S 978 Session 112 (1997-1998)
S 0978 General Bill, By Wilson, Alexander, Cork, Courtney, Drummond, Fair,
Grooms, Hayes, Holland, Lander, Leatherman, Mescher, Ravenel, Russell, Setzler,
J.V. Smith, Thomas and Waldrep
A BILL TO ENACT THE "TELEMARKETING PRIVACY ACT OF 1998" BY AMENDING CHAPTER 9,
TITLE 58, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PUBLIC UTILITIES
AND TELEPHONE, TELEGRAPH, AND EXPRESS COMPANIES BY ADDING ARTICLE 23 SO AS TO
ENACT PROVISIONS ESTABLISHING TELEMARKETING PRIVACY IN THIS STATE, INCLUDING
PROVISIONS FOR, AMONG OTHER THINGS, A DATABASE, CRIMINAL PENALTIES,
INVESTIGATIONS BY THE ATTORNEY GENERAL AND THE CIRCUIT SOLICITORS, AND THE
SEEKING OF INJUNCTIVE AND OTHER RELIEF BY THE ATTORNEY GENERAL; BY AMENDING
SECTION 35-1-520, AS AMENDED, RELATING TO THE UNIFORM SECURITIES ACT,
BROKER-DEALERS, AGENTS, INVESTMENT ADVISERS, INVESTMENT ADVISER
REPRESENTATIVES, AND DENIAL, SUSPENSION, OR REVOCATION OF REGISTRATION, SO AS
TO PROVIDE THAT THE SECURITIES COMMISSIONER MAY BY ORDER DENY, SUSPEND, OR
REVOKE A REGISTRATION IF HE FINDS THAT THE ORDER IS IN THE PUBLIC INTEREST AND
THAT THE APPLICANT OR REGISTRANT OR, IN THE CASE OF A BROKER-DEALER OR
INVESTMENT ADVISER, A PARTNER, OFFICER, OR DIRECTOR, A PERSON OCCUPYING A
SIMILAR STATUS OR PERFORMING SIMILAR FUNCTIONS, OR A PERSON DIRECTLY OR
INDIRECTLY CONTROLLING THE BROKER-DEALER OR INVESTMENT ADVISER HAS CONTACTED
BY TELEPHONE A PERSON OR AN ENTITY WHO HAS FILED A NOTICE WITH THE LOCAL
EXCHANGE CARRIER AS PROVIDED IN SECTION 58-9-2710; BY AMENDING SECTION
33-56-140, AS AMENDED, RELATING TO SOLICITATION OF CHARITABLE FUNDS,
INVESTIGATIONS OF CHARITABLE ORGANIZATIONS OR PROFESSIONAL SOLICITORS, NOTICE
OF NONCOMPLIANCE, PENALTIES, AND GROUNDS FOR INJUNCTION, SO AS TO, AMONG OTHER
THINGS, PROVIDE THAT IF A CHARITABLE ORGANIZATION, PROFESSIONAL FUND-RAISING
COUNSEL, OR PROFESSIONAL SOLICITOR FAILS TO FILE A REGISTRATION APPLICATION,
STATEMENT, REPORT, OR OTHER INFORMATION REQUIRED TO BE FILED WITH THE ATTORNEY
GENERAL OR VIOLATES THE PROVISIONS OF CHAPTER 56 OF TITLE 33 OR OF THE
TELEMARKETING PRIVACY ACT OF 1998, THE ATTORNEY GENERAL SHALL NOTIFY THE
CHARITABLE ORGANIZATION, PROFESSIONAL FUND-RAISING COUNSEL, OR PROFESSIONAL
SOLICITOR OF THIS FACT BY MAILING A NOTICE BY REGISTERED OR CERTIFIED MAIL,
WITH RETURN RECEIPT REQUESTED, TO ITS LAST KNOWN ADDRESS, AND PROVIDE THAT THE
ATTORNEY GENERAL, IF HE HAS REASON TO BELIEVE THAT A PERSON IS KNOWINGLY AND
WILFULLY OPERATING IN VIOLATION OF CHAPTER 56 OF TITLE 33 OR OF THE
TELEMARKETING PRIVACY ACT OF 1998, MAY BRING AN ACTION TO ENJOIN THE
CHARITABLE ORGANIZATION, PROFESSIONAL FUND-RAISING COUNSEL, PROFESSIONAL
SOLICITOR, OR OTHER PERSON FROM CONTINUING THE VIOLATION, DOING ANY OTHER ACTS
IN FURTHERANCE OF IT, AND FOR OTHER RELIEF THE COURTS CONSIDER APPROPRIATE.
02/03/98 Senate Introduced and read first time SJ-4
02/03/98 Senate Referred to Committee on Judiciary SJ-4
A BILL
TO ENACT THE "TELEMARKETING PRIVACY ACT OF
1998" BY AMENDING CHAPTER 9, TITLE 58, CODE OF
LAWS OF SOUTH CAROLINA, 1976, RELATING TO PUBLIC
UTILITIES AND TELEPHONE, TELEGRAPH, AND EXPRESS
COMPANIES BY ADDING ARTICLE 23 SO AS TO ENACT
PROVISIONS ESTABLISHING TELEMARKETING PRIVACY IN
THIS STATE, INCLUDING PROVISIONS FOR, AMONG OTHER
THINGS, A DATABASE, CRIMINAL PENALTIES,
INVESTIGATIONS BY THE ATTORNEY GENERAL AND THE
CIRCUIT SOLICITORS, AND THE SEEKING OF INJUNCTIVE
AND OTHER RELIEF BY THE ATTORNEY GENERAL; BY
AMENDING SECTION 35-1-520, AS AMENDED, RELATING TO
THE UNIFORM SECURITIES ACT, BROKER-DEALERS,
AGENTS, INVESTMENT ADVISERS, INVESTMENT ADVISER
REPRESENTATIVES, AND DENIAL, SUSPENSION, OR
REVOCATION OF REGISTRATION, SO AS TO PROVIDE THAT
THE SECURITIES COMMISSIONER MAY BY ORDER DENY,
SUSPEND, OR REVOKE A REGISTRATION IF HE FINDS THAT
THE ORDER IS IN THE PUBLIC INTEREST AND THAT THE
APPLICANT OR REGISTRANT OR, IN THE CASE OF A
BROKER-DEALER OR INVESTMENT ADVISER, A PARTNER,
OFFICER, OR DIRECTOR, A PERSON OCCUPYING A SIMILAR
STATUS OR PERFORMING SIMILAR FUNCTIONS, OR A
PERSON DIRECTLY OR INDIRECTLY CONTROLLING THE
BROKER-DEALER OR INVESTMENT ADVISER HAS
CONTACTED BY TELEPHONE A PERSON OR AN ENTITY
WHO HAS FILED A NOTICE WITH THE LOCAL EXCHANGE
CARRIER AS PROVIDED IN SECTION 58-9-2710; BY
AMENDING SECTION 33-56-140, AS AMENDED, RELATING
TO SOLICITATION OF CHARITABLE FUNDS,
INVESTIGATIONS OF CHARITABLE ORGANIZATIONS OR
PROFESSIONAL SOLICITORS, NOTICE OF
NONCOMPLIANCE, PENALTIES, AND GROUNDS FOR
INJUNCTION, SO AS TO, AMONG OTHER THINGS, PROVIDE
THAT IF A CHARITABLE ORGANIZATION, PROFESSIONAL
FUND-RAISING COUNSEL, OR PROFESSIONAL SOLICITOR
FAILS TO FILE A REGISTRATION APPLICATION,
STATEMENT, REPORT, OR OTHER INFORMATION
REQUIRED TO BE FILED WITH THE ATTORNEY GENERAL
OR VIOLATES THE PROVISIONS OF CHAPTER 56 OF TITLE
33 OR OF THE TELEMARKETING PRIVACY ACT OF 1998,
THE ATTORNEY GENERAL SHALL NOTIFY THE
CHARITABLE ORGANIZATION, PROFESSIONAL
FUND-RASING COUNSEL, OR PROFESSIONAL SOLICITOR
OF THIS FACT BY MAILING A NOTICE BY REGISTERED OR
CERTIFIED MAIL, WITH RETURN RECEIPT REQUESTED, TO
ITS LAST KNOWN ADDRESS, AND PROVIDE THAT THE
ATTORNEY GENERAL, IF HE HAS REASON TO BELIEVE
THAT A PERSON IS KNOWINGLY AND WILFULLY
OPERATING IN VIOLATION OF CHAPTER 56 OF TITLE 33 OR
OF THE TELEMARKETING PRIVACY ACT OF 1998, MAY
BRING AN ACTION TO ENJOIN THE CHARITABLE
ORGANIZATION, PROFESSIONAL FUND-RAISING COUNSEL,
PROFESSIONAL SOLICITOR, OR OTHER PERSON FROM
CONTINUING THE VIOLATION, DOING ANY OTHER ACTS IN
FURTHERANCE OF IT, AND FOR OTHER RELIEF THE
COURTS CONSIDER APPROPRIATE.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. This act may be cited as the "Telemarketing Privacy
Act of 1998".
SECTION 2. Chapter 9, Title 58 of the 1976 Code is amended by
adding:
"Article 23
Telemarketing Privacy
Section 58-9-2710. (A)(1) The General Assembly recognizes that
the citizens of this State receive numerous unsolicited telephone calls
from various entities, interests, and industries and that telemarketers
originate a high percentage of these calls. The General Assembly
further recognizes that the citizens of South Carolina are entitled to
enjoy freedom from unwanted intrusions into their homes. It is the
intent of this article to:
(a) strike a balance between free speech and citizens' rights
to privacy; and
(b) provide those citizens who do not wish to receive
solicitations at home with a means of preventing such calls, while
allowing telemarketers to continue to call those citizens who do wish
to receive such calls at home.
(2) As used in this article, the term:
(a) 'Caller identification service' means a type of telephone
service which permits telephone subscribers to see the telephone
number of incoming telephone calls.
(b) 'Previously established relationship' means a prior or
existing relationship, not previously terminated by either party,
formed by a voluntary two-way communication between a person or
an entity and a residential subscriber with or without an exchange of
consideration, on the basis of an inquiry, application, purchase, or
transaction by the residential subscriber regarding specific products
or specific services offered by such person or entity but shall not
extend to other products or services offered by such person or entity;
this term also includes established relationships with not-for-profit
entities through such means as donations to the entity or participation
in the activities of the entity.
(c) 'Residential subscriber' means a person who has
subscribed to residential telephone service from a local exchange
carrier or the other persons living or residing with such person.
(d) 'Unsolicited telephone call' means any voice
communication over a telephone line from or on behalf of a person
or an entity with whom a residential subscriber has no previously
established relationship or personal relationship. Such
communication may be from a live operator, through the use of a
dual party relay system as defined in Section 58-9-2510, or by other
means.
(e) 'Local exchange carrier' means either an incumbent local
exchange carrier or a new entrant local exchange carrier, as defined
in Section 58-9-10.
(B) No person or entity shall make or cause to be made an
unsolicited telephone call advertising or offering for sale, lease,
rental, or as a gift any goods, services, or property or soliciting
donations of money, goods, services, or property to the telephone line
of any residential subscriber in this State who has given notice to the
local exchange carrier, in accordance with subsection (C) of this
section, of such subscriber's objection to receiving such unsolicited
telephone calls.
(C)(1) Each local exchange carrier shall establish and provide, at
no cost to residential subscribers, a database to compile a list of
telephone numbers of residential subscribers who object to receiving
unsolicited telephone calls of a type described in subsection (b) of
this section. It shall be the duty of each local exchange carrier to
have such database in operation no later than July 1, 1999.
(2) Such database may be operated by each local exchange
carrier or by another entity under contract with each local exchange
carrier.
(3) In order to create the database required by this section, each
local exchange carrier shall:
(a) inform its residential subscribers of the opportunity to
provide notification to the local exchange carrier or its contractor that
such subscriber objects to receiving unsolicited telephone calls:
(b) mail to each residential subscriber a returnable card by
which the residential subscriber may give notice to the local
exchange carrier or its contractor of his objection to receiving such
calls or revocation of such notice;
(c) specify the length of time for which a notice of objection
shall be effective and the effect of a change of telephone number on
such notice;
(d) specify the methods by which a person desiring to make
unsolicited telephone calls can obtain access to the database as
required to avoid calling the telephone numbers of residential
subscribers included in the database.
(4) If, pursuant to 47 U.S.C. Section 227(c)(3), the Federal
Communications Commission establishes a single national database
of telephone numbers of subscribers who object to receiving
telephone solicitations, the local exchange carrier shall include the
part of such single national database that relates to South Carolina in
the database established under this section.
(D) A person or an entity desiring to make unsolicited telephone
calls shall be charged a fee payable to the local exchange carrier for
access to or for paper or electronic copies of the database established
under this section. The local exchange carrier may require that fees
so charged are sufficient to cover the carrier's costs in the
compilation and preparation of the database.
(E)(1) A person or an entity who makes an unsolicited telephone
call to the telephone line of a residential subscriber in this State, at
the beginning of such call, shall state clearly the identity of the
person or entity initiating the call.
(2) A person or an entity who makes an unsolicited telephone
call to the telephone line of a residential subscriber in this State shall
not utilize any method to block or otherwise circumvent such
subscriber's use of a caller identification services.
(3)(a) A person or an entity who makes an unsolicited telephone
call, other than a call to the telephone line of a residential subscriber
in this State for the purpose of providing, offering to provide, or
arranging for other to provide goods or services to the customer in
exchange for consideration, at the beginning of such call, shall
disclose the following information:
(i) the identity of the seller;
(ii) that the purpose of the call is to sell goods or services;
(iii) the nature of the goods or services;
(iv) that no purchase or payment is necessary to be able to
win a prize or participate in a prize promotion if a prize promotion is
offered. This disclosure must be made before or in conjunction with
the description of the prize to the person called. If requested by that
person, the telemarketer must disclose the no-purchase/no-payment
entry method for the prize promotion.
(b) Before a customer pays for goods or services offered, the
telemarketer shall disclose to the customer the following material
information:
(i) the total costs to purchase, receive, or use, and the
quantity of, any goods or services that are the subject of the sales
offer;
(ii) all material restrictions, limitations, or conditions to
purchase, receive, or use the goods or services that are the subject of
the sales offer;
(iii) if the seller has a policy of not making refunds,
cancellations, exchanges, or repurchases, a statement informing the
customer that this is the seller's policy; or, if the seller or
telemarketer makes a representation about a refund, cancellation,
exchange, or repurchase policy, a statement of all material terms and
conditions of such policy;
(iv) any material aspect of an investment opportunity
including, but not limited to, risk, liquidity, earnings potential, or
profitability.
(c) The telemarketer's sales transaction shall be considered
final only after the customer has received a written notice which shall
contain in not less than 12-point bold face type the oral disclosures
required by (E)(3)(b) of this section. Such written notice must be
delivered by certified mail to the customer. The customer's payment
is not due until after receipt of the required notice.
(F) The Attorney General and the State's judicial circuit solicitors
shall investigate complaints received concerning violations of this
article. A person violating the provisions of this article is guilty of a
misdemeanor and, upon conviction for a first offense, must be fined
not more than two hundred dollars or imprisoned for not more than
thirty days; upon conviction for a second offense, must be fined not
more than one thousand dollars or imprisoned for one year; and upon
conviction for a third or subsequent offense, must be fined not more
than five thousand dollars or imprisoned for not more than five years.
Each violation constitutes a separate offense for purposes of the
criminal penalties in this section. In addition, if the Attorney General
finds that there has been a violation of this article, he may seek other
relief, including injunctive relief, as the court considers appropriate
against the telephone solicitor.
(G) A court of this State may exercise personal jurisdiction over a
nonresident or his executor or administrator as to an action or
proceeding authorized by this section in accordance with the
provisions of Title 36, Chapter 2, Part 8.
(H) The remedies, duties, prohibitions, and penalties of this section
are not exclusive and are in addition to all other causes of action,
remedies, and penalties provided by law.
(I) No provider of telephone caller identification service shall be
held liable for violations of this section committed by other persons
or entities."
SECTION 3. Section 35-1-520(1) of the 1976 Code, as last
amended by Act 134 of 1997, is further amended to read:
"(1) The Securities Commissioner may by order deny,
suspend, or revoke any a registration if he
finds (a) that the order is in the public interest and (b) that the
applicant or registrant or, in the case of a broker-dealer or investment
adviser, any a partner, officer, or director,
any a person occupying a similar status or
performing similar functions or any a person directly
or indirectly controlling the broker-dealer or investment adviser:
(i) has filed an application for registration which as of its
effective date, or as of any date after filing in the case of an order
denying effectiveness, was incomplete in any material respect or
contained any a statement which was, in light of the
circumstances under which it was made, false or misleading with
respect to any material fact;
(ii) has wilfully violated or wilfully failed to comply with any
provision of this chapter or a predecessor law or any rule or order
under this chapter or a predecessor law;
(iii) has been convicted, within the past ten years, of any
a misdemeanor involving a security or any aspect of the
securities business or any felony;
(iv) is permanently or temporarily enjoined by any
a court of competent jurisdiction from engaging in or
continuing any conduct or practice involving any aspect of the
securities business;
(v) is the subject of an order of the Securities Commissioner
denying, suspending, or revoking registration as a broker-dealer,
agent, investment adviser, or investment adviser representative;
(vi) is the subject of an order entered within the past five years
by the securities administrator of any other another
state or by the Securities and Exchange Commission denying or
revoking registration as a broker-dealer, agent, investment adviser, or
investment adviser representative or the substantial equivalent of
those terms as defined in this chapter, is the subject of an order of the
Securities and Exchange Commission suspending or expelling him
from a national securities exchange or national securities association
registered under the Securities Exchange Act of 1934 or is the subject
of a United States post office fraud order; but (1) the Securities
Commissioner may not institute a revocation or suspension
proceeding under this item (vi) more than one year from the date of
the order relied on and (2) he may not enter an order under this item
(vi) on the basis of an order under another state act unless that order
was based on facts which would currently constitute a ground for an
order under this section;
(vii) has engaged in dishonest or unethical practices in the
securities business;
(viii) is insolvent, either in the sense that his liabilities exceed
his assets or in the sense that he cannot meet his obligations as they
mature, but the Securities Commissioner may not enter an order
against a broker-dealer or investment adviser under this item (viii)
without a finding of insolvency as to the broker-dealer or investment
adviser; or
(ix) is not qualified on the basis of such factors as training,
experience and knowledge of the securities business, except as
otherwise provided in Section 35-1-530; or
(x) has contacted by telephone a person or an entity who has
filed a notice with the local exchange carrier as provided in Section
58-9-2710(B)."
SECTION 4. Section 33-56-140(2) of the 1976 Code, as amended
by Section 28O., Part II of Act 458 of 1996, is further amended to
read:
"(2) If any a charitable organization, professional
fund-raising counsel, or professional solicitor fails to file a
registration application, statement, report, or other information
required to be filed with the Attorney General under this chapter, or
violates the provisions of this chapter or of the Telemarketing
Privacy Act of 1998, the Attorney General shall notify the
delinquent charitable organization, professional fund-raising
counsel, or professional solicitor of this fact by mailing a notice by
registered or certified mail, with return receipt requested, to its last
known address. If the required registration application, statement,
annual report, assurance of voluntary compliance, or other
information is not filed or if the existing violation is not discontinued
within fifteen days after the formal notification or receipt of the
notice, the Attorney General may assess an administrative fine not to
exceed two thousand dollars against the delinquent organization."
SECTION 5. Section 33-56-140(3)(a) of the 1976 Code, as added
by Act 461 of 1994, is amended to read:
"(a) a person is knowingly and wilfully operating in violation of
the provisions of this chapter or of the Telemarketing Privacy Act
of 1998;"
SECTION 6. The provisions in Section 58-9-2710 of the 1976
Code, as contained in Section 2 of this act, relating to administrative
establishment of the database, including receipt of notices by the
local exchange carriers, take effect upon approval by the Governor.
All other provisions of this act take effect July 1, 1999.
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