1.1                          A bill for an act 
  1.2             relating to telecommunications; prohibiting billing 
  1.3             for unauthorized charges on telephone bills; proposing 
  1.4             coding for new law in Minnesota Statutes, chapter 237. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [237.665] [PROHIBITION AGAINST BILLING FOR 
  1.7   UNAUTHORIZED CHARGES FROM THIRD-PARTY SERVICE PROVIDERS.] 
  1.8      Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
  1.9   subdivision apply to this section. 
  1.10     (b) A "billing agent" is a telephone utility that includes 
  1.11  in a bill it sends to a customer a charge for a product or 
  1.12  service offered by a service provider.  
  1.13     (c) A "billing aggregator" is a person, other than a 
  1.14  service provider, who forwards the charge for a product or 
  1.15  service offered by a service provider to a billing agent.  
  1.16     (d) A "letter of agency" or "LOA" is a document containing 
  1.17  a customer's signature that authorizes a service provider to 
  1.18  bill a customer for a good or service that will appear as a 
  1.19  charge on the customer's telephone bill.  
  1.20     (e)  A "service provider" is a person, other than the 
  1.21  billing agent, who offers a product or service to a customer, 
  1.22  the charge for which appears on the bill of a billing agent.  
  1.23     (f) A "telephone utility" is a telephone company as defined 
  1.24  in section 237.01, subdivision 7, or a telecommunications 
  1.25  carrier as defined in section 237.01, subdivision 6, authorized 
  2.1   by the commission to furnish local service in the state.  
  2.2      (g) An "unauthorized charge" is the charge for a service or 
  2.3   product by a service provider for which the provider has not 
  2.4   obtained sufficient evidence of customer authorization and for 
  2.5   which a charge appears on the customer's telephone bill.  For 
  2.6   the purposes of this section, a charge for a collect call is 
  2.7   considered to be authorized by the person receiving the call.  
  2.8   For direct-dialed calls, where the call itself represents the 
  2.9   service for which a charge is placed on a customer's local 
  2.10  telephone bill, such as "900 number" services and "dial around" 
  2.11  services, evidence that the call was placed from the number that 
  2.12  is subject to the telephone bill is considered sufficient 
  2.13  evidence of authorization for that call.  
  2.14     Subd. 2.  [CHARGES FOR GOODS AND SERVICES APPEARING ON A 
  2.15  CUSTOMER'S TELEPHONE BILL.] (a) [CUSTOMER AUTHORIZATION.] A 
  2.16  service provider must not bill a customer for goods or services 
  2.17  that will appear as a charge on the customer's local telephone 
  2.18  bill without first obtaining the customer's express 
  2.19  authorization.  
  2.20     (b) [AUTHORIZATION METHODS.] A service provider billing a 
  2.21  customer for goods or services other than those described in 
  2.22  paragraph (e) that will appear on the customer's local telephone 
  2.23  bill must verify the customer's authorization pursuant to a 
  2.24  letter of agency or an oral authorization with third-party 
  2.25  verification that meets the requirements of this subdivision.  
  2.26     (c) [LETTER OF AGENCY.] If a service provider obtains the 
  2.27  customer's written authorization in the form of a letter of 
  2.28  agency, it must be a separate or easily separable document 
  2.29  containing the authorizing language consistent with this 
  2.30  section.  The sole purpose of the LOA must be to authorize a 
  2.31  bill for goods or services to appear as a charge on the 
  2.32  customer's local telephone bill.  The LOA must not include any 
  2.33  advertising or promotional material or inducements of any kind.  
  2.34  The LOA must be signed and dated by the customer to the 
  2.35  telephone line or lines that are the subject of the bills.  The 
  2.36  LOA must be printed with a type of sufficient size to be clearly 
  3.1   legible and must contain clear and unambiguous language that:  
  3.2      (1) confirms the decision to be billed for goods or 
  3.3   services that will appear as a charge on the customer's local 
  3.4   telephone bill by signing the LOA; 
  3.5      (2) confirms the customer's billing name, address, and 
  3.6   telephone number; and 
  3.7      (3) contains separate statements for each good or service 
  3.8   for which the customer is agreeing to be billed, where that 
  3.9   billing will appear as charges on the customer's local telephone 
  3.10  bill.  
  3.11     (d) [ORAL AUTHORIZATION WITH THIRD-PARTY VERIFICATION.] A 
  3.12  service provider may accept a customer's oral authorization to 
  3.13  be billed for goods or services that will appear as a charge on 
  3.14  the customer's local telephone bill, if the service provider 
  3.15  verifies the customer's oral authorization with an independent 
  3.16  third party.  The method of verification is valid only if: 
  3.17     (1) the independent third party confirms the customer's 
  3.18  identity with information unique to the customer unless the 
  3.19  customer refused, then that fact must be noted; 
  3.20     (2) the independent third party informs the customer that 
  3.21  the customer is agreeing to be billed for goods or services that 
  3.22  will appear as a charge on the customer's local telephone bill; 
  3.23     (3) the independent third party is not directly or 
  3.24  indirectly owned, managed, controlled, or directed by the 
  3.25  service provider or the provider's marketing agent; 
  3.26     (4) the independent third party has no financial incentive 
  3.27  to confirm such billing arrangements for the service provider or 
  3.28  the provider's marketing agent; 
  3.29     (5) the independent third party operates in a location 
  3.30  physically separate from the service provider or the provider's 
  3.31  marketing agent; and 
  3.32     (6) the data are maintained and stored by the independent 
  3.33  third party or the service provider for a minimum of two years.  
  3.34     (e) [CUSTOMER-INITIATED SERVICE CALLS.] For direct-dialed 
  3.35  calls where the call itself represents the service for which a 
  3.36  charge is placed on a customer's local telephone bill, such as 
  4.1   "900 number" services and "dial around" services, evidence that 
  4.2   the call was placed from the number that is subject to the 
  4.3   telephone bill is considered sufficient evidence of 
  4.4   authorization for that call.  
  4.5      Subd. 3.  [REGISTRATION REQUIREMENTS AND OBLIGATIONS OF 
  4.6   SERVICE PROVIDERS, BILLING AGGREGATORS, AND BILLING AGENTS.] (a) 
  4.7   [OBLIGATIONS OF SERVICE PROVIDERS.] After March 1, 2005, a 
  4.8   service provider may not offer a product or service to a 
  4.9   customer, the charge for which appears on the bill of a billing 
  4.10  agent, nor forward such a charge to a billing agent, unless the 
  4.11  service provider is registered with the commission.  
  4.12     (b) [OBLIGATIONS OF BILLING AGGREGATORS.] After March 1, 
  4.13  2005, a billing aggregator may not forward to a billing agent 
  4.14  charges for a service or product offered by a service provider 
  4.15  unless: 
  4.16     (1) the billing aggregator is registered with the 
  4.17  commission under this section; and 
  4.18     (2) the service provider is properly registered under this 
  4.19  section.  
  4.20     (c) [OBLIGATIONS OF BILLING AGENTS.] After March 1, 2005, a 
  4.21  billing agent may not knowingly bill on behalf of a service 
  4.22  provider or billing aggregator who is required to be registered 
  4.23  under this section and who is not properly registered under this 
  4.24  section. 
  4.25     For the purposes of this subdivision, there is a rebuttable 
  4.26  presumption that a billing agent acted knowingly if the billing 
  4.27  agent billed on behalf of a service provider or billing 
  4.28  aggregator whose name was not on the commission's list of 
  4.29  registered service providers at the time the charge appeared on 
  4.30  the customer's bill or billed on behalf of a service provider or 
  4.31  billing aggregator whose registration had been revoked and 
  4.32  properly noticed under subdivision 4.  
  4.33     (d) [REMOVAL OF CHARGE; REIMBURSEMENT.] A billing agent 
  4.34  that places a charge on a customer's bill on behalf of a service 
  4.35  provider that is not registered with the commission under this 
  4.36  section must immediately remove the charge from the customer's 
  5.1   bill and must reimburse the customer for charges paid.  
  5.2      (e) [BILL FORMAT.] Customer bills issued by billing agents 
  5.3   must comply with the Federal Communications Commission's 
  5.4   Truth-in-Billing requirements, as well as clearly identify the 
  5.5   service provider who originated the charge for goods or services.
  5.6      Subd. 4.  [REGISTRATION PROCEDURES FOR SERVICE PROVIDERS 
  5.7   AND BILLING AGGREGATORS.] (a) [ADOPTION; EXPEDITED APPROVAL 
  5.8   PROCEDURES.] By January 1, 2005, the commission shall adopt by 
  5.9   rule or order procedures governing the registration of service 
  5.10  providers and billing aggregators.  The commission procedures 
  5.11  must ensure expedited approval of a request for registration 
  5.12  where no objection is filed within 30 days of filing of an 
  5.13  application for registration.  
  5.14     (b) [GROUNDS FOR DENIAL.] The commission may deny an 
  5.15  application if the commission finds that: 
  5.16     (1) the application is incomplete and the applicant does 
  5.17  not take reasonable steps to provide the missing information; 
  5.18     (2) the applicant has knowingly misrepresented or omitted a 
  5.19  material fact on the application; or 
  5.20     (3) the applicant or a principal of the applicant has 
  5.21  knowingly or repeatedly billed one or more customers for 
  5.22  unauthorized charges or engaged in false or deceptive billing 
  5.23  practices.  
  5.24     (c) [REGISTRATION REVOCATION PROCEDURE.] After notice and 
  5.25  an opportunity for a hearing, the commission may revoke a 
  5.26  registration in accordance with clauses (1) and (2).  
  5.27     (1) The commission may revoke the registration of a service 
  5.28  provider who has: 
  5.29     (i) knowingly or repeatedly billed one or more customers 
  5.30  for unauthorized service, provided that for the purposes of this 
  5.31  clause, there is a rebuttable presumption that a service 
  5.32  provider knowingly billed for unauthorized charges if the 
  5.33  service provider cannot verify the customer's authorization for 
  5.34  those charges, under subdivision 2; or 
  5.35     (ii) engaged in any other false or deceptive billing 
  5.36  practices prohibited by law or commission rules.  
  6.1      (2) The commission may revoke the registration of a billing 
  6.2   aggregator who has:  
  6.3      (i) knowingly or repeatedly forwarded the charge for a 
  6.4   service or product to a billing agent on behalf of a service 
  6.5   provider who was required to be registered with the commission 
  6.6   under subdivision 3 and who was not registered, provided that 
  6.7   for purposes of this subdivision, there is a rebuttable 
  6.8   presumption that a billing aggregator acted knowingly if the 
  6.9   billing aggregator forwarded a charge and if the service 
  6.10  provider's name was not on the commission's list of registered 
  6.11  service providers at the time the charge was forwarded to the 
  6.12  billing agent or if the service provider's registration had been 
  6.13  revoked and properly noticed at the time the charge was 
  6.14  forwarded to the billing agent; or 
  6.15     (ii) engaged in any other false or deceptive billing 
  6.16  practices prohibited by other commission rules.  
  6.17     (d) [POSTING ON COMMISSION WEB SITE.] The commission must 
  6.18  post the names of new registrants on a list on the commission 
  6.19  Web site within two business days of the effective date of 
  6.20  registration.  The commission must remove registrants from the 
  6.21  list whose registration has been revoked within two business 
  6.22  days of the revocation becoming final.  
  6.23     (e) [NOTIFICATION OF REVOCATION.] The commission must send 
  6.24  written notice of the revocation of a registration under this 
  6.25  subdivision to all telephone utilities and billing aggregators 
  6.26  doing business in Minnesota within two business days of the 
  6.27  revocation becoming final.  
  6.28     Subd. 5.  [PROCEDURES TO BE FOLLOWED BY BILLING AGENTS UPON 
  6.29  CUSTOMER NOTICE OF COMPLAINT.] (a) [SUSPENSION OF COLLECTION 
  6.30  EFFORTS.] If a customer of a billing agent notifies the billing 
  6.31  agent that an unauthorized charge has been included in the 
  6.32  customer's telephone bill, the billing agent shall: 
  6.33     (1) immediately suspend collection efforts on that portion 
  6.34  of the customer's bill; and 
  6.35     (2) either cease collection efforts entirely with regard to 
  6.36  the disputed charge or request evidence from the service 
  7.1   provider that the customer authorized the service for which 
  7.2   payment is sought. 
  7.3      (b) [EVIDENCE OF CUSTOMER AUTHORIZATION.] If the billing 
  7.4   agent ceases collection efforts or does not receive sufficient 
  7.5   evidence of customer authorization within 30 days of a request 
  7.6   for that evidence by the billing agent, the billing agent shall:
  7.7      (1) immediately remove any charges associated with the 
  7.8   unauthorized service; and 
  7.9      (2) refund to the customer any amounts paid for the 
  7.10  unauthorized service that were billed by the billing agent 
  7.11  during the six months prior to the customer's complaint or 
  7.12  during any longer period in which the customer can prove the 
  7.13  customer was billed by the billing agent for unauthorized 
  7.14  services.  For purposes of this clause, proof of being billed by 
  7.15  a billing agent includes, but is not limited to, the possession 
  7.16  of past bills issued by the billing agent that contain the 
  7.17  unauthorized charges.  
  7.18     (c) [REINSTITUTION OF CHARGES.] If sufficient evidence of 
  7.19  customer authorization required by this section is provided to 
  7.20  the billing agent, the billing agent may restore the charges on 
  7.21  the customer's bill and reinstitute collection efforts in 
  7.22  accordance with clauses (1) to (3).  
  7.23     (1) The billing agent must provide a copy of the 
  7.24  authorization to the customer before restoring charges. 
  7.25     (2) The billing agent must provide a notice to the customer 
  7.26  before restoring the charges that includes the following 
  7.27  information: 
  7.28     (i) the billing agent has decided that sufficient evidence 
  7.29  of customer authorization for the disputed charge exists and 
  7.30  that the charge is being restored to the customer's bill; 
  7.31     (ii) the customer has the right to appeal the billing 
  7.32  agent's decision to the commission; and 
  7.33     (iii) the commission's toll-free number, mailing address, 
  7.34  and e-mail address.  
  7.35     (3) A customer may appeal charges to the commission if the 
  7.36  customer believes the authorization does not meet the 
  8.1   requirements of this section.