64.1512 for failure to pay legitimate pay-per-call charges. Disclosure statements must be forwarded to:
(i) All telephone subscribers no later than 60 days after these regulations take effect;
(ii) All new telephone subscribers no later than 60 days after service is established;
(iii) All telephone subscribers requesting service at a new location no later than 60 days after service is established; and
(iv) Thereafter, to all subscribers at least once per calendar year, at intervals of not less than 6 months nor more than 18 months.
§64.1510 Billing and collection of pay-per-call and similar service charges.
(a) Any common carrier assigning a telephone number to a provider of interstate pay-per-call services and offering billing and collection services to such provider shall:
(1) Ensure that a subscriber is not billed for interstate pay-per-call services that such carrier knows or reasonably should know were provided in violation of the regulations set forth in this subpart or prescribed by the Federal Trade Commission pursuant to titles II or III of the TDDRA or any other federal law;
(2) In any billing to telephone subscribers that includes charges for any interstate pay-per-call service:
(i) Include a statement indicating that:
(A) Such charges are for non-communications services;
(B) Neither local nor long distances services can be disconnected for non-payment although an information provider may employ private entities to seek to collect such charges;
(C) 900 number blocking is available upon request; and
(D) Access to pay-per-call services may be involuntarily blocked for failure to pay legitimate charges;
(ii) Display any charges for pay-per-call services in a part of the bill that is identified as not being related to local and long distance telephone charges;
(iii) Specify, for each pay-per-call charge made, the type of service, the amount of the charge, and the date, time, and, for calls billed on a time-sensitive basis, the duration of the call; and
(iv) Identify the local or toll-free number established in accordance with §64.1509(b)(1).
(b) Any common carrier offering billing and collection services to an entity providing interstate information services on a collect basis shall, to the extent possible, display the billing information in the manner described in paragraphs (a)(2)(i), (A), (B), (D) and (a)(2)(ii) of this section.
(c) If a subscriber elects, pursuant to §64.1504(c)(1)(vi), to pay by means of a phone bill for any information service provided by through any 800 telephone number, or other telephone number advertised or widely understood to be toll-free, the phone bill shall:
(1) Include, in prominent type, the following disclaimer: "Common carriers may not disconnect local or long distance telephone service for failure to pay disputed charges for information services;" and
(2) Clearly list the 800 or other toll-free number dialed.
§64.1511 Forgiveness of charges and refunds.
(a) Any carrier assigning a telephone number to a provider of interstate pay-per-call services or providing transmission for interstate information services provided pursuant to a presubscription or comparable arrangement or on a collect basis, and providing billing and collection for such services, shall establish procedures for the handling of subscriber complaints regarding charges for those services. A billing carrier is afforded discretion to set standards for determining when a subscriber's complaint warrants forgiveness, refund or credit of interstate pay-per-call or information services charges provided that such charges must be forgiven, refunded, or credited when a subscriber has complained about such charges and either this Commission, the Federal Trade Commission, or a court of competent jurisdiction has found or the carrier has determined, upon investigation, that the service has been offered in violation of federal law or the regulations that are either set forth in this subpart or prescribed by the Federal Trade Commission pursuant to titles II or III of the TDDRA. Carriers shall observe the record retention requirements set forth in §42.6 of this chapter except that relevant records shall be retained by carriers beyond the requirements of part 42 of this chapter when a complaint is pending at the time the specified retention period expires.
(b) Any carrier assigning a telephone number to a provider of interstate pay-per-call services but not providing billing and collection services for such services, shall, by tariff or contract, require that the provider and/or its billing and collection agents have in place procedures whereby, upon complaint, pay-per-call charges may be forgiven, refunded, or credited, provided that such charges must be forgiven, refunded, or credited when a subscriber has complained about such charges and either this Commission, the Federal Trade Commission, or a court of competent jurisdiction has found or the carrier has determined, upon investigation, that the service has been offered in violation of federal law or the regulations that are either set forth in this subpart or prescribed by the Federal Trade Commission pursuant to titles II or III of the TDDRA.
§64.1512 Involuntary blocking of pay-per-call services.
Nothing in this subpart shall preclude a common carrier or information provider from blocking or ordering the blocking of its interstate pay-per-call programs from numbers assigned to subscribers who have incurred, but not paid, legitimate pay-per-call charges, except that a subscriber who has filed a complaint regarding a particular pay-per-call program pursuant to procedures established by the Federal Trade Commission under title III of the TDDRA shall not be involuntarily blocked from access to that program while such a complaint is pending. This restriction is not intended to preclude involuntary blocking when a carrier or IP has decided in one instance to sustain charges against a subscriber but that subscriber files additional separate complaints.
§64.1513 Verification of charitable status.
Any common carrier assigning a telephone number to a provider of interstate pay-per-call services that the carrier knows or reasonably should know is engaged in soliciting charitable contributions shall obtain verification that the entity or individual for whom contributions are solicited has been granted tax exempt status by the Internal Revenue Service.
§64.1514 Generation of signalling tones.
No common carrier shall assign a telephone number for any pay-per-call service that employs broadcast advertising which generates the audible tones necessary to complete a call to a pay-per-call service.
§64.1515 Recovery of costs.
No common carrier shall recover its cost of complying with the provisions of this subpart from local or long distance ratepayers.
V. Federal Communications Commission Regulations Restricting the Use of Automatic Number Identification (“ANI”)
47 C.F.R. Part 64 Miscellaneous Rules Relating to Common Carriers
Subpart P – Calling Party Telephone Number; Privacy
Sec. 64.1602 Restrictions on use and sale of telephone subscriber information provided pursuant to automatic number identification or charge number services.
(a) Any common carrier providing Automatic Number Identification or charge number services on interstate calls to any person shall provide such services under a contract or tariff containing telephone subscriber information requirements that comply with this subpart. Such requirements shall:
(1) Permit such person to use the telephone number and billing information for billing and collection, routing, screening, and
completion of the originating telephone subscriber's call or transaction, or for services directly related to the originating telephone subscriber's call or transaction;
(2) Prohibit such person from reusing or selling the telephone number or billing information without first
(i) Notifying the originating telephone subscriber and,
(ii) Obtaining the affirmative consent of such subscriber for such reuse or sale; and,
(3) Prohibit such person from disclosing, except as permitted by paragraphs (a) (1) and (2) of this section, any information derived from the automatic number identification or charge number service for any purpose other than
(i) Performing the services or transactions that are the subject of the originating telephone subscriber's call,
(ii) Ensuring network performance security, and the effectiveness of call delivery,
(iii) Compiling, using, and disclosing aggregate information, and
(iv) Complying with applicable law or legal process.
(b) The requirements imposed under paragraph (a) of the section
shall not prevent a person to whom automatic number identification or
charge number services are provided from using
(1) The telephone number and billing information provided pursuant to such service, and
(2) Any information derived from the automatic number identification or charge number service, or from the analysis of the characteristics of a telecommunications transmission, to offer a product or service that is directly related to the products or services previously acquired by that customer from such person. Use of such information is subject to the requirements of 47 CFR 64.1200 and 64.1504(c).
VI. Adult Advertising
Sec. 2257. - Record keeping requirements
(a) Whoever produces any book, magazine, periodical, film, videotape, or other matter which -
(1) contains one or more visual depictions made after November 1, 1990 of actual sexually explicit conduct; and
(2) is produced in whole or in part with materials which have been mailed or shipped in interstate or foreign commerce, or is shipped or transported or is intended for shipment or transportation in interstate or foreign commerce;
shall create and maintain individually identifiable records pertaining to every performer portrayed in such a visual depiction.
(b) Any person to whom subsection (a) applies shall, with respect to every performer portrayed in a visual depiction of actual sexually explicit conduct -
(1) ascertain, by examination of an identification document containing such information, the performer's name and date of birth, and require the performer to provide such other indicia of his or her identity as may be prescribed by regulations;
(2) ascertain any name, other than the performer's present and correct name, ever used by the performer including maiden name, alias, nickname, stage, or professional name; and
(3) record in the records required by subsection (a) the information required by paragraphs (1) and (2) of this subsection and such other identifying information as may be prescribed by regulation.
(c) Any person to whom subsection (a) applies shall maintain the records required by this section at his business premises, or at such other place as the Attorney General may by regulation prescribe and shall make such records available to the Attorney General for inspection at all reasonable times.
(d) (1) No information or evidence obtained from records required to be created or maintained by this section shall, except as provided in this section, directly or indirectly, be used as evidence against any person with respect to any violation of law.
(2) Paragraph (1) of this subsection shall not preclude the use of such information or evidence in a prosecution or other action for a violation of this section or for a violation of any applicable provision of law with respect to the furnishing of false information.
(e) (1) Any person to whom subsection (a) applies shall cause to be affixed to every copy of any matter described in paragraph (1) of subsection (a) of this section, in such manner and in such form as the Attorney General shall by regulations prescribe, a statement describing where the records required by this section with respect to all performers depicted in that copy of the matter may be located.
(2) If the person to whom subsection (a) of this section applies is an organization the statement required by this subsection shall include the name, title, and business address of the individual employed by such organization responsible for maintaining the records required by this section.
(f) It shall be unlawful -
(1) for any person to whom subsection (a) applies to fail to create or maintain the records as required by subsections (a) and (c) or by any regulation promulgated under this section;
(2) for any person to whom subsection (a) applies knowingly to make any false entry in or knowingly to fail to make an appropriate entry in, any record required by subsection (b) of this section or any regulation promulgated under this section;
(3) for any person to whom subsection (a) applies knowingly to fail to comply with the provisions of subsection (e) or any regulation promulgated pursuant to that subsection; and
(4) for any person knowingly to sell or otherwise transfer, or offer for sale or transfer, any book, magazine, periodical, film, video, or other matter, produce in whole or in part with materials which have been mailed or shipped in interstate or foreign commerce or which is intended for shipment in interstate or foreign commerce, which -
(A) contains one or more visual depictions made after the effective date of this subsection of actual sexually explicit conduct; and
(B) is produced in whole or in part with materials which have been mailed or shipped in interstate or foreign commerce, or is shipped or transported or is intended for shipment or transportation in interstate or foreign commerce;
which does not have affixed thereto, in a manner prescribed as set forth in subsection (e)(1), a statement describing where the records required by this section may be located, but such person shall have no duty to determine the accuracy of the contents of the statement or the records required to be kept.
(g) The Attorney General shall issue appropriate regulations to carry out this section.
(h) As used in this section -
(1) the term ''actual sexually explicit conduct'' means actual but not simulated conduct as defined in subparagraphs (A) through (D) of paragraph (2) of section 2256 of this title;
(2) ''identification document'' has the meaning given that term in section 1028(d) of this title;
(3) the term ''produces'' means to produce, manufacture, or publish any book, magazine, periodical, film, video tape or other similar matter and includes the duplication, reproduction, or reissuing of any such matter, but does not include mere distribution or any other activity which does not involve hiring, contracting for managing, or otherwise arranging for the participation of the performers depicted; and
(4) the term ''performer'' includes any person portrayed in a visual depiction engaging in, or assisting another person to engage in, actual sexually explicit conduct.
(i) Whoever violates this section shall be imprisoned for not more than 2 years, and fined in accordance with the provisions of this title, or both. Whoever violates this section after having been convicted of a violation punishable under this section shall be imprisoned for any period of years not more than 5 years but not less than 2 years, and fined in accordance with the provisions of this title, or both
VII. FEDERAL COMMUNICATIONS COMMISSION STATUTE ON INDECENT PHONE CALLS
Title 47 - Telegraphs, Telephones, And Radiotelegraphs
47 USC Section 223. Obscene or harassing telephone calls in the District of Columbia or in interstate or foreign communications.
(a) Prohibited acts generally.
(b) Prohibited acts for commercial purposes; defense to prosecution.
(c) Restriction on access to subscribers by common carriers; judicial remedies respecting restrictions.
(d) Sending or displaying offensive material to persons under 18.
(e) Defenses.
(f) Violations of law required; commercial entities, nonprofit libraries, or institutions of higher education.
(g) Application and enforcement of other Federal law.
(h) Definitions.
Sec. 223. Obscene or harassing telephone calls in the District of Columbia or in interstate or foreign communications
(a) Prohibited acts generally
Whoever -
(1) in interstate or foreign communications –
(A) by means of a telecommunications device knowingly -
(i) makes, creates, or solicits, and
(ii) initiates the transmission of, any comment, request, suggestion, proposal, image, or other communication which is obscene, lewd, lascivious, filthy, or indecent, with intent to annoy, abuse, threaten, or harass another person;
(B) by means of a telecommunications device knowingly –
(i) makes, creates, or solicits, and
(ii) initiates the transmission of, any comment, request, suggestion, proposal, image, or other communication which is obscene or indecent, knowing that the recipient of the communication is under 18 years of age, regardless of whether the maker of such communication placed the call or initiated the communication;
(C) makes a telephone call or utilizes a telecommunications device, whether or not conversation or communication ensues, without disclosing his identity and with intent to annoy, abuse, threaten, or harass any person at the called number or who receives the communications;
(D) makes or causes the telephone of another repeatedly or continuously to ring, with intent to harass any person at the called number; or
(E) makes repeated telephone calls or repeatedly initiates communication with a telecommunications device, during which conversation or communication ensues, solely to harass any person at the called number or who receives the communication; or
(2) knowingly permits any telecommunications facility under his control to be used for any activity prohibited by paragraph (1) with the intent that it be used for such activity, shall be fined under title 18 or imprisoned not more than two years, or both.
(b) Prohibited acts for commercial purposes; defense to prosecution
(1) Whoever knowingly –
(A) within the United States, by means of telephone, makes (directly or by recording device) any obscene communication for commercial purposes to any person, regardless of whether the maker of such communication placed the call; or
(B) permits any telephone facility under such person's control to be used for an activity prohibited by subparagraph (A), shall be fined in accordance with title 18 or imprisoned not more than two years, or both.
(2) Whoever knowingly –
(A) within the United States, by means of telephone, makes (directly or by recording device) any indecent communication for commercial purposes which is available to any person under 18 years of age or to any other person without that person's consent, regardless of whether the maker of such communication placed the call; or
(B) permits any telephone facility under such person's control to be used for an activity prohibited by subparagraph (A), shall be fined not more than $50,000 or imprisoned not more than six months, or both.
(3) It is a defense to prosecution under paragraph (2) of this subsection that the defendant restricted access to the prohibited communication to persons 18 years of age or older in accordance with subsection (c) of this section and with such procedures as the Commission may prescribe by regulation.
(4) In addition to the penalties under paragraph (1), whoever, within the United States, intentionally violates paragraph (1) or (2) shall be subject to a fine of not more than $50,000 for each violation. For purposes of this paragraph, each day of violation shall constitute a separate violation.
(5) (A) In addition to the penalties under paragraphs (1), (2), and (5), whoever, within the United States, violates paragraph (1) or (2) shall be subject to a civil fine of not more than $50,000 for each violation. For purposes of this paragraph, each day of violation shall constitute a separate violation.
(B) A fine under this paragraph may be assessed either –
(i) by a court, pursuant to civil action by the Commission or any attorney employed by the Commission who is designated by the Commission for such purposes, or
(ii) by the Commission after appropriate administrative proceedings.
(6) The Attorney General may bring a suit in the appropriate district court of the United States to enjoin any act or practice which violates paragraph (1) or (2). An injunction may be granted in accordance with the Federal Rules of Civil Procedure.
(c) Restriction on access to subscribers by common carriers; judicial remedies respecting restrictions
(1) A common carrier within the District of Columbia or within any State, or in interstate or foreign commerce, shall not, to the extent technically feasible, provide access to a communication specified in subsection (b) of this section from the telephone of any subscriber who has not previously requested in writing the carrier to provide access to such communication if the carrier collects from subscribers an identifiable charge for such communication that the carrier remits, in whole or in part, to the provider of such communication.
(2) Except as provided in paragraph (3), no cause of action may be brought in any court or administrative agency against any common carrier, or any of its affiliates, including their officers, directors, employees, agents, or authorized representatives on account of –
(A) any action which the carrier demonstrates was taken in good faith to restrict access pursuant to paragraph (1) of this subsection; or
(B) any access permitted –
(i) in good faith reliance upon the lack of any representation by a provider of communications that communications provided by that provider are communications specified in subsection (b) of this section, or
(ii) because a specific representation by the provider did not allow the carrier, acting in good faith, a sufficient period to restrict access to restrict access to communications described in subsection (b) of this section.
(3) Notwithstanding paragraph (2) of this subsection, a provider of communications services to which subscribers are denied access pursuant to paragraph (1) of this subsection may bring an action for a declaratory judgment or similar action in a court. Any such action shall be limited to the question of whether the communications which the provider seeks to provide fall within the category of communications to which the carrier will provide access only to subscribers who have previously requested such access.
(d) Sending or displaying offensive material to persons under 18
Whoever –
(1) in interstate or foreign communications knowingly –
(A) uses an interactive computer service to send to a specific person or persons under 18 years of age, or
(B) uses any interactive computer service to display in a manner available to a person under 18 years of age, any comment, request, suggestion, proposal, image, or other communication that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards, sexual or excretory activities or organs, regardless of whether the user of such service placed the call or initiated the communication; or
(2) knowingly permits any telecommunications facility under such person's control to be used for an activity prohibited by paragraph (1) with the intent that it be used for such activity, shall be fined under title 18 or imprisoned not more than two years, or both.
(e) Defenses
In addition to any other defenses available by law:
(1) No person shall be held to have violated subsection (a) or (d) of this section solely for providing access or connection to or from a facility, system, or network not under that person's control, including transmission, downloading, intermediate storage, access software, or other related capabilities that are incidental to providing such access or connection that does not include the creation of the content of the communication.
(2) The defenses provided by paragraph (1) of this subsection shall not be applicable to a person who is a conspirator with an entity actively involved in the creation or knowing distribution of communications that violate this section, or who knowingly advertises the availability of such communications.
(3) The defenses provided in paragraph (1) of this subsection shall not be applicable to a person who provides access or connection to a facility, system, or network engaged in the violation of this section that is owned or controlled by such person.
(4) No employer shall be held liable under this section for the actions of an employee or agent unless the employee's or agent's conduct is within the scope of his or her employment or agency and the employer (A) having knowledge of such conduct, authorizes or ratifies such conduct, or (B) recklessly disregards such conduct.
(5) It is a defense to a prosecution under subsection (a)(1)(B) or (d) of this section, or under subsection (a)(2) of this section with respect to the use of a facility for an activity under subsection (a)(1)(B) of this section that a person –
(A) has taken, in good faith, reasonable, effective, and appropriate actions under the circumstances to restrict or prevent access by minors to a communication specified in such subsections, which may involve any appropriate measures to restrict minors from such communications, including any method which is feasible under available technology; or
(B) has restricted access to such communication by requiring use of a verified credit card, debit account, adult access code, or adult personal identification number.
(6) The Commission may describe measures which are reasonable, effective, and appropriate to restrict access to prohibited communications under subsection (d) of this section. Nothing in this section authorizes the Commission to enforce, or is intended to provide the Commission with the authority to approve, sanction, or permit, the use of such measures. The Commission shall have no enforcement authority over the failure to utilize such measures. The Commission shall not endorse specific products relating to such measures. The use of such measures shall be admitted as evidence of good faith efforts for purposes of paragraph (5) in any action arising under subsection (d) of this section. Nothing in this section shall be construed to treat interactive computer services as common carriers or telecommunications carriers.
(f) Violations of law required; commercial entities, nonprofit libraries, or institutions of higher education
(1) No cause of action may be brought in any court or administrative agency against any person on account of any activity that is not in violation of any law punishable by criminal or civil penalty, and that the person has taken in good faith to implement a defense authorized under this section or otherwise to restrict or prevent the transmission of, or access to, a communication specified in this section.
(2) No State or local government may impose any liability for commercial activities or actions by commercial entities, nonprofit libraries, or institutions of higher education in connection with an activity or action described in subsection (a)(2) or (d) of this section that is inconsistent with the treatment of those activities or actions under this section: Provided, however, That nothing herein shall preclude any State or local government from enacting and enforcing complementary oversight, liability, and regulatory systems, procedures, and requirements, so long as such systems, procedures, and requirements govern only intrastate services and do not result in the imposition of inconsistent rights, duties or obligations on the provision of interstate services. Nothing in this subsection shall preclude any State or local government from governing conduct not covered by this section.
(g) Application and enforcement of other Federal law
Nothing in subsection (a), (d), (e), or (f) of this section or in the defenses to prosecution under subsection (a) or (d) of this section shall be construed to affect or limit the application or enforcement of any other Federal law.
(h) Definitions
For purposes of this section –
(1) The use of the term ''telecommunications device'' in this section –
(A) shall not impose new obligations on broadcasting station licensees and cable operators covered by obscenity and indecency provisions elsewhere in this chapter; and
(B) does not include an interactive computer service.
(2) The term ''interactive computer service'' has the meaning provided in section 230(f)(2) of this title.
(3) The term ''access software'' means software (including client or server software) or enabling tools that do not create or provide the content of the communication but that allow a user to do any one or more of the following:
(A) filter, screen, allow, or disallow content;
(B) pick, choose, analyze, or digest content; or
(C) transmit, receive, display, forward, cache, search, subset, organize, reorganize, or translate content.
(4) The term ''institution of higher education'' has the meaning provided in section 1001 of title 20.
(5) The term ''library'' means a library eligible for participation in State-based plans for funds under title III of the Library Services and Construction Act (20 U.S.C. 355e et seq.).
VIII. OBSCENITY AND INDECENCY
18 USC Chapter 71 – Obscenity
Sec.
1460. Possession with intent to sell, and sale, of obscene matter on Federal property.
1461. Mailing obscene or crime-inciting matter.
1462. Importation or transportation of obscene matters.
1463. Mailing indecent matter on wrappers or envelopes.
1464. Broadcasting obscene language.
1465. Transportation of obscene matters for sale or distribution.
1466. Engaging in the business of selling or transferring obscene matter.
1467. Criminal forfeiture.
1468. Distributing obscene material by cable or subscription television.
1469. Presumptions.
1470. Transfer of obscene material to minors.
Sec. 1460. Possession with intent to sell, and sale, of obscene matter on Federal property
(a) Whoever, either –
(1) in the special maritime and territorial jurisdiction of the United States, or on any land or building owned by, leased to, or otherwise used by or under the control of the Government of the United States; or
(2) in the Indian country as defined in section 1151 of this title, knowingly sells or possesses with intent to sell an obscene visual depiction shall be punished by a fine in accordance with the provisions of this title or imprisoned for not more than 2 years, or both.
(b) For the purposes of this section, the term ''visual depiction'' includes undeveloped film and videotape but does not include mere words.
Sec. 1461. Mailing obscene or crime-inciting matter
Every obscene, lewd, lascivious, indecent, filthy or vile article, matter, thing, device, or substance; and -
Every article or thing designed, adapted, or intended for producing abortion, or for any indecent or immoral use; and
Every article, instrument, substance, drug, medicine, or thing which is advertised or described in a manner calculated to lead another to use or apply it for producing abortion, or for any indecent or immoral purpose; and
Every written or printed card, letter, circular, book, pamphlet, advertisement, or notice of any kind giving information, directly or indirectly, where, or how, or from whom, or by what means any of such mentioned matters, articles, or things may be obtained or made, or where or by whom any act or operation of any kind for the procuring or producing of abortion will be done or performed, or how or by what means abortion may be produced, whether sealed or unsealed; and
Every paper, writing, advertisement, or representation that any article, instrument, substance, drug, medicine, or thing may, or can, be used or applied for producing abortion, or for any indecent or immoral purpose; and
Every description calculated to induce or incite a person to so use or apply any such article, instrument, substance, drug, medicine, or thing -
Is declared to be nonmailable matter and shall not be conveyed in the mails or delivered from any post office or by any letter carrier.
Whoever knowingly uses the mails for the mailing, carriage in the mails, or delivery of anything declared by this section or section 3001(e) of title 39 to be nonmailable, or knowingly causes to be delivered by mail according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, or knowingly takes any such thing from the mails for the purpose of circulating or disposing thereof, or of aiding in the circulation or disposition thereof, shall be fined under this title or imprisoned not more than five years, or both, for the first such offense, and shall be fined under this title or imprisoned not more than ten years, or both, for each such offense thereafter.
The term ''indecent'', as used in this section includes matter of a character tending to incite arson, murder, or assassination.
Sec. 1462. Importation or transportation of obscene matters
Whoever brings into the United States, or any place subject to the jurisdiction thereof, or knowingly uses any express company or other common carrier or interactive computer service (as defined in section 230(e)(2) (FOOTNOTE 1) of the Communications Act of 1934), for carriage in interstate or foreign commerce –
(FOOTNOTE 1) See References in Text note below.
(a) any obscene, lewd, lascivious, or filthy book, pamphlet, picture, motion-picture film, paper, letter, writing, print, or other matter of indecent character; or
(b) any obscene, lewd, lascivious, or filthy phonograph recording, electrical transcription, or other article or thing capable of producing sound; or
(c) any drug, medicine, article, or thing designed, adapted, or intended for producing abortion, or for any indecent or immoral use; or any written or printed card, letter, circular, book, pamphlet, advertisement, or notice of any kind giving information, directly or indirectly, where, how, or of whom, or by what means any of such mentioned articles, matters, or things may be obtained or made; or
Whoever knowingly takes or receives, from such express company or other common carrier or interactive computer service (as defined in section 230(e)(2) (FOOTNOTE 1) of the Communications Act of 1934) any matter or thing the carriage or importation of which is herein made unlawful –
Shall be fined under this title or imprisoned not more than five years, or both, for the first such offense and shall be fined under this title or imprisoned not more than ten years, or both, for each such offense thereafter.
Sec. 1463. Mailing indecent matter on wrappers or envelopes
All matter otherwise mailable by law, upon the envelope or outside cover or wrapper of which, and all postal cards upon which, any delineations, epithets, terms, or language of an indecent, lewd, lascivious, or obscene character are written or printed or otherwise impressed or apparent, are nonmailable matter, and shall not be conveyed in the mails nor delivered from any post office nor by any letter carrier, and shall be withdrawn from the mails under such regulations as the Postal Service shall prescribe.
Whoever knowingly deposits for mailing or delivery, anything declared by this section to be nonmailable matter, or knowingly takes the same from the mails for the purpose of circulating or disposing of or aiding in the circulation or disposition of the same, shall be fined under this title or imprisoned not more than five years, or both.
Sec. 1464. Broadcasting obscene language
Whoever utters any obscene, indecent, or profane language by means of radio communication shall be fined under this title or imprisoned not more than two years, or both.
Sec. 1465. Transportation of obscene matters for sale or distribution
Whoever knowingly transports or travels in, or uses a facility or means of, interstate or foreign commerce or an interactive computer service (as defined in section 230(e)(2) (FOOTNOTE 1) of the Communications Act of 1934) in or affecting such commerce for the purpose of sale or distribution of any obscene, lewd, lascivious, or filthy book, pamphlet, picture, film, paper, letter, writing, print, silhouette, drawing, figure, image, cast, phonograph recording, electrical transcription or other article capable of producing sound or any other matter of indecent or immoral character, shall be fined under this title or imprisoned not more than five years, or both.
(FOOTNOTE 1) See References in Text note below.
The transportation as aforesaid of two or more copies of any publication or two or more of any article of the character described above, or a combined total of five such publications and articles, shall create a that such publications or articles are intended for sale or distribution, but such presumption shall be rebuttable.
Sec. 1466. Engaging in the business of selling or transferring obscene matter
(a) Whoever is engaged in the business of selling or transferring obscene matter, who knowingly receives or possesses with intent to distribute any obscene book, magazine, picture, paper, film, videotape, or phonograph or other audio recording, which has been shipped or transported in interstate or foreign commerce, shall be punished by imprisonment for not more than 5 years or by a fine under this title, or both.
(b) As used in this section, the term ''engaged in the business'' means that the person who sells or transfers or offers to sell or transfer obscene matter devotes time, attention, or labor to such activities, as a regular course of trade or business, with the objective of earning a profit, although it is not necessary that the person make a profit or that the selling or transferring or offering to sell or transfer such material be the person's sole or principal business or source of income. The offering for sale of or to transfer, at one time, two or more copies of any obscene publication, or two or more of any obscene article, or a combined total of five or more such publications and articles, shall create a rebuttable presumption that the person so offering them is ''engaged in the business'' as defined in this subsection.
Sec. 1467. Criminal forfeiture
(a) Property Subject to Criminal Forfeiture. - A person who is convicted of an offense involving obscene material under this chapter shall forfeit to the United States such person's interest in –
(1) any obscene material produced, transported, mailed, shipped, or received in violation of this chapter;
(2) any property, real or personal, constituting or traceable to gross profits or other proceeds obtained from such offense; and
(3) any property, real or personal, used or intended to be used to commit or to promote the commission of such offense, if the court in its discretion so determines, taking into consideration the nature, scope, and proportionality of the use of the property in the offense.
(b) Third Party Transfers. - All right, title, and interest in property described in subsection (a) of this section vests in the United States upon the commission of the act giving rise to forfeiture under this section. Any such property that is subsequently transferred to a person other than the defendant may be the subject of a special verdict of forfeiture and thereafter shall be ordered forfeited to the United States, unless the transferee establishes in a hearing pursuant to subsection (m) of this section that he is a bona fide purchaser for value of such property who at the time of purchase was reasonably without cause to believe that the property was subject to forfeiture under this section.
(c) Protective Orders. –
(1) Upon application of the United States, the court may enter a restraining order or injunction, require the execution of a satisfactory performance bond, or take any other action to preserve the availability of property described in subsection (a) of this section for forfeiture under this section –
(A) upon the filing of an indictment or information charging a violation of this chapter for which criminal forfeiture may be ordered under this section and alleging that the property with respect to which the order is sought would, in the event of conviction, be subject to forfeiture under this section; or
(B) prior to the filing of such an indictment or information, if, after notice to persons appearing to have an interest in the property and opportunity for a hearing, the court determines that –
(i) there is a substantial probability that the United States will prevail on the issue of forfeiture and that failure to enter the order will result in the property being destroyed, removed from the jurisdiction of the court, or otherwise made unavailable for forfeiture; and
(ii) the need to preserve the availability of the property through the entry of the requested order outweighs the hardship on any party against whom the order is to be entered; except that an order entered under subparagraph (B) shall be effective for not more than 90 days, unless extended by the court for good cause shown or unless an indictment or information described in subparagraph (A) has been filed.
(2) A temporary restraining order under this subsection may be entered upon application of the United States without notice or opportunity for a hearing when an information or indictment has not yet been filed with respect to the property, if the United States demonstrates that there is probable cause to believe that the property with respect to which the order is sought would, in the event of conviction, be subject to forfeiture under this section and that provision of notice will jeopardize the availability of the property for forfeiture. Such a temporary order shall expire not more than 10 days after the date on which it is entered, unless extended for good cause shown or unless the party against whom it is entered consents to an extension for a longer period. A hearing requested concerning an order entered under this paragraph shall be held at the earliest possible time and prior to the expiration of the temporary order.
(3) The court may receive and consider, at a hearing held pursuant to this subsection, evidence and information that would be inadmissible under the Federal Rules of Evidence.
(d) Warrant of Seizure. - The Government may request the issuance of a warrant authorizing the seizure of property subject to forfeiture under this section in the same manner as provided for a search warrant. If the court determines that there is probable cause to believe that the property to be seized would, in the event of conviction, be subject to forfeiture and that an order under subsection (c) of this section may not be sufficient to assure the availability of the property for forfeiture, the court shall issue a warrant authorizing the seizure of such property.
(e) Order of Forfeiture. - The court shall order forfeiture of property referred to in subsection (a) if –
(1) the trier of fact determines, beyond a reasonable doubt, that such property is subject to forfeiture; and
(2) with respect to property referred to in subsection (a)(3), if the court exercises the court's discretion under that subsection.
(f) Execution. - Upon entry of an order of forfeiture under this section, the court shall authorize the Attorney General to seize all property ordered forfeited upon such terms and conditions as the court shall deem proper. Following entry of an order declaring the property forfeited, the court may, upon application of the United States, enter such appropriate restraining orders or injunctions, require the execution of satisfactory performance bonds, appoint receivers, conservators, appraisers, accountants, or trustees, or take any other action to protect the interest of the United States in the property ordered forfeited. Any income accruing to or derived from property ordered forfeited under this section may be used to offset ordinary and necessary expenses to the property which are required by law, or which are necessary to protect the interests of the United States or third parties.
(g) Disposition of Property. - Following the seizure of property ordered forfeited under this section, the Attorney General shall destroy or retain for official use any property described in paragraph (1) of subsection (a) and shall direct the disposition of any property described in paragraph (2) or (3) of subsection (a) by sale or any other commercially feasible means, making due provision for the rights of any innocent persons. Any property right or interest not exercisable by, or transferable for value to, the United States shall expire and shall not revert to the defendant, nor shall the defendant or any person acting in concert with him or on his behalf be eligible to purchase forfeited property at any sale held by the United States. Upon application of a person, other than the defendant or person acting in concert with him or on his behalf, the court may restrain or stay the sale or disposition of the property pending the conclusion of any appeal of the criminal case giving rise to the forfeiture, if the applicant demonstrates that proceeding with the sale or disposition of the property will result in irreparable injury, harm, or loss to him.
(h) Authority of Attorney General. - With respect to property ordered forfeited under this section, the Attorney General is authorized to –
(1) grant petitions for mitigation or remission of forfeiture, restore forfeited property to victims of a violation of this chapter, or take any other action to protect the rights of innocent persons which is in the interest of justice and which is not inconsistent with the provisions of this section;
(2) comprise claims arising under this section;
(3) award compensation to persons providing information resulting in a forfeiture under this section;
(4) direct the disposition by the United States, under section 616 of the Tariff Act of 1930, of all property ordered forfeited under this section by public sale or any other commercially feasible means, making due provision for the rights of innocent persons; and
(5) take appropriate measures necessary to safeguard and maintain property ordered forfeited under this section pending its disposition.
(i) Bar on Intervention. - Except as provided in subsection (l) of this section, no party claiming an interest in property subject to forfeiture under this section may -
(1) intervene in a trial or appeal of a criminal case involving the forfeiture of such property under this section; or
(2) commence an action at law or equity against the United States concerning the validity of his alleged interest in the property subsequent to the filing of an indictment or information alleging that the property is subject to forfeiture under this section.
(j) Jurisdiction To Enter Orders. - The district courts of the United States shall have jurisdiction to enter orders as provided in this section without regard to the location of any property which may be subject to forfeiture under this section or which has been ordered forfeited under this section.
(k) Depositions. - In order to facilitate the identification and location of property declared forfeited and to facilitate the disposition of petitions for remission or mitigation of forfeiture, after the entry of an order declaring property forfeited to the United States, the court may, upon application of the United States, order that the testimony of any witness relating to the property forfeited be taken by deposition and that any designated book, paper, document, record, recording, or other material not privileged be produced at the same time and place, in the same manner as provided for the taking of depositions under Rule 15 of the Federal Rules of Criminal Procedure.
(l) Third Party Interests. –
(1) Following the entry of an order of forfeiture under this section, the United States shall publish notice of the order and of its intent to dispose of the property in such manner as the Attorney General may direct. The Government may also, to the extent practicable, provide direct written notice to any person known to have alleged an interest in the property that is the subject of the order of forfeiture as a substitute for published notice as to those persons so notified.
(2) Any person, other than the defendant, asserting a legal interest in property which has been ordered forfeited to the United States pursuant to this section may, within 30 days of the final publication of notice or his receipt of notice under paragraph (1), whichever is earlier, petition the court for a hearing to adjudicate the validity of his alleged interest in the property. The hearing shall be held before the court alone, without a jury.
(3) The petition shall be signed by the petitioner under penalty of perjury and shall set forth the nature and extent of the petitioner's right, title, or interest in the property, the time and circumstances of the petitioner's acquisition of the right, title, or interest in the property, any additional facts supporting the petitioner's claim, and the relief sought.
(4) The hearing on the petition shall, to the extent practicable and consistent with the interests of justice, be held within 30 days of the filing of the petition. The court may consolidate the hearing on the petition with a hearing on any other petition filed by a person other than the defendant under this subsection.
(5) At the hearing, the petitioner may testify and present evidence and witnesses on his own behalf, and cross-examine witnesses who appear at the hearing. The United States may present evidence and witnesses in rebuttal and in defense of its claim to the property and cross-examine witnesses who appear at the hearing. In addition to testimony and evidence presented at the hearing, the court shall consider the relevant portions of the record of the criminal case which resulted in the order of forfeiture.
(6) If, after the hearing, the court determines that the petitioner has established by a preponderance of the evidence that –
(A) the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section; or
(B) the petitioner is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture under this section; the court shall amend the order of forfeiture in accordance with its determination.
(7) Following the court's disposition of all petitions filed under this subsection, or if no such petitions are filed following the expiration of the period provided in paragraph (2) for the filing of such petitions, the United States shall have clear title to property that is the subject of the order of forfeiture and may warrant good title to any subsequent purchaser or transferee.
(m) Construction. - This section shall be liberally construed to effectuate its remedial purposes.
(n) Substitute Assets. - If any of the property described in subsection (a), as a result of any act or omission of the defendant –
(1) cannot be located upon the exercise of due diligence;
(2) has been transferred or sold to, or deposited with, a third party;
(3) has been placed beyond the jurisdiction of the court;
(4) has been substantially diminished in value; or
(5) has been commingled with other property which cannot be divided without difficulty; the court shall order the forfeiture of any other property of the defendant up to the value of any property described in paragraphs (1) through (5).
Sec. 1468. Distributing obscene material by cable or subscription television
(a) Whoever knowingly utters any obscene language or distributes any obscene matter by means of cable television or subscription services on television, shall be punished by imprisonment for not more than 2 years or by a fine in accordance with this title, or both.
(b) As used in this section, the term ''distribute'' means to send, transmit, retransmit, telecast, broadcast, or cablecast, including by wire, microwave, or satellite, or to produce or provide material for such distribution.
(c) Nothing in this chapter, or the Cable Communications Policy Act of 1984, or any other provision of Federal law, is intended to interfere with or preempt the power of the States, including political subdivisions thereof, to regulate the uttering of language that is obscene or otherwise unprotected by the Constitution or the distribution of matter that is obscene or otherwise unprotected by the Constitution, of any sort, by means of cable television or subscription services on television.
Sec. 1469. Presumptions
(a) In any prosecution under this chapter in which an element of the offense is that the matter in question was transported, shipped, or carried in interstate commerce, proof, by either circumstantial or direct evidence, that such matter was produced or manufactured in one State and is subsequently located in another State shall raise a rebuttable presumption that such matter was transported, shipped, or carried in interstate commerce.
(b) In any prosecution under this chapter in which an element of the offense is that the matter in question was transported, shipped, or carried in foreign commerce, proof, by either circumstantial or direct evidence, that such matter was produced or manufactured outside of the United States and is subsequently located in the United States shall raise a rebuttable presumption that such matter was transported, shipped, or carried in foreign commerce.
Sec. 1470. Transfer of obscene material to minors
Whoever, using the mail or any facility or means of interstate or foreign commerce, knowingly transfers obscene matter to another individual who has not attained the age of 16 years, knowing that such other individual has not attained the age of 16 years, or attempts to do so, shall be fined under this title, imprisoned not more than 10 years, or both.
IX. CAN-SPAM ACT (as passed by Congress)
An Act
To regulate interstate commerce by imposing limitations and penalties on the transmission of unsolicited commercial electronic mail via the Internet.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003', or the `CAN-SPAM Act of 2003'.
SECTION 2. CONGRESSIONAL FINDINGS AND POLICY.
(a) FINDINGS- The Congress finds the following:
(1) Electronic mail has become an extremely important and popular means of communication, relied on by millions of Americans on a daily basis for personal and commercial purposes. Its low cost and global reach make it extremely convenient and efficient, and offer unique opportunities for the development and growth of frictionless commerce.
(2) The convenience and efficiency of electronic mail are threatened by the extremely rapid growth in the volume of unsolicited commercial electronic mail. Unsolicited commercial electronic mail is currently estimated to account for over half of all electronic mail traffic, up from an estimated 7 percent in 2001, and the volume continues to rise. Most of these messages are fraudulent or deceptive in one or more respects.
(3) The receipt of unsolicited commercial electronic mail may result in costs to recipients who cannot refuse to accept such mail and who incur costs for the storage of such mail, or for the time spent accessing, reviewing, and discarding such mail, or for both.
(4) The receipt of a large number of unwanted messages also decreases the convenience of electronic mail and creates a risk that wanted electronic mail messages, both commercial and noncommercial, will be lost, overlooked, or discarded amidst the larger volume of unwanted messages, thus reducing the reliability and usefulness of electronic mail to the recipient.
(5) Some commercial electronic mail contains material that many recipients may consider vulgar or pornographic in nature.
(6) The growth in unsolicited commercial electronic mail imposes significant monetary costs on providers of Internet access services, businesses, and educational and nonprofit institutions that carry and receive such mail, as there is a finite volume of mail that such providers, businesses, and institutions can handle without further investment in infrastructure.
(7) Many senders of unsolicited commercial electronic mail purposefully disguise the source of such mail.
(8) Many senders of unsolicited commercial electronic mail purposefully include misleading information in the messages' subject lines in order to induce the recipients to view the messages.
(9) While some senders of commercial electronic mail messages provide simple and reliable ways for recipients to reject (or `opt-out' of) receipt of commercial electronic mail from such senders in the future, other senders provide no such `opt-out' mechanism, or refuse to honor the requests of recipients not to receive electronic mail from such senders in the future, or both.
(10) Many senders of bulk unsolicited commercial electronic mail use computer programs to gather large numbers of electronic mail addresses on an automated basis from Internet websites or online services where users must post their addresses in order to make full use of the website or service.
(11) Many States have enacted legislation intended to regulate or reduce unsolicited commercial electronic mail, but these statutes impose different standards and requirements. As a result, they do not appear to have been successful in addressing the problems associated with unsolicited commercial electronic mail, in part because, since an electronic mail address does not specify a geographic location, it can be extremely difficult for law-abiding businesses to know with which of these disparate statutes they are required to comply.
(12) The problems associated with the rapid growth and abuse of unsolicited commercial electronic mail cannot be solved by Federal legislation alone. The development and adoption of technological approaches and the pursuit of cooperative efforts with other countries will be necessary as well.
(b) CONGRESSIONAL DETERMINATION OF PUBLIC POLICY- On the basis of the findings in subsection (a), the Congress determines that--
(1) there is a substantial government interest in regulation of commercial electronic mail on a nationwide basis;
(2) senders of commercial electronic mail should not mislead recipients as to the source or content of such mail; and
(3) recipients of commercial electronic mail have a right to decline to receive additional commercial electronic mail from the same source.
SECTION 3. DEFINITIONS.
In this Act:
(1) AFFIRMATIVE CONSENT- The term `affirmative consent', when used with respect to a commercial electronic mail message, means that--
(A) the recipient expressly consented to receive the message, either in response to a clear and conspicuous request for such consent or at the recipient's own initiative; and
(B) if the message is from a party other than the party to which the recipient communicated such consent, the recipient was given clear and conspicuous notice at the time the consent was communicated that the recipient's electronic mail address could be transferred to such other party for the purpose of initiating commercial electronic mail messages.
(2) Commercial electronic mail message-
(A) IN GENERAL- The term `commercial electronic mail message' means any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service (including content on an Internet website operated for a commercial purpose).
(B) TRANSACTIONAL OR RELATIONSHIP MESSAGES- The term `commercial electronic mail message' does not include a transactional or relationship message.
(C) REGULATIONS REGARDING PRIMARY PURPOSE- Not later than 12 months after the date of the enactment of this Act, the Commission shall issue regulations pursuant to section 13 defining the relevant criteria to facilitate the determination of the primary purpose of an electronic mail message.
(D) REFERENCE TO COMPANY OR WEBSITE- The inclusion of a reference to a commercial entity or a link to the website of a commercial entity in an electronic mail message does not, by itself, cause such message to be treated as a commercial electronic mail message for purposes of this Act if the contents or circumstances of the message indicate a primary purpose other than commercial advertisement or promotion of a commercial product or service.
(3) COMMISSION- The term `Commission' means the Federal Trade Commission.
(4) DOMAIN NAME- The term `domain name' means any alphanumeric designation which is registered with or assigned by any domain name registrar, domain name registry, or other domain name registration authority as part of an electronic address on the Internet.
(5) ELECTRONIC MAIL ADDRESS- The term `electronic mail address' means a destination, commonly expressed as a string of characters, consisting of a unique user name or mailbox (commonly referred to as the `local part') and a reference to an Internet domain (commonly referred to as the `domain part'), whether or not displayed, to which an electronic mail message can be sent or delivered.
(6) ELECTRONIC MAIL MESSAGE- The term `electronic mail message' means a message sent to a unique electronic mail address.
(7) FTC ACT- The term `FTC Act' means the Federal Trade Commission Act (15 U.S.C. 41 et seq.).
(8) HEADER INFORMATION- The term `header information' means the source, destination, and routing information attached to an electronic mail message, including the originating domain name and originating electronic mail address, and any other information that appears in the line identifying, or purporting to identify, a person initiating the message.
(9) INITIATE- The term `initiate', when used with respect to a commercial electronic mail message, means to originate or transmit such message or to procure the origination or transmission of such message, but shall not include actions that constitute routine conveyance of such message. For purposes of this paragraph, more than one person may be considered to have initiated a message.
(10) INTERNET- The term `Internet' has the meaning given that term in the Internet Tax Freedom Act (47 U.S.C. 151 nt).
(11) INTERNET ACCESS SERVICE- The term `Internet access service' has the meaning given that term in section 231(e)(4) of the Communications Act of 1934 (47 U.S.C. 231(e)(4)).
(12) PROCURE- The term `procure', when used with respect to the initiation of a commercial electronic mail message, means intentionally to pay or provide other consideration to, or induce, another person to initiate such a message on one's behalf.
(13) PROTECTED COMPUTER- The term `protected computer' has the meaning given that term in section 1030(e)(2)(B) of title 18, United States Code.
(14) RECIPIENT- The term `recipient', when used with respect to a commercial electronic mail message, means an authorized user of the electronic mail address to which the message was sent or delivered. If a recipient of a commercial electronic mail message has one or more electronic mail addresses in addition to the address to which the message was sent or delivered, the recipient shall be treated as a separate recipient with respect to each such address. If an electronic mail address is reassigned to a new user, the new user shall not be treated as a recipient of any commercial electronic mail message sent or delivered to that address before it was reassigned.
(15) ROUTINE CONVEYANCE- The term `routine conveyance' means the transmission, routing, relaying, handling, or storing, through an automatic technical process, of an electronic mail message for which another person has identified the recipients or provided the recipient addresses.
(16) SENDER-
(A) IN GENERAL- Except as provided in subparagraph (B), the term `sender', when used with respect to a commercial electronic mail message, means a person who initiates such a message and whose product, service, or Internet web site is advertised or promoted by the message.
(B) SEPARATE LINES OF BUSINESS OR DIVISIONS- If an entity operates through separate lines of business or divisions and holds itself out to the recipient throughout the message as that particular line of business or division rather than as the entity of which such line of business or division is a part, then the line of business or the division shall be treated as the sender of such message for purposes of this Act.
(17) Transactional or relationship message-
(A) IN GENERAL- The term `transactional or relationship message' means an electronic mail message the primary purpose of which is--
(i) to facilitate, complete, or confirm a commercial transaction that the recipient has previously agreed to enter into with the sender;
(ii) to provide warranty information, product recall information, or safety or security information with respect to a commercial product or service used or purchased by the recipient;
(iii) to provide--
(I) notification concerning a change in the terms or features of;
(II) notification of a change in the recipient's standing or status with respect to; or
(III) at regular periodic intervals, account balance information or other type of account statement with respect to,
a subscription, membership, account, loan, or comparable ongoing commercial relationship involving the ongoing purchase or use by the recipient of products or services offered by the sender;
(iv) to provide information directly related to an employment relationship or related benefit plan in which the recipient is currently involved, participating, or enrolled; or
(v) to deliver goods or services, including product updates or upgrades, that the recipient is entitled to receive under the terms of a transaction that the recipient has previously agreed to enter into with the sender.
(B) MODIFICATION OF DEFINITION- The Commission by regulation pursuant to section 13 may modify the definition in subparagraph (A) to expand or contract the categories of messages that are treated as transactional or relationship messages for purposes of this Act to the extent that such modification is necessary to accommodate changes in electronic mail technology or practices and accomplish the purposes of this Act.
SECTION 4. PROHIBITION AGAINST PREDATORY AND ABUSIVE COMMERCIAL E-MAIL.
(a) OFFENSE-
(1) IN GENERAL- Chapter 47 of title 18, United States Code, is amended by adding at the end the following new section:
`Sec. 1037. Fraud and related activity in connection with electronic mail
`(a) IN GENERAL- Whoever, in or affecting interstate or foreign commerce, knowingly--
`(1) accesses a protected computer without authorization, and intentionally initiates the transmission of multiple commercial electronic mail messages from or through such computer,
(2) uses a protected computer to relay or retransmit multiple commercial electronic mail messages, with the intent to deceive or mislead recipients, or any Internet access service, as to the origin of such messages,
(3) materially falsifies header information in multiple commercial electronic mail messages and intentionally initiates the transmission of such messages,
(4) registers, using information that materially falsifies the identity of the actual registrant, for five or more electronic mail accounts or online user accounts or two or more domain names, and intentionally initiates the transmission of multiple commercial electronic mail messages from any combination of such accounts or domain names, or
(5) falsely represents oneself to be the registrant or the legitimate successor in interest to the registrant of 5 or more Internet Protocol addresses, and intentionally initiates the transmission of multiple commercial electronic mail messages from such addresses,
or conspires to do so, shall be punished as provided in subsection (b).
(b) PENALTIES- The punishment for an offense under subsection (a) is--
(1) a fine under this title, imprisonment for not more than 5 years, or both, if--
(A) the offense is committed in furtherance of any felony under the laws of the United States or of any State; or
(B) the defendant has previously been convicted under this section or section 1030, or under the law of any State for conduct involving the transmission of multiple commercial electronic mail messages or unauthorized access to a computer system;
(2) a fine under this title, imprisonment for not more than 3 years, or both, if--
(A) the offense is an offense under subsection (a)(1);
(B) the offense is an offense under subsection (a)(4) and involved 20 or more falsified electronic mail or online user account registrations, or 10 or more falsified domain name registrations;
(C) the volume of electronic mail messages transmitted in furtherance of the offense exceeded 2,500 during any 24-hour period, 25,000 during any 30-day period, or 250,000 during any 1-year period;
(D) the offense caused loss to one or more persons aggregating $5,000 or more in value during any 1-year period;
(E) as a result of the offense any individual committing the offense obtained anything of value aggregating $5,000 or more during any 1-year period; or
(F) the offense was undertaken by the defendant in concert with three or more other persons with respect to whom the defendant occupied a position of organizer or leader; and
(3) a fine under this title or imprisonment for not more than 1 year, or both, in any other case.
(c) FORFEITURE-
(1) IN GENERAL- The court, in imposing sentence on a person who is convicted of an offense under this section, shall order that the defendant forfeit to the United States--
(A) any property, real or personal, constituting or traceable to gross proceeds obtained from such offense; and
(B) any equipment, software, or other technology used or intended to be used to commit or to facilitate the commission of such offense.
(2) PROCEDURES- The procedures set forth in section 413 of the Controlled Substances Act (21 U.S.C. 853), other than subsection (d) of that section, and in Rule 32.2 of the Federal Rules of Criminal Procedure, shall apply to all stages of a criminal forfeiture proceeding under this section.
(d) DEFINITIONS- In this section:
(1) LOSS- The term `loss' has the meaning given that term in section 1030(e) of this title.
(2) MATERIALLY- For purposes of paragraphs (3) and (4) of subsection (a), header information or registration information is materially falsified if it is altered or concealed in a manner that would impair the ability of a recipient of the message, an Internet access service processing the message on behalf of a recipient, a person alleging a violation of this section, or a law enforcement agency to identify, locate, or respond to a person who initiated the electronic mail message or to investigate the alleged violation.
(3) MULTIPLE- The term `multiple' means more than 100 electronic mail messages during a 24-hour period, more than 1,000 electronic mail messages during a 30-day period, or more than 10,000 electronic mail messages during a 1-year period.
(4) OTHER TERMS- Any other term has the meaning given that term by section 3 of the CAN-SPAM Act of 2003.'.
(2) CONFORMING AMENDMENT- The chapter analysis for chapter 47 of title 18, United States Code, is amended by adding at the end the following:
Sec. 1037. Fraud and related activity in connection with electronic mail.
(b) UNITED STATES SENTENCING COMMISSION-
(1) DIRECTIVE- Pursuant to its authority under section 994(p) of title 28, United States Code, and in accordance with this section, the United States Sentencing Commission shall review and, as appropriate, amend the sentencing guidelines and policy statements to provide appropriate penalties for violations of section 1037 of title 18, United States Code, as added by this section, and other offenses that may be facilitated by the sending of large quantities of unsolicited electronic mail.
(2) REQUIREMENTS- In carrying out this subsection, the Sentencing Commission shall consider providing sentencing enhancements for--
(A) those convicted under section 1037 of title 18, United States Code, who--
(i) obtained electronic mail addresses through improper means, including--
(I) harvesting electronic mail addresses of the users of a website, proprietary service, or other online public forum operated by another person, without the authorization of such person; and
(II) randomly generating electronic mail addresses by computer; or
(ii) knew that the commercial electronic mail messages involved in the offense contained or advertised an Internet domain for which the registrant of the domain had provided false registration information; and
(B) those convicted of other offenses, including offenses involving fraud, identity theft, obscenity, child pornography, and the sexual exploitation of children, if such offenses involved the sending of large quantities of electronic mail.
(c) SENSE OF CONGRESS- It is the sense of Congress that--
(1) Spam has become the method of choice for those who distribute pornography, perpetrate fraudulent schemes, and introduce viruses, worms, and Trojan horses into personal and business computer systems; and
(2) the Department of Justice should use all existing law enforcement tools to investigate and prosecute those who send bulk commercial e-mail to facilitate the commission of Federal crimes, including the tools contained in chapters 47 and 63 of title 18, United States Code (relating to fraud and false statements); chapter 71 of title 18, United States Code (relating to obscenity); chapter 110 of title 18, United States Code (relating to the sexual exploitation of children); and chapter 95 of title 18, United States Code (relating to racketeering), as appropriate.
SECTION 5. OTHER PROTECTIONS FOR USERS OF COMMERCIAL ELECTRONIC MAIL.
(a) REQUIREMENTS FOR TRANSMISSION OF MESSAGES-
(1) PROHIBITION OF FALSE OR MISLEADING TRANSMISSION INFORMATION- It is unlawful for any person to initiate the transmission, to a protected computer, of a commercial electronic mail message, or a transactional or relationship message, that contains, or is accompanied by, header information that is materially false or materially misleading. For purposes of this paragraph--
(A) header information that is technically accurate but includes an originating electronic mail address, domain name, or Internet Protocol address the access to which for purposes of initiating the message was obtained by means of false or fraudulent pretenses or representations shall be considered materially misleading;
(B) a `from' line (the line identifying or purporting to identify a person initiating the message) that accurately identifies any person who initiated the message shall not be considered materially false or materially misleading; and
(C) header information shall be considered materially misleading if it fails to identify accurately a protected computer used to initiate the message because the person initiating the message knowingly uses another protected computer to relay or retransmit the message for purposes of disguising its origin.
(2) PROHIBITION OF DECEPTIVE SUBJECT HEADINGS- It is unlawful for any person to initiate the transmission to a protected computer of a commercial electronic mail message if such person has actual knowledge, or knowledge fairly implied on the basis of objective circumstances, that a subject heading of the message would be likely to mislead a recipient, acting reasonably under the circumstances, about a material fact regarding the contents or subject matter of the message (consistent with the criteria used in enforcement of section 5 of the Federal Trade Commission Act (15 U.S.C. 45)).
(3) Inclusion of return address or comparable mechanism in commercial electronic mail-
(A) IN GENERAL- It is unlawful for any person to initiate the transmission to a protected computer of a commercial electronic mail message that does not contain a functioning return electronic mail address or other Internet-based mechanism, clearly and conspicuously displayed, that--
(i) a recipient may use to submit, in a manner specified in the message, a reply electronic mail message or other form of Internet-based communication requesting not to receive future commercial electronic mail messages from that sender at the electronic mail address where the message was received; and
(ii) remains capable of receiving such messages or communications for no less than 30 days after the transmission of the original message.
(B) MORE DETAILED OPTIONS POSSIBLE- The person initiating a commercial electronic mail message may comply with subparagraph (A)(i) by providing the recipient a list or menu from which the recipient may choose the specific types of commercial electronic mail messages the recipient wants to receive or does not want to receive from the sender, if the list or menu includes an option under which the recipient may choose not to receive any commercial electronic mail messages from the sender.
(C) TEMPORARY INABILITY TO RECEIVE MESSAGES OR PROCESS REQUESTS- A return electronic mail address or other mechanism does not fail to satisfy the requirements of subparagraph (A) if it is unexpectedly and temporarily unable to receive messages or process requests due to a technical problem beyond the control of the sender if the problem is corrected within a reasonable time period.
(4) PROHIBITION OF TRANSMISSION OF COMMERCIAL ELECTRONIC MAIL AFTER OBJECTION-
(A) IN GENERAL- If a recipient makes a request using a mechanism provided pursuant to paragraph (3) not to receive some or any commercial electronic mail messages from such sender, then it is unlawful--
(i) for the sender to initiate the transmission to the recipient, more than 10 business days after the receipt of such request, of a commercial electronic mail message that falls within the scope of the request;
(ii) for any person acting on behalf of the sender to initiate the transmission to the recipient, more than 10 business days after the receipt of such request, of a commercial electronic mail message with actual knowledge, or knowledge fairly implied on the basis of objective circumstances, that such message falls within the scope of the request;
(iii) for any person acting on behalf of the sender to assist in initiating the transmission to the recipient, through the provision or selection of addresses to which the message will be sent, of a commercial electronic mail message with actual knowledge, or knowledge fairly implied on the basis of objective circumstances, that such message would violate clause (i) or (ii); or
(iv) for the sender, or any other person who knows that the recipient has made such a request, to sell, lease, exchange, or otherwise transfer or release the electronic mail address of the recipient (including through any transaction or other transfer involving mailing lists bearing the electronic mail address of the recipient) for any purpose other than compliance with this Act or other provision of law.
(B) SUBSEQUENT AFFIRMATIVE CONSENT- A prohibition in subparagraph (A) does not apply if there is affirmative consent by the recipient subsequent to the request under subparagraph (A).
(5) INCLUSION OF IDENTIFIER, OPT-OUT, AND PHYSICAL ADDRESS IN COMMERCIAL ELECTRONIC MAIL- (A) It is unlawful for any person to initiate the transmission of any commercial electronic mail message to a protected computer unless the message provides--
(i) clear and conspicuous identification that the message is an advertisement or solicitation;
(ii) clear and conspicuous notice of the opportunity under paragraph (3) to decline to receive further commercial electronic mail messages from the sender; and
(iii) a valid physical postal address of the sender.
(B) Subparagraph (A)(i) does not apply to the transmission of a commercial electronic mail message if the recipient has given prior affirmative consent to receipt of the message.
(6) MATERIALLY- For purposes of paragraph (1), the term `materially', when used with respect to false or misleading header information, includes the alteration or concealment of header information in a manner that would impair the ability of an Internet access service processing the message on behalf of a recipient, a person alleging a violation of this section, or a law enforcement agency to identify, locate, or respond to a person who initiated the electronic mail message or to investigate the alleged violation, or the ability of a recipient of the message to respond to a person who initiated the electronic message.
(b) Aggravated Violations Relating to Commercial Electronic Mail-
(1) Address harvesting and dictionary attacks-
(A) IN GENERAL- It is unlawful for any person to initiate the transmission, to a protected computer, of a commercial electronic mail message that is unlawful under subsection (a), or to assist in the origination of such message through the provision or selection of addresses to which the message will be transmitted, if such person had actual knowledge, or knowledge fairly implied on the basis of objective circumstances, that--
(i) the electronic mail address of the recipient was obtained using an automated means from an Internet website or proprietary online service operated by another person, and such website or online service included, at the time the address was obtained, a notice stating that the operator of such website or online service will not give, sell, or otherwise transfer addresses maintained by such website or online service to any other party for the purposes of initiating, or enabling others to initiate, electronic mail messages; or
(ii) the electronic mail address of the recipient was obtained using an automated means that generates possible electronic mail addresses by combining names, letters, or numbers into numerous permutations.
(B) DISCLAIMER- Nothing in this paragraph creates an ownership or proprietary interest in such electronic mail addresses.
(2) AUTOMATED CREATION OF MULTIPLE ELECTRONIC MAIL ACCOUNTS- It is unlawful for any person to use scripts or other automated means to register for multiple electronic mail accounts or online user accounts from which to transmit to a protected computer, or enable another person to transmit to a protected computer, a commercial electronic mail message that is unlawful under subsection (a).
(3) RELAY OR RETRANSMISSION THROUGH UNAUTHORIZED ACCESS- It is unlawful for any person knowingly to relay or retransmit a commercial electronic mail message that is unlawful under subsection (a) from a protected computer or computer network that such person has accessed without authorization.
(c) SUPPLEMENTARY RULEMAKING AUTHORITY- The Commission shall by regulation, pursuant to section 13--
(1) modify the 10-business-day period under subsection (a)(4)(A) or subsection (a)(4)(B), or both, if the Commission determines that a different period would be more reasonable after taking into account--
(A) the purposes of subsection (a);
(B) the interests of recipients of commercial electronic mail; and
(C) the burdens imposed on senders of lawful commercial electronic mail; and
(2) specify additional activities or practices to which subsection (b) applies if the Commission determines that those activities or practices are contributing substantially to the proliferation of commercial electronic mail messages that are unlawful under subsection (a).
(d) REQUIREMENT TO PLACE WARNING LABELS ON COMMERCIAL ELECTRONIC MAIL CONTAINING SEXUALLY ORIENTED MATERIAL-
(1) IN GENERAL- No person may initiate in or affecting interstate commerce the transmission, to a protected computer, of any commercial electronic mail message that includes sexually oriented material and--
(A) fail to include in subject heading for the electronic mail message the marks or notices prescribed by the Commission under this subsection; or
(B) fail to provide that the matter in the message that is initially viewable to the recipient, when the message is opened by any recipient and absent any further actions by the recipient, includes only--
(i) to the extent required or authorized pursuant to paragraph (2), any such marks or notices;
(ii) the information required to be included in the message pursuant to subsection (a)(5); and
(iii) instructions on how to access, or a mechanism to access, the sexually oriented material.
(2) PRIOR AFFIRMATIVE CONSENT- Paragraph (1) does not apply to the transmission of an electronic mail message if the recipient has given prior affirmative consent to receipt of the message.
(3) PRESCRIPTION OF MARKS AND NOTICES- Not later than 120 days after the date of the enactment of this Act, the Commission in consultation with the Attorney General shall prescribe clearly identifiable marks or notices to be included in or associated with commercial electronic mail that contains sexually oriented material, in order to inform the recipient of that fact and to facilitate filtering of such electronic mail. The Commission shall publish in the Federal Register and provide notice to the public of the marks or notices prescribed under this paragraph.
(4) DEFINITION- In this subsection, the term `sexually oriented material' means any material that depicts sexually explicit conduct (as that term is defined in section 2256 of title 18, United States Code), unless the depiction constitutes a small and insignificant part of the whole, the remainder of which is not primarily devoted to sexual matters.
(5) PENALTY- Whoever knowingly violates paragraph (1) shall be fined under title 18, United States Code, or imprisoned not more than 5 years, or both.
SECTION 6. BUSINESSES KNOWINGLY PROMOTED BY ELECTRONIC MAIL WITH FALSE OR MISLEADING TRANSMISSION INFORMATION.
(a) IN GENERAL- It is unlawful for a person to promote, or allow the promotion of, that person's trade or business, or goods, products, property, or services sold, offered for sale, leased or offered for lease, or otherwise made available through that trade or business, in a commercial electronic mail message the transmission of which is in violation of section 5(a)(1) if that person--
(1) knows, or should have known in the ordinary course of that person's trade or business, that the goods, products, property, or services sold, offered for sale, leased or offered for lease, or otherwise made available through that trade or business were being promoted in such a message;
(2) received or expected to receive an economic benefit from such promotion; and
(3) took no reasonable action--
(A) to prevent the transmission; or
(B) to detect the transmission and report it to the Commission.
(b) Limited Enforcement Against Third Parties-
(1) IN GENERAL- Except as provided in paragraph (2), a person (hereinafter referred to as the `third party') that provides goods, products, property, or services to another person that violates subsection (a) shall not be held liable for such violation.
(2) EXCEPTION- Liability for a violation of subsection (a) shall be imputed to a third party that provides goods, products, property, or services to another person that violates subsection (a) if that third party--
(A) owns, or has a greater than 50 percent ownership or economic interest in, the trade or business of the person that violated subsection (a); or
(B)(i) has actual knowledge that goods, products, property, or services are promoted in a commercial electronic mail message the transmission of which is in violation of section 5(a)(1); and
(ii) receives, or expects to receive, an economic benefit from such promotion.
(c) EXCLUSIVE ENFORCEMENT BY FTC- Subsections (f) and (g) of section 7 do not apply to violations of this section.
(d) SAVINGS PROVISION- Except as provided in section 7(f)(8), nothing in this section may be construed to limit or prevent any action that may be taken under this Act with respect to any violation of any other section of this Act.
SECTION 7. ENFORCEMENT GENERALLY.
(a) VIOLATION IS UNFAIR OR DECEPTIVE ACT OR PRACTICE- Except as provided in subsection (b), this Act shall be enforced by the Commission as if the violation of this Act were an unfair or deceptive act or practice proscribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
(b) ENFORCEMENT BY CERTAIN OTHER AGENCIES- Compliance with this Act shall be enforced--
(1) under section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), in the case of--
(A) national banks, and Federal branches and Federal agencies of foreign banks, by the Office of the Comptroller of the Currency;
(B) member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, organizations operating under section 25 or 25A of the Federal Reserve Act (12 U.S.C. 601 and 611), and bank holding companies, by the Board;
(C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System) and insured State branches of foreign banks, by the Board of Directors of the Federal Deposit Insurance Corporation; and
(D) savings associations the deposits of which are insured by the Federal Deposit Insurance Corporation, by the Director of the Office of Thrift Supervision;
(2) under the Federal Credit Union Act (12 U.S.C. 1751 et seq.) by the Board of the National Credit Union Administration with respect to any Federally insured credit union;
(3) under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) by the Securities and Exchange Commission with respect to any broker or dealer;
(4) under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) by the Securities and Exchange Commission with respect to investment companies;
(5) under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) by the Securities and Exchange Commission with respect to investment advisers registered under that Act;
(6) under State insurance law in the case of any person engaged in providing insurance, by the applicable State insurance authority of the State in which the person is domiciled, subject to section 104 of the Gramm-Bliley-Leach Act (15 U.S.C. 6701), except that in any State in which the State insurance authority elects not to exercise this power, the enforcement authority pursuant to this Act shall be exercised by the Commission in accordance with subsection (a);
(7) under part A of subtitle VII of title 49, United States Code, by the Secretary of Transportation with respect to any air carrier or foreign air carrier subject to that part;
(8) under the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et seq.) (except as provided in section 406 of that Act (7 U.S.C. 226, 227)), by the Secretary of Agriculture with respect to any activities subject to that Act;
(9) under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) by the Farm Credit Administration with respect to any Federal land bank, Federal land bank association, Federal intermediate credit bank, or production credit association; and
(10) under the Communications Act of 1934 (47 U.S.C. 151 et seq.) by the Federal Communications Commission with respect to any person subject to the provisions of that Act.
(c) EXERCISE OF CERTAIN POWERS- For the purpose of the exercise by any agency referred to in subsection (b) of its powers under any Act referred to in that subsection, a violation of this Act is deemed to be a violation of a Federal Trade Commission trade regulation rule. In addition to its powers under any provision of law specifically referred to in subsection (b), each of the agencies referred to in that subsection may exercise, for the purpose of enforcing compliance with any requirement imposed under this Act, any other authority conferred on it by law.
(d) ACTIONS BY THE COMMISSION- The Commission shall prevent any person from violating this 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 (15 U.S.C. 41 et seq.) were incorporated into and made a part of this Act. Any entity that violates any provision of that subtitle is 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, power, and duties as though all applicable terms and provisions of the Federal Trade Commission Act were incorporated into and made a part of that subtitle.
(e) AVAILABILITY OF CEASE-AND-DESIST ORDERS AND INJUNCTIVE RELIEF WITHOUT SHOWING OF KNOWLEDGE- Notwithstanding any other provision of this Act, in any proceeding or action pursuant to subsection (a), (b), (c), or (d) of this section to enforce compliance, through an order to cease and desist or an injunction, with section 5(a)(1)(C), section 5(a)(2), clause (ii), (iii), or (iv) of section 5(a)(4)(A), section 5(b)(1)(A), or section 5(b)(3), neither the Commission nor the Federal Communications Commission shall be required to allege or prove the state of mind required by such section or subparagraph.
(f) Enforcement by States-
(1) CIVIL ACTION- In any case in which the attorney general of a State, or an official or agency of a State, has reason to believe that an interest of the residents of that State has been or is threatened or adversely affected by any person who violates paragraph (1) or (2) of section 5(a), who violates section 5(d), or who engages in a pattern or practice that violates paragraph (3), (4), or (5) of section 5(a), of this Act, the attorney general, official, or agency of the State, as parens patriae, may bring a civil action on behalf of the residents of the State in a district court of the United States of appropriate jurisdiction--
(A) to enjoin further violation of section 5 of this Act by the defendant; or
(B) to obtain damages on behalf of residents of the State, in an amount equal to the greater of--
(i) the actual monetary loss suffered by such residents; or
(ii) the amount determined under paragraph (3).
(2) AVAILABILITY OF INJUNCTIVE RELIEF WITHOUT SHOWING OF KNOWLEDGE- Notwithstanding any other provision of this Act, in a civil action under paragraph (1)(A) of this subsection, the attorney general, official, or agency of the State shall not be required to allege or prove the state of mind required by section 5(a)(1)(C), section 5(a)(2), clause (ii), (iii), or (iv) of section 5(a)(4)(A), section 5(b)(1)(A), or section 5(b)(3).
(3) Statutory damages-
(A) IN GENERAL- For purposes of paragraph (1)(B)(ii), the amount determined under this paragraph is the amount calculated by multiplying the number of violations (with each separately addressed unlawful message received by or addressed to such residents treated as a separate violation) by up to $250.
(B) LIMITATION- For any violation of section 5 (other than section 5(a)(1)), the amount determined under subparagraph (A) may not exceed $2,000,000.
(C) AGGRAVATED DAMAGES- The court may increase a damage award to an amount equal to not more than three times the amount otherwise available under this paragraph if--
(i) the court determines that the defendant committed the violation willfully and knowingly; or
(ii) the defendant's unlawful activity included one or more of the aggravating violations set forth in section 5(b).
(D) REDUCTION OF DAMAGES- In assessing damages under subparagraph (A), the court may consider whether--
(i) the defendant has established and implemented, with due care, commercially reasonable practices and procedures designed to effectively prevent such violations; or
(ii) the violation occurred despite commercially reasonable efforts to maintain compliance the practices and procedures to which reference is made in clause (i).
(4) ATTORNEY FEES- In the case of any successful action under paragraph (1), the court, in its discretion, may award the costs of the action and reasonable attorney fees to the State.
(5) RIGHTS OF FEDERAL REGULATORS- The State shall serve prior written notice of any action under paragraph (1) upon the Federal Trade Commission or the appropriate Federal regulator determined under subsection (b) and provide the Commission or appropriate Federal regulator with a copy of its complaint, except in any case in which such prior notice is not feasible, in which case the State shall serve such notice immediately upon instituting such action. The Federal Trade Commission or appropriate Federal regulator shall have the right--
(A) to intervene in the action;
(B) upon so intervening, to be heard on all matters arising therein;
(C) to remove the action to the appropriate United States district court; and
(D) to file petitions for appeal.
(6) CONSTRUCTION- For purposes of bringing any civil action under paragraph (1), nothing in this Act shall be construed to prevent an attorney general of a State from exercising the powers conferred on the attorney general by the laws of that State to--
(A) conduct investigations;
(B) administer oaths or affirmations; or
(C) compel the attendance of witnesses or the production of documentary and other evidence.
(7) VENUE; SERVICE OF PROCESS-
(A) VENUE- Any action brought under paragraph (1) may be brought in the district court of the United States that meets applicable requirements relating to venue under section 1391 of title 28, United States Code.
(B) SERVICE OF PROCESS- In an action brought under paragraph (1), process may be served in any district in which the defendant--
(i) is an inhabitant; or
(ii) maintains a physical place of business.
(8) LIMITATION ON STATE ACTION WHILE FEDERAL ACTION IS PENDING- If the Commission, or other appropriate Federal agency under subsection (b), has instituted a civil action or an administrative action for violation of this Act, no State attorney general, or official or agency of a State, may bring an action under this subsection during the pendency of that action against any defendant named in the complaint of the Commission or the other agency for any violation of this Act alleged in the complaint.
(9) REQUISITE SCIENTER FOR CERTAIN CIVIL ACTIONS- Except as provided in section 5(a)(1)(C), section 5(a)(2), clause (ii), (iii), or (iv) of section 5(a)(4)(A), section 5(b)(1)(A), or section 5(b)(3), in a civil action brought by a State attorney general, or an official or agency of a State, to recover monetary damages for a violation of this Act, the court shall not grant the relief sought unless the attorney general, official, or agency establishes that the defendant acted with actual knowledge, or knowledge fairly implied on the basis of objective circumstances, of the act or omission that constitutes the violation.
(g) Action by Provider of Internet Access Service-
(1) ACTION AUTHORIZED- A provider of Internet access service adversely affected by a violation of section 5(a)(1), 5(b), or 5(d), or a pattern or practice that violates paragraph (2), (3), (4), or (5) of section 5(a), may bring a civil action in any district court of the United States with jurisdiction over the defendant--
(A) to enjoin further violation by the defendant; or
(B) to recover damages in an amount equal to the greater of--
(i) actual monetary loss incurred by the provider of Internet access service as a result of such violation; or
(ii) the amount determined under paragraph (3).
(2) SPECIAL DEFINITION OF `PROCURE'- In any action brought under paragraph (1), this Act shall be applied as if the definition of the term `procure' in section 3(12) contained, after `behalf' the words `with actual knowledge, or by consciously avoiding knowing, whether such person is engaging, or will engage, in a pattern or practice that violates this Act'.
(3) STATUTORY DAMAGES-
(A) IN GENERAL- For purposes of paragraph (1)(B)(ii), the amount determined under this paragraph is the amount calculated by multiplying the number of violations (with each separately addressed unlawful message that is transmitted or attempted to be transmitted over the facilities of the provider of Internet access service, or that is transmitted or attempted to be transmitted to an electronic mail address obtained from the provider of Internet access service in violation of section 5(b)(1)(A)(i), treated as a separate violation) by--
(i) up to $100, in the case of a violation of section 5(a)(1); or
(ii) up to $25, in the case of any other violation of section 5.
(B) LIMITATION- For any violation of section 5 (other than section 5(a)(1)), the amount determined under subparagraph (A) may not exceed $1,000,000.
(C) AGGRAVATED DAMAGES- The court may increase a damage award to an amount equal to not more than three times the amount otherwise available under this paragraph if--
(i) the court determines that the defendant committed the violation willfully and knowingly; or
(ii) the defendant's unlawful activity included one or more of the aggravated violations set forth in section 5(b).
(D) REDUCTION OF DAMAGES- In assessing damages under subparagraph (A), the court may consider whether--
(i) the defendant has established and implemented, with due care, commercially reasonable practices and procedures designed to effectively prevent such violations; or
(ii) the violation occurred despite commercially reasonable efforts to maintain compliance with the practices and procedures to which reference is made in clause (i).
(4) ATTORNEY FEES- In any action brought pursuant to paragraph (1), the court may, in its discretion, require an undertaking for the payment of the costs of such action, and assess reasonable costs, including reasonable attorneys' fees, against any party.
SECTION 8. EFFECT ON OTHER LAWS.
(a) FEDERAL LAW-
(1) Nothing in this Act shall be construed to impair the enforcement of section 223 or 231 of the Communications Act of 1934 (47 U.S.C. 223 or 231, respectively), chapter 71 (relating to obscenity) or 110 (relating to sexual exploitation of children) of title 18, United States Code, or any other Federal criminal statute.
(2) Nothing in this Act shall be construed to affect in any way the Commission's authority to bring enforcement actions under FTC Act for materially false or deceptive representations or unfair practices in commercial electronic mail messages.
(b) STATE LAW-
(1) IN GENERAL- This Act supersedes any statute, regulation, or rule of a State or political subdivision of a State that expressly regulates the use of electronic mail to send commercial messages, except to the extent that any such statute, regulation, or rule prohibits falsity or deception in any portion of a commercial electronic mail message or information attached thereto.
(2) STATE LAW NOT SPECIFIC TO ELECTRONIC MAIL- This Act shall not be construed to preempt the applicability of--
(A) State laws that are not specific to electronic mail, including State trespass, contract, or tort law; or
(B) other State laws to the extent that those laws relate to acts of fraud or computer crime.
(c) NO EFFECT ON POLICIES OF PROVIDERS OF INTERNET ACCESS SERVICE- Nothing in this Act shall be construed to have any effect on the lawfulness or unlawfulness, under any other provision of law, of the adoption, implementation, or enforcement by a provider of Internet access service of a policy of declining to transmit, route, relay, handle, or store certain types of electronic mail messages.
SECTION 9. DO-NOT-E-MAIL REGISTRY.
(a) IN GENERAL- Not later than 6 months after the date of enactment of this Act, the Commission shall transmit to the Senate Committee on Commerce, Science, and Transportation and the House of Representatives Committee on Energy and Commerce a report that--
(1) sets forth a plan and timetable for establishing a nationwide marketing Do-Not-E-Mail registry;
(2) includes an explanation of any practical, technical, security, privacy, enforceability, or other concerns that the Commission has regarding such a registry; and
(3) includes an explanation of how the registry would be applied with respect to children with e-mail accounts.
(b) AUTHORIZATION TO IMPLEMENT- The Commission may establish and implement the plan, but not earlier than 9 months after the date of enactment of this Act.
SECTION 10. STUDY OF EFFECTS OF COMMERCIAL ELECTRONIC MAIL.
(a) IN GENERAL- Not later than 24 months after the date of the enactment of this Act, the Commission, in consultation with the Department of Justice and other appropriate agencies, shall submit a report to the Congress that provides a detailed analysis of the effectiveness and enforcement of the provisions of this Act and the need (if any) for the Congress to modify such provisions.
(b) REQUIRED ANALYSIS- The Commission shall include in the report required by subsection (a)--
(1) an analysis of the extent to which technological and marketplace developments, including changes in the nature of the devices through which consumers access their electronic mail messages, may affect the practicality and effectiveness of the provisions of this Act;
(2) analysis and recommendations concerning how to address commercial electronic mail that originates in or is transmitted through or to facilities or computers in other nations, including initiatives or policy positions that the Federal Government could pursue through international negotiations, fora, organizations, or institutions; and
(3) analysis and recommendations concerning options for protecting consumers, including children, from the receipt and viewing of commercial electronic mail that is obscene or pornographic.
SECTION 11. IMPROVING ENFORCEMENT BY PROVIDING REWARDS FOR INFORMATION ABOUT VIOLATIONS; LABELING.
The Commission shall transmit to the Senate Committee on Commerce, Science, and Transportation and the House of Representatives Committee on Energy and Commerce--
(1) a report, within 9 months after the date of enactment of this Act, that sets forth a system for rewarding those who supply information about violations of this Act, including--
(A) procedures for the Commission to grant a reward of not less than 20 percent of the total civil penalty collected for a violation of this Act to the first person that--
(i) identifies the person in violation of this Act; and
(ii) supplies information that leads to the successful collection of a civil penalty by the Commission; and
(B) procedures to minimize the burden of submitting a complaint to the Commission concerning violations of this Act, including procedures to allow the electronic submission of complaints to the Commission; and
(2) a report, within 18 months after the date of enactment of this Act, that sets forth a plan for requiring commercial electronic mail to be identifiable from its subject line, by means of compliance with Internet Engineering Task Force Standards, the use of the characters `ADV' in the subject line, or other comparable identifier, or an explanation of any concerns the Commission has that cause the Commission to recommend against the plan.
SECTION 12. RESTRICTIONS ON OTHER TRANSMISSIONS.
Section 227(b)(1) of the Communications Act of 1934 (47 U.S.C. 227(b)(1)) is amended, in the matter preceding subparagraph (A), by inserting `, or any person outside the United States if the recipient is within the United States' after `United States'.
SECTION 13. REGULATIONS.
(a) IN GENERAL- The Commission may issue regulations to implement the provisions of this Act (not including the amendments made by sections 4 and 12). Any such regulations shall be issued in accordance with section 553 of title 5, United States Code.
(b) LIMITATION- Subsection (a) may not be construed to authorize the Commission to establish a requirement pursuant to section 5(a)(5)(A) to include any specific words, characters, marks, or labels in a commercial electronic mail message, or to include the identification required by section 5(a)(5)(A) in any particular part of such a mail message (such as the subject line or body).
SECTION 14. APPLICATION TO WIRELESS.
(a) EFFECT ON OTHER LAW- Nothing in this Act shall be interpreted to preclude or override the applicability of section 227 of the Communications Act of 1934 (47 U.S.C. 227) or the rules prescribed under section 3 of the Telemarketing and Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6102).
(b) FCC RULEMAKING- The Federal Communications Commission, in consultation with the Federal Trade Commission, shall promulgate rules within 270 days to protect consumers from unwanted mobile service commercial messages. The Federal Communications Commission, in promulgating the rules, shall, to the extent consistent with subsection (c)--
(1) provide subscribers to commercial mobile services the ability to avoid receiving mobile service commercial messages unless the subscriber has provided express prior authorization to the sender, except as provided in paragraph (3);
(2) allow recipients of mobile service commercial messages to indicate electronically a desire not to receive future mobile service commercial messages from the sender;
(3) take into consideration, in determining whether to subject providers of commercial mobile services to paragraph (1), the relationship that exists between providers of such services and their subscribers, but if the Commission determines that such providers should not be subject to paragraph (1), the rules shall require such providers, in addition to complying with the other provisions of this Act, to allow subscribers to indicate a desire not to receive future mobile service commercial messages from the provider--
(A) at the time of subscribing to such service; and
(B) in any billing mechanism; and
(4) determine how a sender of mobile service commercial messages may comply with the provisions of this Act, considering the unique technical aspects, including the functional and character limitations, of devices that receive such messages.
(c) OTHER FACTORS CONSIDERED- The Federal Communications Commission shall consider the ability of a sender of a commercial electronic mail message to reasonably determine that the message is a mobile service commercial message.
(d) MOBILE SERVICE COMMERCIAL MESSAGE DEFINED- In this section, the term `mobile service commercial message' means a commercial electronic mail message that is transmitted directly to a wireless device that is utilized by a subscriber of commercial mobile service (as such term is defined in section 332(d) of the Communications Act of 1934 (47 U.S.C. 332(d))) in connection with such service.
SECTION 15. SEPARABILITY.
If any provision of this Act or the application thereof to any person or circumstance is held invalid, the remainder of this Act and the application of such provision to other persons or circumstances shall not be affected.
SECTION 16. EFFECTIVE DATE.
The provisions of this Act, other than section 9, shall take effect on January 1, 2004.
X. Telemarketing and Consumer Fraud and Abuse Prevention Act and Telemarketing Sales Rule
16 CFR Part 310: Telemarketing Sales Rule
Section
310.1 Scope of regulations in this part.
310.2 Definitions.
310.3 Deceptive telemarketing acts or practices.
310.4 Abusive telemarketing acts or practices.
310.5 Recordkeeping requirements.
310.6 Exemptions.
310.7 Actions by states and private persons.
310.8 Severability.
§ 310.1 Scope of regulations in this part.
This part implements the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101-6108.
§ 310.2 Definitions.
(a) Acquirer means a business organization, financial institution, or an agent of a business organization or financial institution that has authority from an organization that operates or licenses a credit card system to authorize merchants to accept, transmit, or process payment by credit card through the credit card system for money, goods or services, or anything else of value.
(b) Attorney general means the chief legal officer of a State.
(c) Cardholder means a person to whom a credit card is issued or who is authorized to use a credit card on behalf of or in addition to the person to whom the credit card is issued.
(d) Commission means the Federal Trade Commission.
(e) Credit means the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment.
(f) Credit card means any card, plate, coupon book, or other credit device existing for the purpose of obtaining money, property, labor, or services on credit.
(g) Credit card sales draft means any record or evidence of a credit card transaction.
(h) Credit card system means any method or procedure used to process credit card transactions involving credit cards issued or licensed by the operator of that system.
(i) Customer means any person who is or may be required to pay for goods or services offered through telemarketing.
(j) Investment opportunity means anything, tangible or intangible, that is offered, offered for sale, sold, or traded based wholly or in part on representations, either express or implied, about past, present, or future income, profit, or appreciation.
(k) Material means likely to affect a person's choice of, or conduct regarding, goods or services.
(l) Merchant means a person who is authorized under a written contract with an acquirer to honor or accept credit cards, or to transmit or process for payment credit card payments, for the purchase of goods or services.
(m) Merchant agreement means a written contract between a merchant and an acquirer to honor or accept credit cards, or to transmit or process for payment credit card payments, for the purchase of goods or services.
(n) Outbound telephone call means a telephone call initiated by a telemarketer to induce the purchase of goods or services.
(o) Person means any individual, group, unincorporated association, limited or general partnership, corporation, or other business entity.
(p) Prize means anything offered, or purportedly offered, and given, or purportedly given, to a person by chance. For purposes of this definition, chance exists if a person is guaranteed to receive an item and, at the time of the offer or purported offer, the telemarketer does not identify the specific item that the person will receive.
(q) Prize promotion means:
(1) A sweepstakes or other game of chance; or
(2) An oral or written express or implied representation that a person has won, has been selected to receive, or may be eligible to receive a prize or purported prize.
(r) Seller means any person who, in connection with a telemarketing transaction, provides, offers to provide, or arranges for others to provide goods or services to the customer in exchange for consideration.
(s) 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.
(t) Telemarketer means any person who, in connection with telemarketing, initiates or receives telephone calls to or from a customer.
(u) Telemarketing means a plan, program, or campaign which is conducted to induce the purchase of goods or services by use of one or more telephones and which involves more than one interstate telephone call. The term does not include the solicitation of sales through the mailing of a catalog which: contains a written description or illustration of the goods or services offered for sale; includes the business address of the seller; includes multiple pages of written material or illustrations; and has been issued not less frequently than once a year, when the person making the solicitation does not solicit 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. For purposes of the previous sentence, the term "further solicitation" does not include providing the customer with information about, or attempting to sell, any other item included in the same catalog which prompted the customer's call or in a substantially similar catalog.
§ 310.3 Deceptive telemarketing acts or practices.
(a) Prohibited deceptive telemarketing acts or practices. It is a deceptive telemarketing act or practice and a violation of this Rule for any seller or telemarketer to engage in the following conduct:
(1) Before a customer pays for goods or services offered, failing to disclose, in a clear and conspicuous manner, the following material information:
(i) The total costs to purchase, receive, or use, and the quantity of, any goods or services that are the subject of the sales offer;
(ii) All material restrictions, limitations, or conditions to purchase, receive, or use the goods or services that are the subject of the sales offer;
(iii) If the seller has a policy of not making refunds, cancellations, exchanges, or repurchases, a statement informing the customer that this is the seller's policy; or, if the seller or telemarketer makes a representation about a refund, cancellation, exchange, or repurchase policy, a statement of all material terms and conditions of such policy;
(iv) In any prize promotion, the odds of being able to receive the prize, and if the odds are not calculable in advance, the factors used in calculating the odds; that no purchase or payment is required to win a prize or to participate in a prize promotion; and the no purchase/no payment method of participating in the prize promotion with either instructions on how to participate or an address or local or toll-free telephone number to which customers may write or call for information on how to participate; and
(v) All material costs or conditions to receive or redeem a prize that is the subject of the prize promotion;
(2) Misrepresenting, directly or by implication, any of the following material information:
(i) The total costs to purchase, receive, or use, and the quantity of, any goods or services that are the subject of a sales offer;
(ii) Any material restriction, limitation, or condition to purchase, receive, or use goods or services that are the subject of a sales offer;
(iii) Any material aspect of the performance, efficacy, nature, or central characteristics of goods or services that are the subject of a sales offer;
(iv) Any material aspect of the nature or terms of the seller's refund, cancellation, exchange, or repurchase policies;
(v) Any material aspect of a prize promotion including, but not limited to, the odds of being able to receive a prize, the nature or value of a prize, or that a purchase or payment is required to win a prize or to participate in a prize promotion;
(vi) Any material aspect of an investment opportunity including, but not limited to, risk, liquidity, earnings potential, or profitability; or
(vii) A seller's or telemarketer's affiliation with, or endorsement by, any government or third-party organization;
(3) Obtaining or submitting for payment a check, draft, or other form of negotiable paper drawn on a person's checking, savings, share, or similar account, without that person's express verifiable authorization. Such authorization shall be deemed verifiable if any of the following means are employed:
(i) Express written authorization by the customer, which may include the customer's signature on the negotiable instrument; or
(ii) Express oral authorization which is tape recorded and made available upon request to the customer's bank and which evidences clearly both the customer's authorization of payment for the goods and services that are the subject of the sales offer and the customer's receipt of all of the following information:
(A) The date of the draft(s);
(B) The amount of the draft(s);
(C) The payor's name;
(D) The number of draft payments (if more than one);
(E) A telephone number for customer inquiry that is answered during normal business hours; and
(F) The date of the customer's oral authorization; or
(iii) Written confirmation of the transaction, sent to the customer prior to submission for payment of the customer's check, draft, or other form of negotiable paper, that includes:
(A) All of the information contained in §§ 310.3(a)(3)(ii)(A)-(F); and
(B) The procedures by which the customer can obtain a refund from the seller or telemarketer in the event the confirmation is inaccurate; and
(4) Making a false or misleading statement to induce any person to pay for goods or services.
(b) Assisting and facilitating. It is a deceptive telemarketing act or practice and a violation of this Rule for a person to provide substantial assistance or support to any seller or telemarketer when that person knows or consciously avoids knowing that the seller or telemarketer is engaged in any act or practice that violates §§ 310.3(a) or (c), or § 310.4 of this Rule.
(c) Credit card laundering. Except as expressly permitted by the applicable credit card system, it is a deceptive telemarketing act or practice and a violation of this Rule for:
(1) A merchant to present to or deposit into, or cause another to present to or deposit into, the credit card system for payment, a credit card sales draft generated by a telemarketing transaction that is not the result of a telemarketing credit card transaction between the cardholder and the merchant;
(2) Any person to employ, solicit, or otherwise cause a merchant or an employee, representative, or agent of the merchant, to present to or deposit into the credit card system for payment, a credit card sales draft generated by a telemarketing transaction that is not the result of a telemarketing credit card transaction between the cardholder and the merchant; or
(3) Any person to obtain access to the credit card system through the use of a business relationship or an affiliation with a merchant, when such access is not authorized by the merchant agreement or the applicable credit card system.
§ 310.4 Abusive telemarketing acts or practices.
(a) Abusive conduct generally. It is an abusive telemarketing act or practice and a violation of this Rule for any seller or telemarketer to engage in the following conduct:
(1) Threats, intimidation, or the use of profane or obscene language;
(2) Requesting or receiving payment of any fee or consideration for goods or services represented to remove derogatory information from, or improve, a person's credit history, credit record, or credit rating until:
(i) The time frame in which the seller has represented all of the goods or services will be provided to that person has expired; and
(ii) The seller has provided the person with documentation in the form of a consumer report from a consumer reporting agency demonstrating that the promised results have been achieved, such report having been issued more than six months after the results were achieved. Nothing in this Rule should be construed to affect the requirement in the Fair Credit Reporting Act, 15 U.S.C. 1681, that a consumer report may only be obtained for a specified permissible purpose;
(3) Requesting or receiving payment of any fee or consideration from a person, for goods or services represented to recover or otherwise assist in the return of money or any other item of value paid for by, or promised to, that person in a previous telemarketing transaction, until seven (7) business days after such money or other item is delivered to that person. This provision shall not apply to goods or services provided to a person by a licensed attorney; or
(4) Requesting or receiving payment of any fee or consideration in advance of obtaining a loan or other extension of credit when the seller or telemarketer has guaranteed or represented a high likelihood of success in obtaining or arranging a loan or other extension of credit for a person.
(b) Pattern of calls.
(1) It is an abusive telemarketing act or practice and a violation of this Rule for a telemarketer to engage in, or for a seller to cause a telemarketer to engage in, the following conduct:
(i) Causing any telephone to ring, or engaging any person in telephone conversation, repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number; or
(ii) Initiating an outbound telephone call to a person when that person previously has stated that he or she does not wish to receive an outbound telephone call made by or on behalf of the seller whose goods or services are being offered.
(2) A seller or telemarketer will not be liable for violating § 310.4(b)(1)(ii) if:
(i) It has established and implemented written procedures to comply with § 310.4(b)(1)(ii);
(ii) It has trained its personnel in the procedures established pursuant to § 310.4(b)(2)(i);
(iii) The seller, or the telemarketer acting on behalf of the seller, has maintained and recorded lists of persons who may not be contacted, in compliance with § 310.4(b)(1)(ii); and
(iv) Any subsequent call is the result of error.
(c) Calling time restrictions. Without the prior consent of a person, it is an abusive telemarketing act or practice and a violation of this Rule for a telemarketer to engage in outbound telephone calls to a person's residence at any time other than between 8:00 a.m. and 9:00 p.m. local time at the called person's location.
(d) Required oral disclosures. It is an abusive telemarketing act or practice and a violation of this Rule for a telemarketer in an outbound telephone call to fail to disclose promptly and in a clear and conspicuous manner to the person receiving the call, the following information:
(1) The identity of the seller;
(2) That the purpose of the call is to sell goods or services;
(3) The nature of the goods or services; and
(4) That no purchase or payment is necessary to be able to win a prize or participate in a prize promotion if a prize promotion is offered. This disclosure must be made before or in conjunction with the description of the prize to the person called. If requested by that person, the telemarketer must disclose the no-purchase/no-payment entry method for the prize promotion.
§ 310.5 Recordkeeping requirements.
(a) Any seller or telemarketer shall keep, for a period of 24 months from the date the record is produced, the following records relating to its telemarketing activities:
(1) All substantially different advertising, brochures, telemarketing scripts, and promotional materials;
(2) The name and last known address of each prize recipient and the prize awarded for prizes that are represented, directly or by implication, to have a value of $25.00 or more;
(3) The name and last known address of each customer, the goods or services purchased, the date such goods or services were shipped or provided, and the amount paid by the customer for the goods or services;
(4) The name, any fictitious name used, the last known home address and telephone number, and the job title(s) for all current and former employees directly involved in telephone sales; provided, however, that if the seller or telemarketer permits fictitious names to be used by employees, each fictitious name must be traceable to only one specific employee; and
(5) All verifiable authorizations required to be provided or received under this Rule.
(b) A seller or telemarketer may keep the records required by § 310.5(a) in any form, and in the manner, format, or place as they keep such records in the ordinary course of business. Failure to keep all records required by § 310.5(a) shall be a violation of this Rule.
(c) The seller and the telemarketer calling on behalf of the seller may, by written agreement, allocate responsibility between themselves for the recordkeeping required by this Section. When a seller and telemarketer have entered into such an agreement, the terms of that agreement shall govern, and the seller or telemarketer, as the case may be, need not keep records that duplicate those of the other. If the agreement is unclear as to who must maintain any required record(s), or if no such agreement exists, the seller shall be responsible for complying with §§ 310.5(a)(1)-(3) and (5); the telemarketer shall be responsible for complying with § 310.5(a)(4).
(d) In the event of any dissolution or termination of the seller's or telemarketer's business, the principal of that seller or telemarketer shall maintain all records as required under this Section. In the event of any sale, assignment, or other change in ownership of the seller's or telemarketer's business, the successor business shall maintain all records required under this Section.
§ 310.6 Exemptions.
The following acts or practices are exempt from this Rule:
(a) The sale of pay-per-call services subject to the Commission's "Trade Regulation Rule Pursuant to the Telephone Disclosure and Dispute Resolution Act of 1992," 16 CFR Part 308;
(b) The sale of franchises subject to the Commission's Rule entitled "Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures," 16 CFR Part 436;
(c) Telephone calls in which the sale of goods or services is not completed, and payment or authorization of payment is not required, until after a face-to-face sales presentation by the seller;
(d) Telephone calls initiated by a customer that are not the result of any solicitation by a seller or telemarketer;
(e) Telephone calls initiated by a customer in response to an advertisement through any media, other than direct mail solicitations; provided, however, that this exemption does not apply to calls initiated by a customer in response to an advertisement relating to investment opportunities, goods or services described in §§ 310.4(a)(2) or (3), or advertisements that guarantee or represent a high likelihood of success in obtaining or arranging for extensions of credit, if payment of a fee is required in advance of obtaining the extension of credit;
(f) Telephone calls initiated by a customer in response to a direct mail solicitation that clearly, conspicuously, and truthfully discloses all material information listed in § 310.3(a)(1) of this Rule for any item offered in the direct mail solicitation; provided, however, that this exemption does not apply to calls initiated by a customer in response to a direct mail solicitation relating to prize promotions, investment opportunities, goods or services described in §§ 310.4(a)(2) or (3), or direct mail solicitations that guarantee or represent a high likelihood of success in obtaining or arranging for extensions of credit, if payment of a fee is required in advance of obtaining the extension of credit; and
(g) Telephone calls between a telemarketer and any business, except calls involving the retail sale of nondurable office or cleaning supplies; provided, however, that § 310.5 of this Rule shall not apply to sellers or telemarketers of nondurable office or cleaning supplies.
§ 310.7 Actions by States and private persons.
(a) Any attorney general or other officer of a State authorized by the State to bring an action under the Telemarketing and Consumer Fraud and Abuse Prevention Act, and any private person who brings an action under that Act, shall serve written notice of its action on the Commission, if feasible, prior to its initiating an action under this Rule. The notice shall be sent to the Office of the Director, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580, and shall include a copy of the State's or private person's complaint and any other pleadings to be filed with the court. If prior notice is not feasible, the State or private person shall serve the Commission with the required notice immediately upon instituting its action.
(b) Nothing contained in this Section shall prohibit any attorney general or other authorized State official from proceeding in State court on the basis of an alleged violation of any civil or criminal statute of such State.
§ 310.8 Severability.
The provisions of this Rule are separate and severable from one another. If any provision is stayed or determined to be invalid, it is the Commission's intention that the remaining provisions shall continue in effect.
[1] See References in Text note below.
[2] Section 228 of the Communications Act of 1934 states:
(1) The term pay-per-call services means any service --
(A) In which any person provides or purports to provide --
(i) Audio information or audio entertainment produced or packaged by such person;
(ii) Access to simultaneous voice conversation services; or
(iii) Any service, including the provision of a product, the charges for which are assessed on the basis of the completion of the call;
(B) For which the caller pays a per-call or per-time-interval charge that is greater than, or in addition to, the charge for transmission of the call; and
(C) Which is accessed through use of a 900 telephone number or other prefix or area code designated by the (Federal Communications) Commission in accordance with subsection (b)(5) (47 U.S.C. 228(b)(5)).
(2) Such term does not include directory services provided by a common carrier or its affiliate or by a local exchange carrier or its affiliate, or any service the charge for which is tariffed, or any service for which users are assessed charges only after entering into a presubcription or comparable arrangement with the provider of such service.
[3] The standard for "clear and conspicuous" as used in this section shall be the standard enunciated by the Board of Governors of the Federal Reserve System in its Official Staff Commentary on Regulation Z, which requires simply that the disclosures be in a reasonably understandable form. See 12 CFR part 226, Supplement I, Comment 226.5(a)(1)-1.
[4] If a customer submits a billing error notice alleging either the nondelivery of goods or services or that information appearing on a billing statement has been reported incorrectly to the billing entity, the billing entity shall not deny the assertion unless it conducts a reasonable investigation and determines that the goods or services were actually delivered as agreed or that the information was correct. There shall be a rebuttable presumption that goods or services were actually delivered to the extent that a vendor or providing carrier produces documents prepared and maintained in the ordinary course of business showing the date on, and the place to, which the goods or services were transmitted or delivered.
