Text: HSB00170 Text: HSB00172 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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1 1 Section 1. NEW SECTION. 476.103 UNAUTHORIZED CHANGE IN
1 2 SERVICE – CIVIL PENALTY.
1 3 1. Notwithstanding the deregulation of a communications
1 4 service or facility under section 476.1D, the board may adopt
1 5 rules to protect consumers from unauthorized changes in
1 6 telecommunications service. Such rules shall not impose undue
1 7 restrictions upon competition in telecommunications markets.
1 8 2. As used in this section, unless the context otherwise
1 9 requires:
1 10 a. "Change in service" means the designation of a new
1 11 provider of a telecommunications service to a consumer,
1 12 including the initial selection of a service provider, and
1 13 includes the addition or deletion of a telecommunications
1 14 service for which a separate charge is made to a consumer
1 15 account.
1 16 b. "Consumer" means a person other than a service provider
1 17 who uses a telecommunications service.
1 18 c. "Executing service provider" means, with respect to any
1 19 change in telecommunications service, a service provider who
1 20 executes an order for a change in service received from
1 21 another service provider.
1 22 d. "Service provider" means a person providing a
1 23 telecommunications service.
1 24 e. "Submitting service provider" means a service provider
1 25 who requests another service provider to execute a change in
1 26 service.
1 27 f. "Telecommunications service" means a local exchange or
1 28 long distance telephone service other than commercial mobile
1 29 radio service.
1 30 3. The board shall adopt rules prohibiting an unauthorized
1 31 change in telecommunications service. The rules shall be
1 32 consistent with federal communications commission regulations
1 33 regarding procedures for verification of customer
1 34 authorization of a change in service. The rules, at a
1 35 minimum, shall provide for all of the following:
2 1 a. (1) A submitting service provider shall obtain
2 2 verification of customer authorization of a change in service
2 3 before submitting such change in service.
2 4 (2) Verification appropriate under the circumstances for
2 5 all other changes in service.
2 6 (3) The verification may be in written, oral, or
2 7 electronic form and may be performed by a qualified third
2 8 party.
2 9 (4) The reasonable time period during which the
2 10 verification is to be retained, as determined by the board.
2 11 b. A customer shall be notified of any change in service.
2 12 c. Appropriate compensation for a customer affected by an
2 13 unauthorized change in service.
2 14 d. Board determination of potential liability, including
2 15 assessment of damages, for unauthorized changes in service
2 16 among the customer, previous service provider, executing
2 17 service provider, and submitting service provider.
2 18 e. A provision encouraging service providers to resolve
2 19 customer complaints without involvement of the board.
2 20 f. The prompt reversal of unauthorized changes in service.
2 21 g. Procedures for a customer, service provider, or the
2 22 consumer advocate to submit to the board complaints of
2 23 unauthorized changes in service.
2 24 4. a. In addition to any applicable civil penalty set out
2 25 in section 476.51, a service provider who violates a provision
2 26 of this section, a rule adopted pursuant to this section, or
2 27 an order lawfully issued by the board pursuant to this
2 28 section, is subject to a civil penalty, which, after notice
2 29 and opportunity for hearing, may be levied by the board, of
2 30 not more than ten thousand dollars per violation. Each
2 31 violation is a separate offense.
2 32 b. A civil penalty may be compromised by the board. In
2 33 determining the amount of the penalty, or the amount agreed
2 34 upon in a compromise, the board may consider the size of the
2 35 service provider, the gravity of the violation, any history of
3 1 prior violations by the service provider, remedial actions
3 2 taken by the service provider, the nature of the conduct of
3 3 the service provider, and any other relevant factors.
3 4 c. A civil penalty collected pursuant to this subsection
3 5 shall be forwarded by the executive secretary of the board to
3 6 the treasurer of state to be credited to the general fund of
3 7 the state and to be used only for consumer education programs
3 8 administered by the board.
3 9 d. A penalty paid by a rate-of-return regulated utility
3 10 pursuant to this section shall be excluded from the utility's
3 11 costs when determining the utility's revenue requirement, and
3 12 shall not be included either directly or indirectly in the
3 13 utility's rates or charges to its customers.
3 14 e. The board shall not commence an administrative
3 15 proceeding to impose a civil penalty under this section for
3 16 acts subject to a civil enforcement action pending in court
3 17 under section 714D.7.
3 18 5. If the board determines, after notice and opportunity
3 19 for hearing, that a service provider has shown a pattern of
3 20 violations of the rules adopted pursuant to this subsection,
3 21 the board may by order do any of the following:
3 22 a. Prohibit any other service provider from billing
3 23 charges to residents of Iowa on behalf of the service provider
3 24 determined to have engaged in such a pattern of violations.
3 25 b. Prohibit certificated local exchange service providers
3 26 from providing exchange access services to the service
3 27 provider.
3 28 c. Limit the billing or access services prohibition under
3 29 paragraph "a" or "b" to a period of time. Such prohibition
3 30 may be withdrawn upon a showing of good cause.
3 31 d. Revoke the certificate of public convenience and
3 32 necessity of a local exchange service provider.
3 33 6. A consumer, for the same alleged act, shall not pursue
3 34 both a complaint before the board under this section and the
3 35 remedies under chapter 714D.
4 1 7. The board has primary jurisdiction over a complaint
4 2 pursuant to this section initiated by a service provider.
4 3 8. Subsections 6 and 7 do not preclude proceedings before
4 4 the federal communications commission to enforce applicable
4 5 federal law. However, a service provider or a consumer, for
4 6 the same alleged acts, shall not pursue a complaint both
4 7 before the federal communications commission and pursuant to
4 8 this section.
4 9 9. The board shall adopt rules establishing procedures for
4 10 the solicitation, imposition, and lifting of preferred carrier
4 11 freezes. A valid preferred carrier freeze prevents a change
4 12 in service unless the subscriber gives the service provider
4 13 from whom the freeze was requested the subscriber's express
4 14 consent.
4 15 Sec. 2. NEW SECTION. 714D.l LEGISLATIVE INTENT.
4 16 The general assembly finds that customers of telephone
4 17 services have been subjected to fraud in the sale and
4 18 advertisement of telephone long distance and local service, as
4 19 well as other services related to residential and business
4 20 telephone service. The general assembly further finds that
4 21 companies acting in a lawful manner have lost customers to
4 22 companies that obtain customers through fraud and deception.
4 23 It is the intent of the general assembly to protect
4 24 telephone service subscribers from fraud and to provide
4 25 statutory remedies for the victims of fraud in the sale of
4 26 telecommunications service. It is the intent of the general
4 27 assembly to provide the attorney general with additional
4 28 remedies to address the issue of fraud in the sale of
4 29 telecommunications service. It is further the intent of the
4 30 general assembly that this chapter does not limit the rights
4 31 or remedies that are otherwise available to a consumer or the
4 32 attorney general under any other law.
4 33 Sec. 3. NEW SECTION. 714D.2 DEFINITIONS.
4 34 As used in this chapter, unless the context otherwise
4 35 requires:
5 1 1. "Advertisement" means the same as defined in section
5 2 714.16, subsection 1.
5 3 2. "Consumer" means a person who is not a
5 4 telecommunications service provider and who uses
5 5 telecommunications services.
5 6 3. "Deception" means the same as defined in section
5 7 714.16, subsection 1.
5 8 4. "Person" means the same as defined in section 714.16,
5 9 subsection 1.
5 10 5. "Sweepstakes box" means the box or receptacle into
5 11 which a person may place an entry form or document used to
5 12 enter a sweepstakes, contest, or drawing of any description,
5 13 and promotional materials attached to such entry form or
5 14 document.
5 15 6. "Telecommunications Act" means 47 U.S.C. } 258, a
5 16 portion of the federal Telecommunications Act of 1996,
5 17 relating to changes in telephone service, and including
5 18 regulations adopted pursuant to that section.
5 19 7. "Telecommunications service" means local exchange or
5 20 long distance telephone service, and any additional service or
5 21 merchandise for which any charge or assessment appears on a
5 22 billing statement directed to a person by a provider of local
5 23 exchange or long distance telephone service, but does not
5 24 include commercial mobile radio service or charges or
5 25 assessments imposed on consumers of local exchange or long
5 26 distance telephone service or on such additional service or
5 27 merchandise by governmental entities.
5 28 8. "Telecommunications service provider" means a person
5 29 who advertises, sells, leases, or provides telecommunications
5 30 services to another person.
5 31 9. "Unfair practice" means the same as defined in section
5 32 714.16, subsection 1, and also means any failure of a person
5 33 to comply with the Telecommunications Act or with any statute
5 34 or rule enforced by the utilities board within the utilities
5 35 division of the department of commerce relating to a
6 1 telecommunications service selection or change.
6 2 Sec. 4. NEW SECTION. 714D.3 UNFAIR AND DECEPTIVE
6 3 PRACTICES.
6 4 The act, use, or employment by a person of deception or an
6 5 unfair practice in connection with the lease, sale, or
6 6 advertisement of a telecommunications service or the
6 7 solicitation of authority to provide or execute a change of a
6 8 telecommunications service is an unlawful practice.
6 9 Sec. 5. NEW SECTION. 714D.4 PROHIBITION OF SWEEPSTAKES
6 10 BOXES.
6 11 The use of a sweepstakes box by a person to solicit
6 12 authority to provide or execute a change of a consumer's
6 13 telecommunications service is an unlawful practice.
6 14 Sec. 6. NEW SECTION. 714D.5 CONDITIONS ON USE OF PRIZE
6 15 PROMOTIONS TO SOLICIT AUTHORITY TO PROVIDE OR CHANGE
6 16 TELECOMMUNICATIONS SERVICES.
6 17 1. It is an unlawful practice for a person to use a form
6 18 or document which is to be used or intended to be used by
6 19 another person to enter a sweepstakes, contest, or drawing of
6 20 any description as written authority to provide or execute a
6 21 change of a consumer's telecommunications service.
6 22 2. It is an unlawful practice for a person to solicit the
6 23 lease or sale of or to solicit the authority to provide or
6 24 execute a change of a telecommunications service to another
6 25 person through or in conjunction with a sweepstakes, contest,
6 26 or drawing without clearly, conspicuously, and fully
6 27 disclosing in all direct mail solicitations to the other
6 28 person the fact that the sweepstakes, contest, or drawing is
6 29 intended to solicit authority to provide or execute a change
6 30 of a telecommunications service. The disclosure required
6 31 shall include, at a minimum, all of the following:
6 32 a. A statement that an acceptance or change of
6 33 telecommunications service is not required to enter the
6 34 sweepstakes, contest, or drawing.
6 35 b. An alternative means by which a person may enter the
7 1 sweepstakes, contest, or drawing without accepting or
7 2 authorizing a change in a telecommunications service.
7 3 c. The name and telephone number of the entity soliciting
7 4 the person to accept or to authorize a change of
7 5 telecommunications service through the use of or in
7 6 conjunction with the sweepstakes, contest, or drawing.
7 7 d. A brief description of the nature of the
7 8 telecommunications service for which authorization is sought
7 9 through the use of or in conjunction with the sweepstakes,
7 10 contest, or drawing.
7 11 Sec. 7. NEW SECTION. 714D.6 PRIVATE ACTION.
7 12 In addition to any other remedy, a consumer suffering a
7 13 pecuniary loss as a result of an act which is an unlawful
7 14 practice under this chapter may bring an action against the
7 15 person committing such act to recover all of the following:
7 16 1. The greater of five hundred dollars or twice the amount
7 17 of the pecuniary loss.
7 18 2. Costs and reasonable attorney fees.
7 19 Sec. 8. NEW SECTION. 714D.7 CIVIL ENFORCEMENT.
7 20 1. A violation of this chapter or a rule adopted pursuant
7 21 to this chapter is a violation of section 714.16, subsection
7 22 2, paragraph "a". The remedies and penalties provided by
7 23 section 714.16, including but not limited to injunctive relief
7 24 and civil penalties, apply to violations of this chapter.
7 25 2. In seeking reimbursement pursuant to section 714.16,
7 26 subsection 7, from a person who has committed an unlawful
7 27 practice under this chapter, the attorney general may seek an
7 28 order from the court that the person pay to the attorney
7 29 general on behalf of consumers the amounts for which the
7 30 person would be liable under section 714D.6 for each consumer
7 31 who has a cause of action pursuant to section 714D.6. Section
7 32 714.16, as it relates to consumer reimbursement, applies to
7 33 amounts recovered by the attorney general as reimbursement
7 34 under this chapter. However, a consumer who is awarded
7 35 monetary damages pursuant to section 714D.6 is not eligible
8 1 for monetary relief under this section for the same unlawful
8 2 practice.
8 3 3. The remedies provided pursuant to this chapter are in
8 4 addition to any other remedies provided to the state or to a
8 5 person under other law.
8 6 4. The attorney general shall not file a civil enforcement
8 7 action under this chapter or under section 714.16 against a
8 8 person for an act which is the subject of an administrative
8 9 proceeding to impose a civil penalty which has been initiated
8 10 against the person by the utilities board within the utilities
8 11 division of the department of commerce. This subsection shall
8 12 not be construed to limit the authority of the attorney
8 13 general to file a civil enforcement or other enforcement
8 14 action against a person for violating a prior agreement
8 15 entered into by the person with the attorney general or a
8 16 court order obtained by the attorney general against the
8 17 person. This subsection shall not be construed to limit the
8 18 authority of the attorney general to file a civil enforcement
8 19 or other enforcement action against the person for acts which
8 20 are not the subject of an administrative proceeding which has
8 21 been initiated against the person by the utilities board.
8 22 EXPLANATION
8 23 This bill creates new Code section 476.103 and new Code
8 24 chapter 714D relating to unauthorized provision of or changes
8 25 in telecommunications services and fraudulent acts associated
8 26 with the lease, sale, or advertisement of telecommunications
8 27 service, or with the solicitation of authority to provide or
8 28 execute a change of telecommunications service or provider.
8 29 New Code section 476.103 authorizes the utilities board to
8 30 adopt rules to protect consumers from unauthorized changes in
8 31 telecommunications services. The board's rules are to provide
8 32 that a submitting service provider must obtain verification of
8 33 customer authorization of a change in service before
8 34 submitting such change in service; the verification must be
8 35 appropriate under the circumstances for all other changes in
9 1 service; the verification must be in written, oral, or
9 2 electronic form and the verification must be performed by a
9 3 qualified third party; the verification must be retained for a
9 4 reasonable time period as determined by the board; and a
9 5 customer shall be notified of any change in service. The
9 6 rules must also address the potential liability, including
9 7 assessment of damages, for an unauthorized change in service
9 8 among the customer, previous service provider, executing
9 9 service provider, and submitting service provider; the
9 10 encouragement of service providers to resolve customer
9 11 complaints without involvement of the board; the prompt
9 12 reversal of unauthorized changes in service; and procedures
9 13 for a customer, service provider, and the consumer advocate to
9 14 submit to the board complaints of unauthorized changes in
9 15 service. The board, in addition to its civil penalty
9 16 authority under Code section 476.51, may levy against a
9 17 service provider who violates a provision of new Code section
9 18 476.103, a rule adopted pursuant to this section, or an order
9 19 lawfully issued by the board pursuant to this section, a civil
9 20 penalty, which may be levied by the board, of not more than
9 21 $10,000 per violation.
9 22 New Code chapter 714D establishes prohibitions on the act,
9 23 use, or employment by a person of deception or unfair
9 24 practices associated with the lease, sale, or advertisement of
9 25 telecommunications service, or in connection with the
9 26 solicitation of authority to provide or execute a change of
9 27 telecommunications service; the use of a sweepstakes box to
9 28 solicit authority to provide or execute a change of a person's
9 29 telecommunications service; the use of forms or documents
9 30 which are to be used or intended to be used by another person
9 31 to enter a sweepstakes, contest, or drawing of any description
9 32 as written authority to provide or execute a change of a
9 33 person's telecommunications service; and the soliciting or
9 34 providing of a telecommunications service to another person
9 35 through or in conjunction with a sweepstakes, contest, or
10 1 drawing without clearly, conspicuously, and fully disclosing
10 2 in all direct mail solicitations to the other person the fact
10 3 that the sweepstakes, contest, or drawing is intended to
10 4 solicit authority to provide or execute a change of
10 5 telecommunications service.
10 6 The bill provides that a consumer suffering a pecuniary
10 7 loss as a result of an unlawful act, in addition to any other
10 8 remedy, may bring an action against the offending person to
10 9 recover the greater of $500 or twice the amount of the loss,
10 10 and costs and reasonable attorney fees.
10 11 The bill also provides for civil enforcement of the chapter
10 12 by the attorney general. The bill provides that the attorney
10 13 general may exercise the enforcement powers established in
10 14 Code section 714.16, with respect to a violation of new Code
10 15 chapter 714D. The remedies provided are in addition to any
10 16 other remedies provided by law.
10 17 LSB 1314DP 78
10 18 mj/jw/5.3
Text: HSB00170 Text: HSB00172 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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