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  1. 1. 1 BIL: 272 2 TYP: General Bill GB 3 INB: Senate 4 IND: 19990112 5 PSP: Wilson 6 SPO: Wilson, Hayes, Giese, Russell 7 DDN: l:councilbillsnbd11026jm99.doc 8 RBY: Senate 9 COM: Judiciary Committee 11 SJ 10 SUB: Telemarketing Privacy Act, Crimes and Offenses, Telephones, Secretary of 11 State, Charitable Organizations 12 13 14 HST: 15 16 Body Date Action Description Com Leg Involved 17 ______ ________ _______________________________________ _______ ____________ 18 Senate 19990112 Introduced, read first time, 11 SJ 19 referred to Committee 20 Senate 19981216 Prefiled, referred to Committee 11 SJ 21 22 23 Printed Versions of This Bill 24 25 26 27 28 TXT:
  2. 2. 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO ENACT THE “TELEMARKETING PRIVACY ACT” BY 12 AMENDING CHAPTER 9, TITLE 58, CODE OF LAWS OF 13 SOUTH CAROLINA, 1976, RELATING TO PUBLIC 14 UTILITIES AND TELEPHONE, TELEGRAPH, AND EXPRESS 15 COMPANIES BY ADDING ARTICLE 23 SO AS TO ENACT 16 PROVISIONS ESTABLISHING TELEMARKETING PRIVACY 17 IN THIS STATE, INCLUDING PROVISIONS FOR, AMONG 18 OTHER THINGS, A DATABASE, CRIMINAL PENALTIES, 19 INVESTIGATIONS BY THE ATTORNEY GENERAL AND 20 THE CIRCUIT SOLICITORS, AND THE SEEKING OF 21 INJUNCTIVE AND OTHER RELIEF BY THE ATTORNEY 22 GENERAL; BY AMENDING SECTION 35-1-520, AS 23 AMENDED, RELATING TO THE UNIFORM SECURITIES 24 ACT, BROKER-DEALERS, AGENTS, INVESTMENT 25 ADVISERS, INVESTMENT ADVISER REPRESENTATIVES, 26 AND DENIAL, SUSPENSION, OR REVOCATION OF 27 REGISTRATION, SO AS TO PROVIDE THAT THE 28 SECURITIES COMMISSIONER MAY BY ORDER DENY, 29 SUSPEND, OR REVOKE A REGISTRATION IF HE FINDS 30 THAT THE ORDER IS IN THE PUBLIC INTEREST AND 31 THAT THE APPLICANT OR REGISTRANT OR, IN THE CASE 32 OF A BROKER-DEALER OR INVESTMENT ADVISER, A 33 PARTNER, OFFICER, OR DIRECTOR, A PERSON 34 OCCUPYING A SIMILAR STATUS OR PERFORMING 35 SIMILAR FUNCTIONS, OR A PERSON DIRECTLY OR 36 INDIRECTLY CONTROLLING THE BROKER-DEALER OR 37 INVESTMENT ADVISER HAS CONTACTED BY 38 TELEPHONE A PERSON OR AN ENTITY WHO HAS FILED A 39 NOTICE WITH THE LOCAL EXCHANGE CARRIER AS 40 PROVIDED IN SECTION 58-9-2710; AND BY AMENDING 41 SECTION 33-56-140, AS AMENDED, RELATING TO 42 SOLICITATION OF CHARITABLE FUNDS, 1 [272] 1
  3. 3. 1 INVESTIGATIONS OF CHARITABLE ORGANIZATIONS OR 2 PROFESSIONAL SOLICITORS, NOTICE OF 3 NONCOMPLIANCE, PENALTIES, AND GROUNDS FOR 4 INJUNCTION, SO AS TO, AMONG OTHER THINGS, 5 PROVIDE THAT IF A CHARITABLE ORGANIZATION, 6 PROFESSIONAL FUND-RAISING COUNSEL, OR 7 PROFESSIONAL SOLICITOR FAILS TO FILE A 8 REGISTRATION APPLICATION, STATEMENT, REPORT, OR 9 OTHER INFORMATION REQUIRED TO BE FILED WITH 10 THE SECRETARY OF STATE OR VIOLATES THE 11 PROVISIONS OF CHAPTER 56 OF TITLE 33 OR OF THE 12 TELEMARKETING PRIVACY ACT, THE SECRETARY OF 13 STATE SHALL NOTIFY THE CHARITABLE 14 ORGANIZATION, PROFESSIONAL FUND-RAISING 15 COUNSEL, OR PROFESSIONAL SOLICITOR OF THIS FACT 16 BY MAILING A NOTICE BY REGISTERED OR CERTIFIED 17 MAIL, WITH RETURN RECEIPT REQUESTED, TO ITS LAST 18 KNOWN ADDRESS, AND PROVIDE THAT THE 19 SECRETARY OF STATE, IF HE HAS REASON TO BELIEVE 20 THAT A PERSON IS KNOWINGLY AND WILFULLY 21 OPERATING IN VIOLATION OF CHAPTER 56 OF TITLE 33 22 OR OF THE TELEMARKETING PRIVACY ACT, MAY BRING 23 AN ACTION TO ENJOIN THE CHARITABLE 24 ORGANIZATION, PROFESSIONAL FUND-RAISING 25 COUNSEL, PROFESSIONAL SOLICITOR, OR OTHER 26 PERSON FROM CONTINUING THE VIOLATION, DOING 27 ANY OTHER ACTS IN FURTHERANCE OF IT, AND FOR 28 OTHER RELIEF THE COURTS CONSIDER APPROPRIATE. 29 30 Be it enacted by the General Assembly of the State of South 31 Carolina: 32 33 SECTION 1. This act may be cited as the “Telemarketing Privacy 34 Act”. 35 36 SECTION 2. Chapter 9, Title 58 of the 1976 Code is amended by 37 adding: 38 39 “Article 23 40 41 Telemarketing Privacy 42 1 [272] 2
  4. 4. 1 Section 58-9-2710. (A)(1) The General Assembly recognizes 2 that the citizens of this State receive numerous unsolicited 3 telephone calls from various entities, interests, and industries and 4 that telemarketers originate a high percentage of these calls. The 5 General Assembly further recognizes that the citizens of South 6 Carolina are entitled to enjoy freedom from unwanted intrusions 7 into their homes. It is the intent of this article to: 8 (a) strike a balance between free speech and citizens’ 9 rights to privacy; and 10 (b) provide those citizens who do not wish to receive 11 solicitations at home with a means of preventing such calls, while 12 allowing telemarketers to continue to call those citizens who do 13 wish to receive such calls at home. 14 (2) As used in this article, the term: 15 (a) ‘Caller identification service’ means a type of 16 telephone service which permits telephone subscribers to see the 17 telephone number of incoming telephone calls. 18 (b) ‘Previously established relationship’ means a prior or 19 existing relationship, not previously terminated by either party, 20 formed by a voluntary two-way communication between a person 21 or an entity and a residential subscriber with or without an 22 exchange of consideration, on the basis of an inquiry, application, 23 purchase, or transaction by the residential subscriber regarding 24 specific products or specific services offered by such person or 25 entity but shall not extend to other products or services offered by 26 such person or entity; this term also includes established 27 relationships with not-for-profit entities through such means as 28 donations to the entity or participation in the activities of the 29 entity. 30 (c) ‘Residential subscriber’ means a person who has 31 subscribed to residential telephone service from a local exchange 32 carrier or the other persons living or residing with such person. 33 (d) ‘Unsolicited telephone call’ means any voice 34 communication over a telephone line from or on behalf of a person 35 or an entity with whom a residential subscriber has no previously 36 established relationship or personal relationship. Such 37 communication may be from a live operator, through the use of a 38 dual party relay system as defined in Section 58-9-2510, or by 39 other means. 40 (e) ‘Local exchange carrier’ means either an incumbent 41 local exchange carrier or a new entrant local exchange carrier, as 42 defined in Section 58-9-10. 1 [272] 3
  5. 5. 1 (B) No person or entity shall make or cause to be made an 2 unsolicited telephone call advertising or offering for sale, lease, 3 rental, or as a gift any goods, services, or property or soliciting 4 donations of money, goods, services, or property to the telephone 5 line of any residential subscriber in this State who has given notice 6 to the local exchange carrier, in accordance with subsection (C) of 7 this section, of such subscriber’s objection to receiving such 8 unsolicited telephone calls. 9 (C)(1) Each local exchange carrier shall establish and provide, 10 at no cost to residential subscribers, a database to compile a list of 11 telephone numbers of residential subscribers who object to 12 receiving unsolicited telephone calls of a type described in 13 subsection (b) of this section. It shall be the duty of each local 14 exchange carrier to have such database in operation no later than 15 July 1, 2000. 16 (2) Such database may be operated by each local exchange 17 carrier or by another entity under contract with each local 18 exchange carrier. 19 (3) In order to create the database required by this section, 20 each local exchange carrier shall: 21 (a) inform its residential subscribers of the opportunity to 22 provide notification to the local exchange carrier or its contractor 23 that such subscriber objects to receiving unsolicited telephone 24 calls: 25 (b) mail to each residential subscriber a returnable card by 26 which the residential subscriber may give notice to the local 27 exchange carrier or its contractor of his objection to receiving such 28 calls or revocation of such notice; 29 (c) specify the length of time for which a notice of 30 objection shall be effective and the effect of a change of telephone 31 number on such notice; 32 (d) specify the methods by which a person desiring to 33 make unsolicited telephone calls can obtain access to the database 34 as required to avoid calling the telephone numbers of residential 35 subscribers included in the database. 36 (4) If, pursuant to 47 U.S.C. Section 227(c)(3), the Federal 37 Communications Commission establishes a single national 38 database of telephone numbers of subscribers who object to 39 receiving telephone solicitations, the local exchange carrier shall 40 include the part of such single national database that relates to 41 South Carolina in the database established under this section. 42 (D) A person or an entity desiring to make unsolicited 43 telephone calls shall be charged a fee payable to the local exchange 1 [272] 4
  6. 6. 1 carrier for access to or for paper or electronic copies of the 2 database established under this section. The local exchange carrier 3 may require that fees so charged are sufficient to cover the 4 carrier’s costs in the compilation and preparation of the database. 5 (E)(1) A person or an entity who makes an unsolicited 6 telephone call to the telephone line of a residential subscriber in 7 this State, at the beginning of such call, shall state clearly the 8 identity of the person or entity initiating the call. 9 (2) A person or an entity who makes an unsolicited 10 telephone call to the telephone line of a residential subscriber in 11 this State shall not utilize any method to block or otherwise 12 circumvent such subscriber’s use of a caller identification services. 13 (3)(a) A person or an entity who makes an unsolicited 14 telephone call, other than a call to the telephone line of a 15 residential subscriber in this State for the purpose of providing, 16 offering to provide, or arranging for other to provide goods or 17 services to the customer in exchange for consideration, at the 18 beginning of such call, shall disclose the following information: 19 (i)the identity of the seller; 20 (ii) that the purpose of the call is to sell goods or 21 services; 22 (iii) the nature of the goods or services; 23 (iv) that no purchase or payment is necessary to be able 24 to win a prize or participate in a prize promotion if a prize 25 promotion is offered. This disclosure must be made before or in 26 conjunction with the description of the prize to the person called. 27 If requested by that person, the telemarketer must disclose the 28 no-purchase/no-payment entry method for the prize promotion. 29 (b) Before a customer pays for goods or services offered, 30 the telemarketer shall disclose to the customer the following 31 material information: 32 (i)the total costs to purchase, receive, or use, and the 33 quantity of, any goods or services that are the subject of the sales 34 offer; 35 (ii) all material restrictions, limitations, or conditions to 36 purchase, receive, or use the goods or services that are the subject 37 of the sales offer; 38 (iii) if the seller has a policy of not making refunds, 39 cancellations, exchanges, or repurchases, a statement informing the 40 customer that this is the seller’s policy; or, if the seller or 41 telemarketer makes a representation about a refund, cancellation, 42 exchange, or repurchase policy, a statement of all material terms 43 and conditions of such policy; 1 [272] 5
  7. 7. 1 (iv) any material aspect of an investment opportunity 2 including, but not limited to, risk, liquidity, earnings potential, or 3 profitability. 4 (c) The telemarketer’s sales transaction shall be 5 considered final only after the customer has received a written 6 notice which shall 7 contain in not less than 12-point bold face type the oral disclosures 8 required by (E)(3)(b) of this section. Such written notice must be 9 delivered by certified mail to the customer. The customer’s 10 payment is not due until after receipt of the required notice. 11 (F) The Attorney General and the State’s judicial circuit 12 solicitors shall investigate complaints received concerning 13 violations of this article. A person violating the provisions of this 14 article is guilty of a misdemeanor and, upon conviction for a first 15 offense, must be fined not more than two hundred dollars or 16 imprisoned for not more than thirty days; upon conviction for a 17 second offense, must be fined not more than one thousand dollars 18 or imprisoned for one year; and upon conviction for a third or 19 subsequent offense, must be fined not more than five thousand 20 dollars or imprisoned for not more than five years. Each violation 21 constitutes a separate offense for purposes of the criminal penalties 22 in this section. In addition, if the Attorney General finds that there 23 has been a violation of this article, he may seek other relief, 24 including injunctive relief, as the court considers appropriate 25 against the telephone solicitor. 26 (G) A court of this State may exercise personal jurisdiction 27 over a nonresident or his executor or administrator as to an action 28 or proceeding authorized by this section in accordance with the 29 provisions of Title 36, Chapter 2, Part 8. 30 (H) The remedies, duties, prohibitions, and penalties of this 31 section are not exclusive and are in addition to all other causes of 32 action, remedies, and penalties provided by law. 33 (I) No provider of telephone caller identification service shall 34 be held liable for violations of this section committed by other 35 persons or entities.” 36 37 SECTION 3. Section 35-1-520(1) of the 1976 Code, as last 38 amended by Act 134 of 1997, is further amended to read: 39 40 “(1) The Securities Commissioner may by order deny, suspend, 41 or revoke any a registration if he finds (a) that the order is in the 42 public interest and (b) that the applicant or registrant or, in the case 43 of a broker-dealer or investment adviser, any a partner, officer, or 1 [272] 6
  8. 8. 1 director, any a person occupying a similar status or performing 2 similar functions or any a person directly or indirectly controlling 3 the broker-dealer or investment adviser: 4 (i) has filed an application for registration which as of its 5 effective date, or as of any date after filing in the case of an order 6 denying effectiveness, was incomplete in any material respect or 7 contained any a statement which was, in light of the circumstances 8 under which it was made, false or misleading with respect to any 9 material fact; 10 (ii) has wilfully violated or wilfully failed to comply with 11 any provision of this chapter or a predecessor law or any rule or 12 order under this chapter or a predecessor law; 13 (iii) has been convicted, within the past ten years, of any a 14 misdemeanor involving a security or any aspect of the securities 15 business or any felony; 16 (iv) is permanently or temporarily enjoined by any a court of 17 competent jurisdiction from engaging in or continuing any conduct 18 or practice involving any aspect of the securities business; 19 (v) is the subject of an order of the Securities Commissioner 20 denying, suspending, or revoking registration as a broker-dealer, 21 agent, investment adviser, or investment adviser representative; 22 (vi) is the subject of an order entered within the past five 23 years by the securities administrator of any other another state or 24 by the Securities and Exchange Commission denying or revoking 25 registration as a broker-dealer, agent, investment adviser, or 26 investment adviser representative or the substantial equivalent of 27 those terms as defined in this chapter, is the subject of an order of 28 the Securities and Exchange Commission suspending or expelling 29 him from a national securities exchange or national securities 30 association registered under the Securities Exchange Act of 1934 31 or is the subject of a United States post office fraud order; but (1) 32 the Securities Commissioner may not institute a revocation or 33 suspension proceeding under this item (vi) more than one year 34 from the date of the order relied on and (2) he may not enter an 35 order under this item (vi) on the basis of an order under another 36 state act unless that order was based on facts which would 37 currently constitute a ground for an order under this section; 38 (vii) has engaged in dishonest or unethical practices in the 39 securities business; 40 (viii) is insolvent, either in the sense that his liabilities 41 exceed his assets or in the sense that he cannot meet his obligations 42 as they mature, but the Securities Commissioner may not enter an 43 order against a broker-dealer or investment adviser under this item 1 [272] 7
  9. 9. 1 (viii) without a finding of insolvency as to the broker-dealer or 2 investment adviser; or 3 (ix) is not qualified on the basis of such factors as training, 4 experience and knowledge of the securities business, except as 5 otherwise provided in Section 35-1-530; or 6 (x) has contacted by telephone a person or an entity who has 7 filed a notice with the local exchange carrier as provided in Section 8 58-9-2710(B).” 9 10 SECTION 4. Section 33-56-140(2) of the 1976 Code, as last 11 amended by Act 368 of 1998, is further amended to read: 12 13 “(2) If any a charitable organization, professional fund-raising 14 counsel, or professional solicitor fails to file a registration 15 application, statement, report, or other information required to be 16 filed with the Secretary of State under this chapter, or violates the 17 provisions of this chapter or of the Telemarketing Privacy Act, the 18 Secretary of State shall notify the delinquent charitable 19 organization, professional fund-raising counsel, or professional 20 solicitor of this fact by mailing a notice by registered or certified 21 mail, with return receipt requested, to its last known address. If 22 the required registration application, statement, annual report, 23 assurance of voluntary compliance, or other information is not 24 filed or if the existing violation is not discontinued within fifteen 25 days after the formal notification or receipt of the notice, the 26 Secretary of State may assess an administrative fine not to exceed 27 two thousand dollars against the delinquent organization.” 28 29 SECTION 5. Section 33-56-140(3)(a) of the 1976 Code, as added 30 by Act 461 of 1994, is amended to read: 31 32 “(a) a person is knowingly and wilfully operating in violation 33 of the provisions of this chapter or of the Telemarketing Privacy 34 Act;” 35 36 SECTION 6. The provisions in Section 58-9-2710 of the 1976 37 Code, as contained in Section 2 of this act, relating to 38 administrative establishment of the database, including receipt of 39 notices by the local exchange carriers, take effect upon approval by 40 the Governor. All other provisions of this act take effect July 1, 41 2000. 42 43 ----XX---- 1 [272] 8

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