Grants the public service commission the authority to regulate and certify providers, distributors and retailers of prepaid telephone calling services; repealer

Title of bill

An act to amend the public service law, the abandoned property law and the general business law, in relation to prepaid telephone calling cards and services; and to repeal section 92-f of the public service law relating to prepaid telephone calling card consumer protections

Purpose or general idea of bill

Grants the public service commission the authority to regulate and certify providers, distributors and retailers of prepaid telephone calling services.

Specific provisions

Repeals Section 92-f of the Public Service Law. Amends the Public Service Law by adding new Article 5-A. Amends Section 103 (g) of the Abandoned Property Law; Amends Section 396-i(1) of the General Business Law.

Existing provisions

Section 92- f of the Public Service Law.

Justification

To deter the fraudulent, deceptive and unconscionable practices of a segment of the prepaid telephone calling card industry, this legislation establishes a comprehensive registration system and mandatory honest and non-misleading disclosures for persons providing prepaid calling services or issuing or distributing prepaid calling cards for such a service in New York.

Prepaid cards had for years been their most economical and convenient way to call, especially for international calls. However, prepaid cards that shortchange consumers by providing fewer minutes than they promise have, in recent years, become common and have robbed New York citizens of millions of dollars. Often the victims are the people who can least afford it.

Under this bill, prepaid service providers and distributors would be required to register with the New York Public Service Commission and, disclose certain consumer protection information in all their advertising on the prepaid calling cards and their packaging. In addition, the bill would require honest advertising, posters and voice prompts which accurately identify the number of minutes of communication time that the cards can deliver.

This legislation was developed in consultation with consumer groups and responsible companies in the prepaid calling card industry.

This bill specifies that a violation of its provisions would constitute an unlawful practice punishable by a monetary penalty of not more than $5,000 for a first offense and not more than $10,000 for any subsequent offense.

Legislative history

2006-2007: New Legislation 2007-2008: A.10350a Ordered to Third Reading Rules Cal. 620

Fiscal impact

None.

Effective date

This act shall take effect on the first of the calendar month commencing immediately after the nineteenth day after it shall have become a law.