BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2244|
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THIRD READING
Bill No: AB 2244
Author: Wayne (D), et al
Amended: 6/29/02 in Senate
Vote: 21
SENATE BUSINESS & PROFESSIONS COMMITTEE : 7-0, 6/10/02
AYES: Figueroa, Johannessen, Machado, Morrow, Murray,
O'Connell, Polanco
SENATE ENERGY, U.&C. COMMITTEE : 7-1, 6/25/02
AYES: Bowen, Morrow, Alarcon, Dunn, Murray, Sher,
Vasconcellos
NOES: Battin
ASSEMBLY FLOOR : 60-12, 5/20/02 - See last page for vote
SUBJECT : Prepaid calling cards and services
SOURCE : Author
DIGEST : This bill expands the disclosure of prepaid
calling card fees or charges, adds restrictions on how fees
or charges are imposed and how a prepaid calling card
company operates its required customer service telephone
number, and requires that mandated disclosures be made in
any language that is used on the prepaid card, its
packaging, advertising or promotion.
ANALYSIS : Existing law:
1. Regulates the sale of prepaid telecommunications
CONTINUED
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(telephone) calling cards and services, as defined.
2. Requires prepaid calling card price advertisements
to disclose any applicable geographical limitations
and any additional surcharges or fees.
3. Requires a company that provides or issues prepaid
calling cards and services to disclose on the card
or packaging, and requires a vendor who sells the
card to disclose in a prominent area at the point
of sale, the following information: (a) any
surcharges or fees including monthly fees, (b)
per-call access fees, (c) surcharges for the first
minute of use applicable to calls within the United
States, (d) whether there are additional or
different rates or unit values applicable to
international calls, (e) the definition of "unit"
if applicable, (f) the minimum charge per call, (g)
the charge for calls that do not connect, if any,
(h) the billing decrement, (i) the calling card
company name, (j) the recharge, refund, and
expiration policies, if any, and (k) the 24-hour
customer service toll-free telephone number.
This bill:
1. Expands the list of specified fees and charges that
must be disclosed to include: value of the card,
surcharges, taxes, periodic fees in addition to
monthly fees, maintenance fees, pay telephone
surcharges, the surcharges for periods of use in
addition to the first minute for calls within the
United States, and surcharges for international
calls or in lieu of disclosing each surcharge, the
highest surcharge for any international call
applicable on that card.
2. Requires that the above fees or charges, together
with the other information that is already required
to be disclosed by current law in a prominent area
at the point of sale by a vendor, also be disclosed
"clearly and conspicuously" and "immediately
proximate" to the point of sale.
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3. Requires that if a language other than English is
used on the card or packaging to provide dialing
instructions or to contact customer service, then
the required disclosure of fees and other
information must also be provided in that language
in the required point of sale disclosure.
4. Requires that if a language other than English is
used in card advertising or promotions, or on the
card or packaging itself, other than for dialing
instructions, then the required disclosure of fees
and other information must also be made in that
language on the card or packaging and in the
required point of sale disclosure.
5. Requires that the company's toll-free customer
service number have sufficient capacity and
staffing to accommodate a reasonably anticipated
number of calls without incurring a busy signal or
undue wait. Requires the company to provide
customer service in each language used on a prepaid
calling card or its packaging and in the
advertising or promotion of the prepaid calling
card or prepaid calling services.
6. Prohibits a company from imposing a fee or
surcharge related to obtaining customer service,
including any charge related to connecting with the
customer service number or waiting to speak to a
live operator.
7. Requires that a company provide pay telephone users
of prepaid calling cards or services with a
reasonable time to terminate a call after being
given notification of any applicable pay phone
surcharges without incurring any charge for the
call.
8. Prohibits a company from imposing a fee or
surcharge that is not disclosed as required or that
exceeds the amount disclosed by the company.
9. Prohibits a company from imposing any charge if the
consumer is not connected to the number called.
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Clarifies that the customer shall not be considered
connected if there is a busy signal or the call is
unanswered.
10.Requires that the value of the card and the amount
of the various charges, however denominated, that
are required to be disclosed shall be expressed in
the same format. If the value of a card is
expressed in minutes, the minutes shall be
identified as domestic or international and the
identification shall be printed on the same line or
next line as the value of the card in minutes.
11.Provides that prepaid calling cards that are in
compliance with current disclosure requirements may
be sold to the public until July 1, 2003.
12.Makes other clarifying or technical changes to the
law.
Comments
This bill is sponsored by the author to strengthen and
increase the disclosures consumers receive regarding
the purchase and use of prepaid calling cards. The
bill is also intended to provide the disclosures to
consumers in a language they can understand and which
is used by the calling card company to give the
dialing/use instructions and in its advertising to
consumers to induce them to buy the cards. The bill
broadens the list of disclosable charges so that
consumers will have a more accurate idea of the actual
cost. The bill requires adequate staffing of customer
service numbers, provides that undisclosed fees cannot
be charged, prohibits charges for unconnected calls,
and provides payphone users with sufficient time to
disconnect and avoid charges once they are told what
the charges will be.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/25/02) (unable to re-verify due to
time constraints)
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California Attorney General
Office of Ratepayer Advocates of the California Public
Utilities Commission
United Farmworkers of America, AFL-CIO
Consumer Action
Consumers Union
Service Employees International Union, AFL-CIO, CLC
Older Women's League of California
ARGUMENTS IN SUPPORT : According to the author, prepaid
calling cards with hidden fees and surcharges are being
sold to unsuspecting consumers. The author and proponents
argue that consumers should be able to know what product
they are getting prior to its purchase - so that they can
know the actual costs of the card and can comparison shop
for prepaid phone services. The author also states that
the California Public Utilities Commission reports that
hundreds of complaints related to prepaid phone cards have
been filed with them over the last few years. The author
states that the bill addresses the problem of hidden
charges by tightening and broadening current law to require
that information regarding additional types of surcharges
and fees are disclosed both on the card and at the point of
sale. Further, the bill will make these disclosures more
understandable by requiring them to be made in the same
language that is used to market them and on instructions
for how to use them.
Currently, the author and proponents argue that some common
fees associated with these cards are not adequately
disclosed. These include service fees that are applied
daily, weekly or monthly and can range from three cents to
50 cents per day, 12 cents to $1 weekly, or 50 cents to $2
monthly. Also there are per-call connection fees ranging
from 25 cents to $2.50, sometimes when a call is not even
connected, and also payphone surcharges for making a
payphone call using the prepaid calling card. The bill
will require disclosure of the existence of, and
particularly the amount of these fees, which the consumer
may not have known will use up a card's useable calling
minutes faster than anticipated.
The author and proponents also argue that the bill's
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disclosures should help to prevent surprising fees that
detract from the value of the prepaid calling card services
that are purchased. Further, the author and proponents
believe the bill will require prepaid calling card
companies to fully honor the spirit of the existing law
requirements to maintain a customer service phone line by
requiring it to be adequately staffed and have sufficient
call capacity to respond to the number of anticipated
consumer calls.
ASSEMBLY FLOOR :
AYES: Aanestad, Alquist, Aroner, Bates, Briggs, Calderon,
John Campbell, Canciamilla, Cardenas, Cardoza, Chan,
Chavez, Chu, Corbett, Correa, Cox, Daucher, Diaz,
Dickerson, Dutra, Firebaugh, Florez, Frommer, Goldberg,
Harman, Havice, Jackson, Keeley, Kehoe, Kelley, Koretz,
Leach, Leslie, Liu, Longville, Lowenthal, Maddox,
Maldonado, Matthews, Migden, Nakano, Nation, Negrete
McLeod, Oropeza, Robert Pacheco, Papan, Pavley, Reyes,
Richman, Salinas, Simitian, Steinberg, Strickland,
Strom-Martin, Thomson, Vargas, Wayne, Wiggins, Wyland,
Wesson
NOES: Ashburn, Bogh, Bill Campbell, Cogdill,
Hollingsworth, Leonard, Mountjoy, Rod Pacheco, Pescetti,
Runner, Wyman, Zettel
CP:sl 6/29/02 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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