House Panel Passes Disclosure Bill for Prepaid Calling Cards

WASHINGTON -(Dow Jones)- A House panel on Tuesday approved a bill to set universal disclosure standards on rates and other terms for prepaid calling cards.

Lawmakers want to stop small companies that repeatedly dupe low-income or non-English-speaking customers on available minutes. A similar bill is pending in the Senate.

Congress is concerned about hidden fees, printed in near illegible type, that can cause callers to lose up to half of the advertised minutes on a card. In one example of misleading marketing, staffers have found companies that market prepaid calling cards in non-English languages and print the disclosures only in English.

The House Energy and Commerce's Subcommittee on Commerce, Trade, and Consumer Protection unanimously approved the bill without changes sought by the Federal Trade Commission and committee Republicans.

Any changes to the legislation will be worked out before the full committee considers the bill. The vote in full committee could occur as early as next week.

Subcommittee Chairman Bobby Rush, D-Ill., said the next version of the bill might include a "narrow preemption clause" for states. In states with laws on prepaid phone cards, he said, consumers "need streamlined disclosure" rules that don't differ widely from a federal standard.

Meanwhile, the FTC is seeking authority to enforce the disclosure rules for traditional "common carrier" phone companies that normally fall under the jurisdiction of the Federal Communications Commission.

To the extent that lawmakers are willing to consider the FTC's request, they would likely give FTC narrow authority that wouldn't impose dual policing entities on traditional phone companies. "We need to work out terms where common carriers meet these disclosures despite their general exemption" from FTC governance, Rush said.

The FTC also wants to extend the disclosure protections to wireless providers. Both Republicans and Democrats object to that request, saying wireless issues differ widely from landline connections.

Telecommunications Subcommittee Chairman Edward Markey, D-Mass., also is working on a broader wireless bill that could address deceptive marketing for wireless phone cards.

-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 16th September 2008