Congressional Panel Excludes Retailers From Calling Card Regulations

NACS secures protections for innocent retailers and distributors in a legislative crack down on fraudulent calling cards.

March 25, 2010

WASHINGTON - Retailers and innocent distributors of pre-paid telephone calling cards that do not contain the minutes advertised, are governed by incomprehensible rules or are marketed using deceptive practices will not be subject to enforcement activities, under a bill that the House of Representatives Subcommittee on Commerce, Trade and Consumer Protection acted on yesterday.

In a legislative mark-up (a business meeting during which legislators vote on legislation and proposed changes to legislation) yesterday, the subcommittee voted unanimously to amend H.R. 3993, the Calling Card Consumer Protection Act, to ensure that innocent parties who have no control over the production or marketing materials associated with pre-paid calling cards would not be subject to the enforcement provisions associated with fraudulent or deceptive products. These parties will still be subject to injunction and required to remove such calling cards from commerce.

NACS pursued this amendment after the House of Representatives inexplicably stripped such protections from similar legislation that passed in the previous Congress. The amendment, offered by Subcommittee Chairman Bobby Rush (D-IL) and supported by ranking member Rep. Ed Whitfield (R-KY), states clearly that the pre-paid calling card distributors covered by the legislation "shall not include any retail seller whose only activity with respect to the sale of prepaid calling cards is point of sale transaction with end-user customers" or "any person whose only activity with respect to the sale of prepaid calling cards is the transport or delivery of such cards."

During a subcommittee hearing in the previous Congress, NACS Vice President of Government Relations John Eichberger urged Congress to protect both retailers and innocent, third-party distributors ?" both of whom have no control over the content of the calling cards nor, in most cases, the marketing materials associated with them. When the legislation was changed prior to passing the House, NACS pressed Congress to reaffirm the protections for innocent parties.

The amendment adopted yesterday lessened the threat of contradictory regulatory provisions at the federal, state and local levels by pre-empting all applicable laws and regulations that conflict with the provisions of the legislation.

H.R. 3993 must now be voted on by the entire House Energy and Commerce Committee before being considered by the full House of Representatives and then the Senate. While there remains a long way to go before enactment, the resolution of NACS concerns yesterday do not appear to be in jeopardy of changing at any point in the process.

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