BILL ANALYSIS
AB 2244
Page 1
ASSEMBLY THIRD READING
AB 2244 (Wayne)
As Amended May 13, 2002
Majority vote
BUSINESS AND PROFESSIONS 8-1
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|Ayes:|Correa, Cardenas, | | |
| |Goldberg, Corbett, | | |
| |Kelley, Koretz, Leach, | | |
| |Thomson | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bogh | | |
| | | | |
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SUMMARY : Mandates additional disclosure requirements and
protections for charges related to prepaid calling cards, and
also requires that disclosures be in both English and Spanish.
Specifically, this bill :
1)Expands the scope of charges that must be disclosed on a
prepaid calling card or packaging to include: surcharges;
taxes; other periodic fees; maintenance fees; connection fees;
payphone surcharges; international surcharges; and, surcharges
of other periods of use.
2)Requires that all specified charges, rates, minimum charges,
definitions, policies, and customer service number be printed
on the card or packaging, and made clearly and conspicuously
available in a prominent area immediately proximate to the
point of sale.
3)Requires that if a language other than English is used on the
card or packaging to provide dialing instructions to place a
call or contact customer service, then specified disclosures
must be provided in that same language at the point of sale.
4)Requires that if a language other than English is used in the
advertising or promotion of the card or service, or is used on
the card or packaging other than for dialing instructions,
then specified disclosures must be provided in that language
on the card or packaging and in the point of sale disclosure.
AB 2244
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5)Requires that companies provide pay telephone users of prepaid
calling cards or services with reasonable time to terminate a
call after notification of applicable payphone surcharges
without incurring any cost for the call.
6)Requires that toll-free customer service numbers have
sufficient capacity and staffing to accommodate a reasonably
anticipated number of calls without incurring a busy signal or
undue delay.
7)Prohibits a company from imposing any fee or surcharge that is
not disclosed as required or exceeds the amount disclosed.
8)Prohibits a company from imposing a charge if the consumer is
not connected to the number called.
9)Makes other clarifying or non-substantive amendments.
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of this bill: This bill is intended to provide
additional consumer protections for users of prepaid calling
cards. It broadens the list of charges that must be
disclosed, ensures that appropriate disclosures are made in
the languages used, and creates four new requirements:
customer service phone centers must be adequately staffed;
undisclosed fees cannot be charged; consumers cannot be
charged for unconnected calls; and, payphone callers must be
old about surcharges and provided adequate time to end the
call without charge.
2)Arguments in support: According to the author, "prepaid phone
cards with hidden fees and surcharges are being sold to
unsuspecting consumers? Consumers should know what product
they are getting prior to purchase. AB 2244 addresses this
problem by tightening current law to require specific
disclosures at the point of sale? [because] these cards are
being aggressively marketed in Spanish, the bill also requires
that point of sale disclosures be made in Spanish."
Some common fees and surcharges that are not adequately
disclosed include: service fees applied daily, weekly or
AB 2244
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monthly; per-call connection fees, some of which are applied
even if the call is not successfully connected; and,
surcharges for using the card through a payphone.
The author further states that, "The California Public Utilities
Commission reports that hundreds of complaints related to
prepaid phone cards have been filed in the last few years.
For a variety of reasons, it is likely that the number of
unreported claims in much higher. AB 2244 is a reasonable
step that will protect consumers without creating a negative
impact on the prepaid phone card industry, which, for the most
part, is providing a helpful service to consumers."
3)Arguments in opposition: MCIWorldCom has argued that the
provisions to disclose taxes as well as surcharges for
international calls are an undue regulatory burden. Regarding
the international surcharge, they argue that, "this would not
be feasible in light of the vast number of countries and
different surcharges ($1-$2). Furthermore, the specific
surcharge and rate is available through the customer service
number noted on the card." As for tax disclosure, federal
taxes are included in the rates. However, opponents claim
that it would be "impossible to note any state or local taxes,
again because the cards are produced for national distribution
and because those taxes would be constantly changing."
Amendments taken in policy committee have removed much of the
prior opposition, with the remaining opponent and the author's
office pledged to drafting additional amendments that will
resolve the final opposition.
4)Related legislation: AB 1994 (Bowen), Chapter 802, Statutes
of 1998, required various cost disclosures for prepaid calling
cards, their packaging and/or their displays, while mandating
a 24-hour customer service number, a default expiration date,
and a refund for non-working cards.
Analysis Prepared by : Hank Dempsey / B. & P. / (916)
319-3301FN: 0004657