PART 308—TRADE REGULATION RULE PURSUANT TO THE TELEPHONE DISCLOSURE AND DISPUTE RESOLUTION ACT OF 1992 Authority: Pub. L. 102-556, 106 Stat. 4181 (15 U.S.C. 5701, et seq. Source: 58 FR 42400, Aug. 9, 1993, unless otherwise noted. § 308.1 Scope of regulations in this part. This rule implements titles II and III of the Telephone Disclosure and Dispute Resolution Act of 1992, to be codified in relevant part at 15 U.S.C. 5711-14, 5721-24. § 308.2 Definitions. (a) Bona fide educational service (b) Commission (c) Pay-per-call service 1 1 (1) The term pay-per-call services (A) In which any person provides or purports to provide— (i) Audio information or audio entertainment produced or packaged by such person; (ii) Access to simultaneous voice conversation services; or (iii) Any service, including the provision of a product, the charges for which are assessed on the basis of the completion of the call; (B) For which the caller pays a per-call or per-time-interval charge that is greater than, or in addition to, the charge for transmission of the call; and (C) Which is accessed through use of a 900 telephone number or other prefix or area code designated by the (Federal Communications) Commission in accordance with subsection (b)(5) (47 U.S.C. 228(b)(5)). (2) Such term does not include directory services provided by a common carrier or its affiliate or by a local exchange carrier or its affiliate, or any service the charge for which is tariffed, or any service for which users are assessed charges only after entering into a presubcription or comparable arrangement with the provider of such service. (d) Person (e)(1) Presubscription or comparable arrangement (i) The service provider clearly and conspicuously discloses to the consumer all material terms and conditions associated with the use of the service, including the service provider's name and address, a business telephone number which the consumer may use to obtain additional information or to register a complaint, and the rates for the service; (ii) The service provider agrees to notify the consumer of any future rate changes; (iii) The consumer agrees to utilize the service on the terms and conditions disclosed by the service provider; and (iv) The service provider requires the use of an identification number or other means to prevent unauthorized access to the service by nonsubscribers. (2) Disclosure of a credit card or charge card number, along with authorization to bill that number, made during the course of a call to a pay-per-call service shall constitute a presubscription or comparable arrangement if the credit or charge card is subject to the dispute resolution requirements of the Fair Credit Billing Act and the Truth in Lending Act, as amended. No other action taken by the consumer during the course of a call to a pay-per-call service can be construed as creating a presubscription or comparable arrangement. (f) Program-length commercial (g) Provider of pay-per-call services (h) Reasonably understandable volume (i) Service bureau (j) Slow and deliberate manner (k) Sweepstakes, § 308.3 Advertising of pay-per-call services. (a) General requirements. (1) The disclosures shall be made in the same language as that principally used in the advertisement. (2) Television video and print disclosures shall be of a color or shade that readily contrasts with the background of the advertisement. (3) In print advertisements, disclosures shall be parallel with the base of the advertisement. (4) Audio disclosures, whether in television or radio, shall be delivered in a slow and deliberate manner and in a reasonably understandable volume. (5) Nothing contrary to, inconsistent with, or in mitigation of, the required disclosures shall be used in any advertisement in any medium; nor shall any audio, video or print technique be used that is likely to detract significantly from the communication of the disclosures. (6) In any program-length commercial, required disclosures shall be made at least three times (unless more frequent disclosure is otherwise required) near the beginning, middle and end of the commercial. (b) Cost of the call. (i) If there is a flat fee for the call, the advertisement shall state the total cost of the call. (ii) If the call is billed on a time-sensitive basis, the advertisement shall state the cost per minute and any minimum charges. If the length of the program can be determined in advance, the advertisement shall also state the maximum charge that could be incurred if the caller listens to the complete program. (iii) If the call is billed on a variable rate basis, the advertisement shall state, in accordance with § 308.3(b)(1) (i) and (ii), the cost of the initial portion of the call, any minimum charges, and the range of rates that may be charged depending on the options chosen by the caller. (iv) The advertisement shall disclose any other fees that will be charged for the service. (v) if the caller may be transferred to another pay-per-call service, the advertisement shall disclose the cost of the other call, in accordance with § 308.3(b)(1) (i), (ii), (iii), and (iv). (2) For purposes of § 308.3(b), disclosures shall be made “clearly and conspicuously” as set forth in § 308.3(a) and as follows: (i) In a television or videotape advertisement, the video disclosure shall appear adjacent to each video presentation of the pay-per-call number. However, in an advertisement displaying more than one pay-per-call number with the same cost, the video disclosure need only appear adjacent to the largest presentation of the pay-per-call number. Each letter or numeral of the video disclosure shall be, at a minimum, one-half the size of each letter or numeral of the pay-per-call number to which the disclosure is adjacent. In addition, the video disclosure shall appear on the screen for the duration of the presentation of the pay-per-call number. An audio disclosure shall be made at least once, simultaneously with a video presentation of the disclosure. However, no audio presentation of the disclosure is required in: (A) An advertisement fifteen (15) seconds or less in length in which the pay-per-call number is not presented in the audio portion, or (B) an advertisement in which there is no audio presentation of information regarding the pay-per-call service, including the pay-per-call number. In an advertisement in which the pay-per-call number is presented only (ii) In a print advertisement, the disclosure shall be placed adjacent to each presentation of the pay-per-call number. However, in an advertisement displaying more than one pay-per-call number with the same cost, the disclosure need only appear adjacent to the largest presentation of the pay-per-call number. Each letter or numeral of the disclosure shall be, at a minimum, one-half the size of each letter or numeral of the pay-per-call number to which the disclosure is adjacent. (iii) In a radio advertisement, the disclosure shall be made at least once, and shall be delivered immediately following the first delivery of the pay-per-call number. In a program-length commercial, the disclosure shall be delivered immediately following each delivery of the pay-per-call number. (c) Sweepstakes; games of chance. (2) For purposes of § 308.3(c), disclosures shall be made “clearly and conspicuously” as set forth in § 308.3(a) and as follows: (i) In a television or videotape advertisement, the disclosures may be made in either the audio or video portion of the advertisement. If the disclosures are made in the video portion, they shall appear on the screen in sufficient size and for sufficient time to allow consumers to read and comprehend the disclosures. (ii) In a print advertisement, the disclosures shall appear in a sufficient size and prominence and such location to be readily noticeable, readable and comprehensible. (d) Federal programs. (2) For purposes of § 308.3(d), disclosures shall be made “clearly and conspicuously” as set forth in § 308.3(a) and as follows: (i) In a television or videotape advertisement, the disclosure may be made in either the audio or video portion of the advertisement. If the disclosure is made in the video portion, it shall appear on the screen in sufficient size and for sufficient time to allow consumers to read and comprehend the disclosure. The disclosure shall begin within the first fifteen (15) seconds of the advertisement. (ii) In a print advertisement, the disclosure shall appear in a sufficient size and prominence and such location to be readily noticeable, readable and comprehensible. The disclosure shall appear in the top one-third of the advertisement. (iii) In a radio advertisement, the disclosure shall begin within the first fifteen (15) seconds of the advertisement. (e) Prohibition on advertising to children. (2) For the purposes of this regulation, advertisements directed to children under 12 shall include: any pay-per-call advertisement appearing during or immediately adjacent to programming for which competent and reliable audience composition data demonstrate that more than 50% of the audience is composed of children under 12, and any pay-per-call advertisement appearing in a periodical for which competent and reliable readership data demonstrate that more than 50% of the readership is composed of children under 12. (3) For the purposes of this regulation, if competent and reliable audience composition or readership data does not demonstrate that more than 50% of the audience or readership is composed of children under 12, then the Commission shall consider the following criteria in determining whether an advertisement is directed to children under 12: (i) Whether the advertisement appears in a publication directed to children under 12, including, but not limited to, books, magazines and comic books; (ii) Whether the advertisement appears during or immediately adjacent to television programs directed to children under 12, including, but not limited to, children's programming as defined by the Federal Communications Commission, animated programs, and after-school programs; (iii) Whether the advertisement appears on a television station or channel directed to children under 12; (iv) Whether the advertisement is broadcast during or immediately adjacent to radio programs directed to children under 12, or broadcast on a radio station directed to children under 12; (v) Whether the advertisement appears on the same video as a commercially-prepared video directed to children under 12, or preceding a movie directed to children under 12 shown in a movie theater; (vi) Whether the advertisement or promotion appears on product packaging directed to children under 12; and (vii) Whether the advertisement, regardless of when or where it appears, is directed to children under 12 in light of its subject matter, visual content, age of models, language, characters, tone, message, or the like. (f) Advertising to individuals under the age of 18. (2) For purposes of § 308.3(f), disclosures shall be made “clearly and conspicuously” as set forth in § 308.3(a) and as follows: (i) In a television or videotape advertisement, each letter or numeral of the video disclosure shall be, at a minimum, one-half the size of each letter or numeral of the largest presentation of the pay-per-call number. The video disclosure shall appear on the screen for sufficient time to allow consumers to read and comprehend the disclosure. An audio disclosure shall be made at least once, simultaneously with a video presentation of the disclosure. However, no audio presentation of the disclosure is required in: (A) An advertisement fifteen (15) seconds or less in length in which the pay-per-call number is not presented in the audio portion, or (B) an advertisement in which there is no audio presentation of information regarding the pay-per-call service, including the pay-per-call number. (ii) In a print advertisement, each letter or numeral of the disclosure shall be, at a minimum, one-half the size of each letter or numeral of the largest presentation of the pay-per-call number. (3) For the purposes of this regulation, advertisements directed primarily to individuals under 18 shall include: Any pay-per-call advertisement appearing during or immediately adjacent to programming for which competent and reliable audience composition data demonstrate that more than 50% of the audience is composed of individuals under 18, and any pay-per-call advertisement appearing in a periodical for which competent and reliable readership data demonstrate that more than 50% of the readership is composed of individuals under 18. (4) For the purposes of this regulation, if competent and reliable audience composition or readership data does not demonstrate that more than 50% of the audience or readership is composed of individuals under 18, then the Commission shall consider the following criteria in determining whether an advertisement is directed primarily to individuals under 18: (i) Whether the advertisement appears in publications directed primarily to individuals under 18, including, but not limited to, books, magazines and comic books; (ii) Whether the advertisement appears during or immediately adjacent to television programs directed primarily to individuals under 18, including, but not limited to, mid-afternoon weekday television shows; (iii) Whether the advertisement is broadcast on radio stations that are directed primarily to individuals under 18; (iv) Whether the advertisement appears on a cable or broadcast television station directed primarily to individuals under 18; (v) Whether the advertisement appears on the same video as a commercially-prepared video directed primarily to individuals under 18, or preceding a movie directed primarily to individuals under 18 shown in a movie theater; and (vi) Whether the advertisement, regardless of when or where it appears, is directed primarily to individuals under 18 in light of its subject matter, visual content, age of models, language, characters, tone, massage, or the like. (g) Electronic tones in advertisements. (h) Telephone solicitations. (i) Referral to toll-free telephone numbers. § 308.4 Special rule for infrequent publications. (a) The provider of any pay-per-call service that advertises a pay-per-call service in a publication that meets the requirements set forth in § 308.4(c) may include in such advertisement, in lieu of the cost disclosures required by § 308.3(b), a clear and conspicuous disclosure that a call to the advertised pay-per-call service may result in a substantial charge. (b) The provider of any pay-per-call service that places an alphabetical listing in a publication that meets the requirements set forth in § 308.4(c) is not required to make any of the disclosures required by §§ 308.3 (b), (c), (d) and (f) in the alphabetical listing, provided that such listing does not contain any information except the name, address and telephone number of the pay-per-call provider. (c) The publication referred to in § 308.4 (a) and (b) must be: (1) Widely distributed; (2) Printed annually or less frequently; and (3) One that has an established policy of not publishing specific prices in advertisements. § 308.5 Pay-per-call service standards. (a) Preamble message. (1) Identifies the name of the provider of the pay-per-call service and describes the service being provided; (2) Specifies the cost of the service as follows: (i) If there is a flat fee for the call, the preamble shall state the total cost of the call; (ii) If the call is billed on a time-sensitive basis, the preamble shall state the cost per minute and any minimum charges; if the length of the program can be determined in advance, the preamble shall also state the maximum charge that could be incurred if the caller listens to the complete program; (iii) If the call is billed on a variable rate basis, the preamble shall state, in accordance with § 308.5(a)(2) (i) and (ii), the cost of the initial portion of the call, any minimum charges, and the range of rates that may be charged depending on the options chosen by the caller; (iv) Any other fees that will be charged for the service shall be disclosed, as well as fees for any other pay-per-call service to which the caller may be transferred; (3) Informs the caller that charges for the call begin, and that to avoid charges the call must be terminated, three seconds after a clearly discernible signal or tone indicating the end of the preamble; (4) Informs the caller that anyone under the age of 18 must have the permission of parent or legal guardian in order to complete the call; and (5) Informs the caller, in the case of a pay-per-call service that is not operated or expressly authorized by a Federal agency but that provides information on a Federal program, or that uses a trade or brand name or any other term that reasonably could be interpreted or construed as implying any Federal government connection, approval or endorsement, that the pay-per-call service is not authorized, endorsed, or approved by any Federal agency. (b) No charge to caller for preamble message. (c) Nominal cost calls. (d) Data service calls. (e) Bypass mechanism. provided that (f) Billing limitations. (g) Stopping the assessment of time-based charges. (h) Prohibition on services to children. (1) Whether the pay-per-call service is advertised in the manner set forth in § 308.3(e) (2) and (3); and (2) Whether the pay-per-call service, regardless of when or where it is advertised, is directed to children under 12, in light of its subject matter, content, language, featured personality, characters, tone, message, or the like. (i) Prohibition concerning toll-free numbers. (1) The calling party being assessed, by virtue of completing the call, a charge for the call; (2) The calling party being connected to an access number for, or otherwise transferred to, a pay-per-call service; (3) The calling party being charged for information conveyed during the call unless the calling party has a presubscription or comparable arrangement to be charged for the information; or (4) The calling party being called back collect for the provision of audio or data information services, simultaneous voice conversation services, or products. (j) Disclosure requirements for billing statements. (1) Display any charges for pay-per-call services in a portion of the consumer's bill that is identified as not being related to local and long distance telephone charges; (2) For each charge so displayed, specify the type of service, the amount of the charge, and the date, time, and, for calls billed on a time-sensitive basis, the duration of the call; and (3) Display the local or toll-free telephone number where consumers can obtain answers to their questions and information on their rights and obligations with regard to their use of pay-per-call services, and can obtain the name and mailing address of the provider of pay-per-call services. (k) Refunds to consumers. (l) Service bureau liability. § 308.6 Access to information. Any common carrier that provides telecommunication services to any provider of pay-per-call services shall make available to the Commission, upon written request, any records and financial information maintained by such carrier relating to the arrangements (other than for the provision of local exchange service) between such carrier and any provider of pay-per-call services. § 308.7 Billing and collection for pay-per-call services. (a) Definitions. (1) Billing entity (2) Billing error (i) A reflection on a billing statement of a telephone-billed purchase that was not made by the customer nor made from the telephone of the customer who was billed for the purchase or, if made, was not in the amount reflected on such statement. (ii) A reflection on a billing statement of a telephone-billed purchase for which the customer requests additional clarification, including documentary evidence thereof. (iii) A reflection on a billing statement of a telephone-billed purchase that was not accepted by the customer or not provided to the customer in accordance with the stated terms of the transaction. (iv) A reflection on a billing statement of a telephone-billed purchase for a call made to an 800 or other toll free telephone number. (v) The failure to reflect properly on a billing statement a payment made by the customer or a credit issued to the customer with respect to a telephone-billed purchase. (vi) A computation error or similar error of an accounting nature on a billing statement of a telephone-billed purchase. (vii) Failure to transmit a billing statement for a telephone-billed purchase to a customer's last known address if that address was furnished by the customer at least twenty days before the end of the billing cycle for which the statement was required. (viii) A reflection on a billing statement of a telephone-billed purchase that is not identified in accordance with the requirements of § 308.5(j). (3) Customer (4) Preexisting agreement (5) Providing carrier (6) Telephone-billed purchase (i) A purchase by a caller pursuant to a preexisting agreement with a vendor; (ii) Local exchange telephone services or interexchange telephone services or any service that the Federal Communications Commission determines by rule— (A) Is closely related to the provision of local exchange telephone services or interexchange telephone services; and (B) Is subject to billing dispute resolution procedures required by Federal or state statute or regulation; or (iii) The purchase of goods or services that is otherwise subject to billing dispute resolution procedures required by Federal statute or regulation. (7) Vendor (b) Initiation of billing review. (1) Set forth or otherwise enable the billing entity to identify the customer's name and the telephone number to which the charge was billed; (2) Indicate the customer's belief that the statement contains a billing error and the type, date, and amount of such; and (3) Set forth the reasons for the customer's belief, to the extent possible, that the statement contains a billing error. (c) Disclosure of method of providing notice; presumption if oral notice is permitted. 2 2 (d) Response to customer notice. (1) Send a written acknowledgement to the customer including a statement that any disputed amount need not be paid pending investigation of the billing error. This shall be done no later than forty (40) days after receiving the notice, unless the action required by § 308.7(d)(2) is taken within such 40-day period; and (2)(i) Correct the billing error and credit the customer's account for any disputed amount and any related charges, and notify the customer of the correction. The billing entity also shall disclose to the customer that collection efforts may occur despite the credit, and shall provide the names, mailing addresses, and business telephone numbers of the vendor and providing carrier, as applicable, that are the subject of the telephone-billed purchase, or provide the customer with a local or toll-free telephone number that the customer may call to obtain this information directly. However, the billing entity is not required to make the disclosure concerning collection efforts if the vendor, its agent, or the providing carrier, as applicable, will not collect or attempt to collect the disputed charge; or (ii) Transmit an explanation to the customer, after conducting a reasonable investigation (including, where appropriate, contacting the vendor or providing carrier), 3 3 (3) The action required by § 308.7(d)(2) shall be taken no later than two complete billing cycles of the billing entity (in no event later than ninety (90) days) after receiving the notice of the billing error and before taking any action to collect the disputed amount, or any part thereof. After complying with § 308.7(d)(2), the billing entity shall: (i) If it is determined that any disputed amount is in error, promptly notify the appropriate providing carrier or vendor, as applicable, of its disposition of the customer's billing error and the reasons therefor; and (ii) Promptly notify the customer in writing of the time when payment is due of any portion of the disputed amount determined not to be in error, which time shall be the longer of ten (10) days or the number of days the customer is ordinarily allowed (whether by custom, contract or state law) to pay undisputed amounts, and that failure to pay such amount may be reported to a credit reporting agency or subject the customer to a collection action, if that in fact may happen. (e) Withdrawal of billing error notice. (f) Limitation on responsibility for billing error. (g) Customer's right to withhold disputed amount; limitation on collection action. (h) Prohibition on charges for initiating billing review. (i) Restrictions on credit reporting Adverse credit reports prohibited. (2) Reports on continuing disputes. (3) Reporting of dispute resolutions required. (j) Forfeiture of right to collect disputed amount. (k) Prompt notification of returns and crediting of refunds. (1) Mail or deliver a cash refund directly to the customer's address, and notify the appropriate billing entity that the customer has been given a refund, or (2) Transmit a credit statement to the billing entity through the vendor's normal channels for billing telephone-billed purchases. The billing entity shall, within seven (7) business days after receiving a credit statement, credit the customer's account with the amount of the refund. (l) Right of customer to assert claims or defenses. (m) Retaliatory actions prohibited. (n) Notice of billing error rights Annual statement. (ii) A billing entity that is a common carrier may comply with § 308.7(n)(1)(i) by, within 60 days after the effective date of these regulations, mailing or delivering the billing rights statement to all of its customers and, thereafter, mailing or delivering the billing rights statement at least once per calendar year, at intervals of not less than 6 months nor more than 18 months, to all of its customers. (2) Alternative summary statement. (3) General disclosure requirements. (ii) The disclosures required by § 308.7(n)(2) shall be made clearly and conspicuously and may be made on a separate statement or on the customer's billing statement. If any of the disclosures are provided on the back of the billing statement, the billing entity shall include a reference to those disclosures on the front of the statement. (iii) At the billing entity's option, additional information or explanations may be supplied with the disclosures required by § 308.7(n), but none shall be stated, utilized, or placed so as to mislead or confuse the customer or contradict, obscure, or detract attention from the information required to be disclosed. The disclosures required by § 308.7(n) shall appear separately and above any other disclosures. (o) Multiple billing entities. (p) Multiple customers. § 308.8 Severability. The provisions of this rule are separate and severable from one another. If any provision is stayed or determined to be invalid, it is the Commission's intention that the remaining provisions shall continue in effect. § 308.9 Rulemaking review. No later than four years after the effective date of this Rule, the Commission shall initiate a rulemaking review proceeding to evaluate the operation of the rule.