[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 868 Reported in House (RH)]
Union Calendar No. 9
103d CONGRESS
1st Session
H. R. 868
[Report No. 103-20]
_______________________________________________________________________
A BILL
To strengthen the authority of the Federal Trade Commission to protect
consumers in connection with sales made with a telephone, and for other
purposes.
_______________________________________________________________________
February 24, 1993
Committed to the Committee of the Whole House on the State of the Union
and ordered to be printed
Union Calendar No. 9
103d CONGRESS
1st Session
H. R. 868
[Report No. 103-20]
To strengthen the authority of the Federal Trade Commission to protect
consumers in connection with sales made with a telephone, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 4, 1993
Mr. Swift (for himself, Mr. Oxley, Ms. Lambert, and Mr. Gillmor)
introduced the following bill; which was referred to the Committee on
Energy and Commerce
February 24, 1993
Committed to the Committee of the Whole House on the State of the Union
and ordered to be printed
_______________________________________________________________________
A BILL
To strengthen the authority of the Federal Trade Commission to protect
consumers in connection with sales made with a telephone, and for other
purposes.
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 ``Consumer Protection Telemarketing
Act''.
SEC. 2. FINDINGS.
The Congress makes the following findings:
(1) Telemarketing differs from other sales activities in
that it can be carried out by sellers across State lines
without direct contact. Telemarketers can also be very mobile,
easily moving from State to State.
(2) Interstate telemarketing fraud has become a problem of
such magnitude that the resources of the Federal Trade
Commission are not sufficient to insure adequate consumer
protection from such fraud.
(3) Consumers and others are estimated to lose $10 billion
a year in telemarketing fraud.
(4) Consumers are victimized by other forms of
telemarketing deception and abuse.
(5) Consequently, Congress should enact legislation that
will offer consumers necessary protection from telemarketing
deception (including fraud) and abuse.
SEC. 3. TELEMARKETING RULES.
(a) In General.--
(1) The Commission shall prescribe rules prohibiting
deceptive (including fraudulent) telemarketing activities and
other abusive telemarketing activities.
(2) The Commission shall include in such rules respecting
deceptive telemarketing activities--
(A) a definition of deceptive telemarketing
activities, and
(B) criteria that are symptomatic of deceptive
telemarketing as distinguished from ordinary
telemarketing business practices.
(3) The Commission shall include in such rules respecting
other abusive telemarketing activities a requirement that
telemarketers may not undertake a pattern of unsolicited
telephone calls which the reasonable consumer would consider
coercive or abusive of such consumer's right to privacy. In
prescribing the rules described in this paragraph, the
Commission shall consider--
(A) including a requirement that goods or services
offered by telemarketing be shipped or provided within
a specified period and that if the goods or services
are not shipped or provided within such period, a
refund be required, and
(B) including, where practicable, authority for a
person who orders a good or service through
telemarketing to cancel the order within a specified
period.
(b) Rulemaking.--
(1) The Commission shall prescribe the rules under
subsection (a) within 270 days after the date of enactment of
this Act. Such rules shall be prescribed in accordance with
section 553 of title 5, United States Code.
(2) A rule issued under subsection (a) shall be considered
a rule issued under section 18(a)(1)(B) of the Federal Trade
Commission Act.
(c) Enforcement.--Any violation of any rule prescribed under
subsection (a) shall be treated as a violation of a rule under section
5 of the Federal Trade Commission Act (15 U.S.C. 45) regarding unfair
or deceptive acts or practices.
SEC. 4. 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 of
telemarketing which violates any rule of the Commission under section
3, the State may bring a civil action on behalf of its residents in an
appropriate district court of the United States to enjoin such
telemarketing, to enforce compliance with such rule of the Commission,
to obtain damages, restitution, or other compensation on behalf of
residents of such State, 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) 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) Construction.--For purposes of bringing any civil action under
subsection (a), nothing in this Act shall prevent an 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.
(d) Actions by the Commission.--Whenever the Commission has
instituted a civil action for violation of any rule prescribed under
section 3, no State may, during the pendency of such action instituted
by the Commission, institute a civil action under subsection (a)
against any defendant named in the Commission's complaint for acts or
omissions alleged in the complaint for violation of any rule as alleged
in the Commission's complaint.
(e) 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 civil or criminal statute
of such State.
(2) In addition to actions brought by an attorney general
of a State under subsection (a), 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) against persons that the Commission has
determined have or are engaged in a pattern or practice of
telemarketing which violates a rule of the Commission under
section 3.
SEC. 5. ACTIONS BY PRIVATE PERSONS.
(a) In General.--Any person adversely affected by any pattern or
practice of telemarketing which violates any rule of the Commission
under section 3 or an authorized person acting on such person's behalf
may, within 3 years after discovery of the violation, bring a civil
action in an appropriate district court of the United States against a
person who has engaged or is engaging in such pattern or practice of
telemarketing if the amount in controversy exceeds the sum or value of
$50,000 in actual damages for each person adversely affected by such
telemarketing. Such an action may be brought to enjoin such
telemarketing, to enforce compliance with any rule of the Commission
under section 3, to obtain damages, or to obtain such further and other
relief as the court may deem appropriate.
(b) Notice.--The plaintiff shall serve prior written notice of the
action upon the Commission and provide the Commission with a copy of
its complaint, except in any case where such prior notice is not
feasible, in which case the person shall serve such notice immediately
upon instituting such action. The Commission shall have the right (A)
to intervene in the action, (B) upon so intervening, to be heard on all
matters arising therein, and (C) to file petitions for appeal.
(c) Actions by the Commission.--Whenever the Commission has
instituted a civil action for violation of any rule prescribed under
section 3, no person 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.
(d) Costs and Fees.--The court, in issuing any final order in any
action brought under subsection (a), may award costs of suit and
reasonable fees for attorneys and expert witnesses to the prevailing
party.
(e) Construction.--Nothing in this section shall restrict any right
which any person may have under any statute or common law.
SEC. 6. CLEARINGHOUSE.
(a) In General.--The Commission shall establish a clearinghouse for
inquiries made to Federal agencies concerning telemarketing. The
clearinghouse will provide information (other than information which
may not be disclosed under section 552(b) of title 5, United States
Code, or under regulations prescribed by the Commission to implement
such section) to anyone making inquiries respecting persons engaged in
telemarketing or direct such inquiries to the appropriate Federal or
State agency.
(b) Liability for Providing Information.--No person who provides
information to the clearinghouse established under subsection (a) shall
be liable for damages for the provision of such information unless such
person provided such information knowing it to be false.
SEC. 7. ADMINISTRATION AND APPLICABILITY OF ACT.
(a) In General.--Except as otherwise provided in sections 4 and 5,
this Act 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 Act.
(b) Actions by the Commission.--The Commission shall prevent any
person from violating a rule of the Commission under section 3 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 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 Act.
SEC. 8. DEFINITIONS.
For purposes of this Act:
(1) The term ``attorney general'' means the chief legal
officer of a State.
(2) The term ``Commission'' means the Federal Trade
Commission.
(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 ``telemarketing'' means a plan, program, or
campaign which is conducted to induce purchases of goods or
services by significant 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--
(A) contains a written description or illustration
of the goods or services offered for sale,
(B) includes the business address of the seller,
(C) includes multiple pages of written material or
illustrations, and
(D) has been issued not less frequently than once a
year,
where 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.
SEC. 9. REVIEW.
Upon the expiration of 5 years following the date of the enactment
of this Act, the Federal Trade Commission shall review the
implementation of this Act and its effect on deceptive telemarketing
activities and report the results of the review to the Congress.