BILL ANALYSIS
AB 2244
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2244 (Wayne)
As Amended June 29, 2002
Majority vote
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|ASSEMBLY: |60-12|(May 20, 2002) |SENATE: |26-9 |(August |
| | | | | |14,2002) |
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Original Committee Reference: B. & P.
SUMMARY : Mandates additional disclosures of charges and other
protections related to prepaid calling cards, and also requires
that disclosures and customer service be provided, as specified,
in English or any other language used in the card's instructions
or promotion.
The Senate amendments :
1)Permit surcharges for international calls to be disclosed as
the highest surcharge for any international calls applicable
on that card.
2)Require the value of the card to be legibly printed on the
card and also be made conspicuously available near the point
of sale.
3)Require customer service to be provided in each language used
on a prepaid calling card or in its advertising or promotion.
4)Prohibit 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.
5)Provide a definition of non-connection, for which consumers
may not be charged.
6)Require the value of the card and the various charges to be
disclosed in the same format (i.e., dollars, domestic minutes,
international minutes).
7)Permit prepaid calling cards that were in compliance before
enactment of this bill to be sold to the public until July 1,
AB 2244
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2003.
AS PASSED BY THE ASSEMBLY , this bill generally mandated
additional disclosure requirements and protections for charges
related to prepaid calling cards, and also required that
disclosures be made in English or any other language used in the
card's advertising or dialing instructions.
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 language used, and creates five new requirements: customer
service phone centers must be adequately staffed and with the
appropriate languages spoken; undisclosed fees cannot be
charged; consumers cannot be charged for unconnected or
customer service calls; the value of the card and the various
surcharges must be disclosed in the same format; and, payphone
callers must be told about any payphone surcharge and be
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..."
Some common fees and surcharges that are not adequately
disclosed include: service fees applied daily, weekly or
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 are 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
AB 2244
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part, is providing a helpful service to consumers."
3)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) 319-3301
FN: 0005897