15 U.S.C. § 5711 — Federal Trade Commission regulations

Page 2211 TITLE 15—COMMERCE AND TRADE § 5711 (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 pro- tect the public interest. (4) The lack of nationally uniform regu- latory guidelines has led to confusion for call- ers, subscribers, industry participants, and regulatory agencies as to the rights of callers and the oversight responsibilities of regu- latory 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 mis- leading 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 de- scriptiveness of vendor advertisements become crucial in avoiding consumer abuse. The obli- gation for accuracy should include price-per- call and duration-of-call information, odds dis- closure 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 con- sumer confidence that unfair and deceptive be- havior will be effectively curtailed and that consumers will have adequate rights of re- dress. (8) Vendors of telephone-billed goods and services must also feel confident in their rights and obligations for resolving billing dis- putes if they are to use this new marketplace for the sale of products of more than nominal value. (Pub. L. 102–556, § 1, Oct. 28, 1992, 106 Stat. 4181.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (a), was in the original ‘‘this Act’’, meaning Pub. L. 102–556, Oct. 28, 1992, 106 Stat. 4181, which enacted this chapter and sec- tion 228 of Title 47, Telecommunications, amended sec- tions 227 and 302a of Title 47, enacted provisions set out as a note under section 302a of Title 47, and amended provisions set out as a note under section 227 of Title 47. For complete classification of this Act to the Code, see Tables. SUBCHAPTER I—REGULATION OF UNFAIR AND DECEPTIVE ACTS AND PRACTICES IN CONNECTION WITH PAY-PER-CALL SERVICES § 5711. Federal Trade Commission regulations (a) In general (1) Advertising regulations The Commission shall prescribe rules in ac- cordance with this subsection to prohibit un- fair 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 trans- ferred; (B) in the case of an advertisement which offers a prize or award or a service or prod- uct at no cost or for a reduced cost, clearly 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, dis- close 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 ap- proved 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 pri- marily to individuals under the age of 18, clearly and conspicuously state in such ad- vertising 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 advertise- ments 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) dis- played 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 audi- ble 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 re- quire that each provider of pay-per-call serv- ices— (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 trans- ferred; (iii) informs the caller that charges for the call begin at the end of the introduc- tory message; Page 2212 TITLE 15—COMMERCE AND TRADE § 5712 (iv) informs the caller that parental con- sent is required for calls made by children; and (v) in the case of a pay-per-call service that is not operated or expressly author- ized 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 ap- proved by any Federal agency; (B) enable the caller to hang up at or be- fore 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 subpara- graph (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 un- derstood to be toll free; (G) be prohibited from billing consumers in excess of the amounts described in the in- troductory 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 com- mon 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 car- rier relating to the arrangements (other than for the provision of local exchange service) be- tween 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 pro- hibit unfair or deceptive acts or practices that evade such rules or undermine the rights pro- vided to customers under this subchapter, in- cluding through the use of alternative billing or other procedures. (5) Exemptions The regulations prescribed by the Commis- sion 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 re- quired by such regulations, subject to the re- quirements of paragraph (2)(E); or (B) pay-per-call services provided at nomi- nal charges, as defined by the Commission in such regulations. (6) Consideration of other rules required In conducting a proceeding under this sec- tion, 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 appro- priate and clear signal during a live inter- active 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 dis- closures required by such subparagraphs, clearly and conspicuously disclose that use of the telephone number may result in a substan- tial 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) within 270 days after Octo- ber 28, 1992. Such rules shall be prescribed in ac- cordance with section 553 of title 5. (c) Enforcement Any violation of any rule prescribed under subsection (a) shall be treated as a violation of a rule respecting unfair or deceptive acts or practices under section 45 of this title. Notwith- standing section 45(a)(2) of this title, commu- nications common carriers shall be subject to the jurisdiction of the Commission for purposes of this subchapter. (Pub. L. 102–556, title II, § 201, Oct. 28, 1992, 106 Stat. 4187.) § 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