H. B. 2604
(By Delegates Amores, Douglas, Johnson,
Compton, Staton and Campbell)
[Introduced January 14, 1998; referred to the
Committee on the Judicairy.]
A BILL to amend and reenact section one hundred two, article one,
chapter forty-six-a of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; and to further
amend said chapter by adding thereto a new article,
designated article six-e, all relating to adoption of the
telemarketing registration and fraud prevention act;
purpose of the act; title and definitions; registration of
telemarketers; record keeping; exclusions; contract
disclosure requirements; prohibited acts and practices;
civil remedies.
Be it enacted by the Legislature of West Virginia:
That section one hundred two, article one, chapter
forty-six-a of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted; and
that said chapter be further amended by adding thereto a new article, designated article six-e, all to read as follows:
ARTICLE 1. SHORT TITLE, DEFINITIONS AND GENERAL PROVISIONS.
§46A-1-102. General definitions.
In addition to definitions appearing in subsequent articles,
in this chapter:
(1) "Actuarial method" means the method, defined by rules
adopted by the commissioner, of allocating payments made on a
debt between principal or amount financed and loan finance charge
or sales finance charge pursuant to which a payment is applied
first to the accumulated loan finance charge or sales finance
charge and the balance is applied to the unpaid principal or
unpaid amount financed.
(2) "Agreement" means the bargain of the parties in fact as
found in their language or by implication from other
circumstances including course of dealing or usage of trade or
course of performance. A "consumer credit agreement" is an
agreement where credit is granted.
(3) "Agricultural purpose" means a purpose related to the
production, harvest, exhibition, marketing, transportation,
processing or manufacture of agricultural products by a natural
person who cultivates, plants, propagates or nurtures the
agricultural products. "Agricultural products" includes
agricultural, horticultural, viticultural and dairy products, livestock, wildlife, poultry, bees, forest products, fish and
shellfish, and any products thereof, including processed and
manufactured products, and any and all products raised or
produced on farms and any processed or manufactured products
thereof.
(4) "Amount financed" means the total of the following items
to the extent that payment is deferred:
(a) The cash price of the goods, services or interest in
land, less the amount of any down payment whether made in cash or
in property traded in;
(b) The amount actually paid or to be paid by the seller
pursuant to an agreement with the buyer to discharge a security
interest in or a lien on property traded in; and
(c) If not included in the cash price:
(i) Any applicable sales, use, privilege, excise or
documentary stamp taxes;
(ii) Amounts actually paid or to be paid by the seller for
registration, certificate of title or license fees; and
(iii) Additional charges permitted by this chapter.
(5) "Average daily balance" in a billing cycle for which a
sales finance charge or loan finance charge is made is the sum of
the amount unpaid each day during that cycle divided by the
number of days in that cycle. The amount unpaid on a day is determined by adding to the balance, if any, unpaid as of the
beginning of that day all purchases and other debits and
deducting all payments and other credits made or received as of
that day.
(6) The "cash price" of goods, services or an interest in
land means the price at which the goods, services or interest in
land are offered for sale by the seller to cash buyers in the
ordinary course of business, and may include: (a) Applicable
sales, use, privilege, and excise and documentary stamp taxes;
(b) the cash price of accessories or related services such as
delivery, installation, servicing, repairs, alterations and
improvements; and (c) amounts actually paid or to be paid by the
seller for registration, certificate of title or license fees.
(7) "Closing costs" with respect to a debt secured by an
interest in land include:
(a) Fees or premiums for title examination, title insurance
or similar purposes including surveys;
(b) Fees for preparation of a deed, deed of trust, mortgage,
settlement statement or other documents;
(c) Escrows for future payments of taxes and insurance;
(d) Official fees and fees for notarizing deeds and other
documents;
(e) Appraisal fees; and
(f) Credit reports.
(8) "Code" means the official code of West Virginia, one
thousand nine hundred thirty-one, as amended.
(9) "Commercial facsimile transmission" means the electronic
or telephonic transmission in the state to a facsimile device to
encourage a person to purchase goods, realty or services.
(10) "Commissioner" means the commissioner of banking of West
Virginia.
(11) "Conspicuous": A term or clause is conspicuous when it
is so written that a reasonable person against whom it is to
operate ought to have noticed it. Whether a term or clause is
conspicuous or not is for decision by the court.
(12) "Consumer" means a natural person who incurs debt
pursuant to a consumer credit sale or a consumer loan, or debt or
other obligations pursuant to a consumer lease.
(13) (a) Except as provided in paragraph (b) of this
subdivision, "consumer credit sale" is a sale of goods, services
or an interest in land in which:
(i) Credit is granted either by a seller who regularly
engages as a seller in credit transactions of the same kind or
pursuant to a seller credit card;
(ii) The buyer is a person other than an organization;
(iii) The goods, services or interest in land are purchased primarily for a personal, family, household or agricultural
purpose;
(iv) Either the debt is payable in installments or a sales
finance charge is made; and
(v) With respect to a sale of goods or services, the amount
financed does not exceed forty-five thousand dollars or the sale
is of a factory-built home as defined in section two, article
fifteen, chapter thirty-seven of this code.
(b) "Consumer credit sale" does not include a sale in which
the seller allows the buyer to purchase goods or services
pursuant to a lender credit card or similar arrangement.
(14) (a) "Consumer lease" means a lease of goods:
(i) Which a lessor regularly engaged in the business of
leasing makes to a person, other than an organization, who takes
under the lease primarily for a personal, family, household or
agricultural purpose;
(ii) In which the total of payments under the lease,
excluding payments for options to renew or buy, do not exceed
forty-five thousand dollars or in which the lease is of a
factory-built home as defined in section two, article fifteen,
chapter thirty-seven of this code; and
(iii) Which is for a term exceeding four months.
(b) "Consumer lease" does not include a lease made pursuant to a lender credit card or similar arrangement.
(15) "Consumer loan" is a loan made by a person regularly
engaged in the business of making loans in which:
(a) The debtor is a person other than an organization;
(b) The debt is incurred primarily for a personal, family,
household or agricultural purpose;
(c) Either the debt is payable in installments or a loan
finance charge is made; and
(d) Either the principal does not exceed forty-five thousand
dollars or the debt is secured by an interest in land or a
factory-built home as defined in section two, article fifteen,
chapter thirty-seven of this code.
(16) "Cosigner" means a natural person who assumes liability
for the obligation on a consumer credit sale or consumer loan
without receiving goods, services or money in return for the
obligation or, in the case of a revolving charge account or
revolving loan account of a consumer, without receiving the
contractual right to obtain extensions of credit under the
account. The term cosigner includes any person whose signature
is requested as a condition to granting credit to a consumer or
as a condition for forbearance on collection of a consumer's
obligation that is in default. The term cosigner does not
include a spouse whose signature is required to
perfect a security interest. A person who meets the definition in this
paragraph is a "cosigner" whether or not the person is designated
as such on the credit obligation.
(17) "Credit" means the privilege granted by a creditor to a
debtor to defer payment of debt or to incur debt and defer its
payment.
(18) "Earnings" means compensation paid or payable to an
individual or for his
or her account for personal services
rendered or to be rendered by him
or her, whether denominated as
wages, salary, commission, bonus or otherwise, and includes
periodic payments pursuant to a pension, retirement or disability
program.
(19) "Facsimile device" means a machine that receives and
copies reproductions or facsimiles of documents or photographs
that have been transmitted electronically or telephonically over
telecommunications lines.
(20) "Federal Consumer Credit Protection Act" means the
"Consumer Credit Protection Act" (Public Law 90-321; 82 Stat.
146), as amended, and includes regulations issued pursuant to
that act.
(21) "Goods" includes goods not in existence at the time the
transaction is entered into and gift and merchandise
certificates, but excludes money, chattel paper, documents of title and instruments.
(22) "Home solicitation sale" means a consumer credit sale in
excess of twenty-five dollars in which the buyer receives a
solicitation of the sale at a place other than the seller's
business establishment at a fixed location and the buyer's
agreement or offer to purchase is there given to the seller or a
person acting for the seller.
"Home solicitation sale" shall
include all telemarketing sales as defined by section three,
article six-e, chapter forty-six-a of this code. The term does
not include a sale made pursuant to a preexisting open-end credit
account with the seller in existence for at least three months
prior to the transaction, a sale made pursuant to prior
negotiations between the parties at the seller's business
establishment at a fixed location, a sale of motor vehicles,
mobile homes or farm equipment or a sale which may be rescinded
under the federal Truth in Lending Act (being Title I of the
federal Consumer Credit Protection Act). A sale which would be
a home solicitation sale if credit were extended by the seller is
a home solicitation sale although the goods or services are paid
for, in whole or in part, by a consumer loan in which the
creditor is subject to claims and defenses arising from the sale.
(23) Except as otherwise provided, "lender" includes an
assignee of the lender's right to payment but use of the term does not in itself impose on an assignee any obligation of the
lender.
(24) "Lender credit card or similar arrangement" means an
arrangement or loan agreement, other than a seller credit card,
pursuant to which a lender gives a debtor the privilege of using
a credit card, letter of credit or other credit confirmation or
identification in transactions out of which debt arises:
(a) By the lender's honoring a draft or similar order for the
payment of money drawn or accepted by the consumer;
(b) By the lender's payment or agreement to pay the
consumer's obligations; or
(c) By the lender's purchase from the obligee of the
consumer's obligations.
(25) "Loan" includes:
(a) The creation of debt by the lender's payment of or
agreement to pay money to the consumer or to a third party for
the account of the consumer other than debts created pursuant to
a seller credit card;
(b) The creation of debt by a credit to an account with the
lender upon which the consumer is entitled to draw immediately;
(c) The creation of debt pursuant to a lender credit card or
similar arrangement; and
(d) The forbearance of debt arising from a loan.
(26) (a) "Loan finance charge" means the sum of: (i) All
charges payable directly or indirectly by the debtor and imposed
directly or indirectly by the lender as an incident to the
extension of credit, including any of the following types of
charges which are applicable: Interest or any amount payable
under a point, discount or other system of charges, however
denominated, premium or other charge for any guarantee or
insurance protecting the lender against the consumer's default or
other credit loss; and (ii) charges incurred for investigating
the collateral or credit worthiness of the consumer or for
commissions or brokerage for obtaining the credit, irrespective
of the person to whom the charges are paid or payable, unless the
lender had no notice of the charges when the loan was made. The
term does not include charges as a result of default, additional
charges, delinquency charges or deferral charges.
(b) If a lender makes a loan to a consumer by purchasing or
satisfying obligations of the consumer pursuant to a lender
credit card or similar arrangement, and the purchase or
satisfaction is made at less than the face amount of the
obligation, the discount is not part of the loan finance charge.
(27) "Merchandise certificate" or "gift certificate" means a
writing issued by a seller or issuer of a seller credit card, not
redeemable in cash and usable in its face amount in lieu of cash in exchange for goods or services.
(28) "Official fees" means:
(a) Fees and charges prescribed by law which actually are or
will be paid to public officials for determining the existence of
or for perfecting, releasing, terminating or satisfying a
security interest related to a consumer credit sale or consumer
loan; or
(b) Premiums payable for insurance or fees escrowed in a
special account for the purpose of funding self-insurance or its
equivalent in lieu of perfecting a security interest otherwise
required by the creditor in connection with the sale, lease or
loan, if
such the premium or fee does not exceed the fees and
charges described in paragraph (a) of this subdivision which
would otherwise be payable.
(29) "Organization" means a corporation, government or
governmental subdivision or agency, trust, estate, partnership,
cooperative or association.
(30) "Payable in installments" means that payment is required
or permitted by agreement to be made in: (a) Two or more
periodic payments, excluding a down payment, with respect to a
debt arising from a consumer credit sale pursuant to which a
sales finance charge is made; (b) four or more periodic payments,
excluding a down payment, with respect to a debt arising from a consumer credit sale pursuant to which no sales finance charge is
made; or (c) two or more periodic payments with respect to a debt
arising from a consumer loan. If any periodic payment other than
the down payment under an agreement requiring or permitting two
or more periodic payments is more than twice the amount of any
other periodic payment, excluding the down payment, the consumer
credit sale or consumer loan is "payable in installments".
(31) "Person" or "party" includes a natural person or an
individual, and an organization.
(32) "Person related to" with respect to an individual means:
(a) The spouse of the individual; (b) a brother, brother-in-law,
sister or sister-in-law of the individual; (c) an ancestor or
lineal descendant of the individual or his
or her spouse; and (d)
any other relative, by blood or marriage, of the individual or
his
or her spouse who shares the same home with the individual.
"Person related to" with respect to an organization means: (a)
A person directly or indirectly controlling, controlled by or
under common control with the organization; (b) an officer or
director of the organization or a person performing similar
functions with respect to the organization or to a person related
to the organization; (c) the spouse of a person related to the
organization; and (d) a relative by blood or marriage of a person
related to the organization who shares the same home with him
or her.
(33) "Precomputed loan". A loan, refinancing or
consolidation is "precomputed" if:
(A) The debt is expressed as a sum comprising the principal
and the amount of the loan finance charge computed in advance; or
(B) The loan is expressed in terms of the principal amount;
the loan installment payments are a scheduled, fixed amount
including principal and interest and assume payment on the
installment due date; and interest payments will not vary or
result in an adjustment during the term of the loan or at its
final payment as a result of the actual installment payment
dates.
(34) "Precomputed sale". A sale, refinancing or
consolidation is "precomputed" if:
(A) The debt is expressed as a sum comprising the amount
financed and the amount of the sales finance charge computed in
advance; or
(B) The debt is expressed in terms of the principal amount;
the debt installment payments are a scheduled, fixed amount
including principal and interest and assume payment on the
installment due date; and interest payments will not vary or
result in an adjustment during the term of the debt or at its
final payment as a result of the actual installment payment dates.
(35) "Presumed" or "presumption" means that the trier of fact
must find the existence of the fact presumed unless and until
evidence is introduced which would support a finding of its
nonexistence.
(36) "Principal" of a loan means the total of:
(a) The net amount paid to, receivable by or paid or payable
for the account of the debtor;
(b) The amount of any discount excluded from the loan finance
charge; and
(c) To the extent that payment is deferred:
(i) Amounts actually paid or to be paid by the lender for
registration, certificate of title or license fees if not
included in paragraph (a) of this subdivision; and
(ii) Additional charges permitted by this chapter.
(37) "Regulated consumer lender" means a person authorized to
make or take assignments of regulated consumer loans.
(38) "Regulated consumer loan" means a consumer loan,
including a loan made pursuant to a revolving loan account, in
which the rate of the loan finance charge exceeds eighteen
percent per year as determined according to the actuarial method,
except where the loan qualifies for federal law preemption from
state interest rate limitations, including federal law bank parity provisions, or where the lender is specifically permitted
by state law other than article four of this chapter to make the
loan at that rate without a requirement the lender hold a
regulated consumer lender license.
(39) "Revolving charge account" means an agreement between a
seller and a buyer by which: (a) The buyer may purchase goods or
services on credit or a seller credit card; (b) the balances of
amounts financed and the sales finance and other appropriate
charges are debited to an account; (c) a sales finance charge if
made is not precomputed but is computed periodically on the
balances of the account from time to time; and (d) there is the
privilege of paying the balances in installments.
(40) "Revolving loan account" means an arrangement between a
lender and a consumer including, but not limited to, a lender
credit card or similar arrangement, pursuant to which: (a) The
lender may permit the consumer to obtain loans from time to time;
(b) the unpaid balances of principal and the loan finance and
other appropriate charges are debited to an account; (c) a loan
finance charge if made is not precomputed but is computed
periodically on the outstanding unpaid balances of the principal
of the consumer's account from time to time; and (d) there is the
privilege of paying the balances in installments.
(41) "Sale of goods" includes any agreement in the form of a bailment or lease of goods if the bailee or lessee agrees to pay
as compensation for use a sum substantially equivalent to or in
excess of the aggregate value of the goods involved and it is
agreed that the bailee or lessee will become, or for no other or
a nominal consideration has the option to become, the owner of
the goods upon full compliance with his
or her obligations under
the agreement.
(42) "Sale of an interest in land" includes a lease in which
the lessee has an option to purchase the interest and all or a
substantial part of the rental or other payments previously made
by him
or her are applied to the purchase price.
(43) "Sale of services" means furnishing or agreeing to
furnish services and includes making arrangements to have
services furnished by another.
(44) "Sales finance charge" means the sum of: (a) All
charges payable directly or indirectly by the buyer and imposed
directly or indirectly by the seller or issuer of a seller credit
card as an incident to the extension of credit, including any of
the following types of charges which are applicable: Time-price
differential, however denominated, including service, carrying or
other charge, premium or other charge for any guarantee or
insurance protecting the seller against the buyer's default or
other credit loss; and (b) charges incurred for investigating the collateral or credit worthiness of the buyer or for commissions
or brokerage for obtaining the credit, irrespective of the person
to whom the charges are paid or payable; unless the seller had no
notice of the charges when the credit was granted. The term does
not include charges as a result of default, additional charges,
delinquency charges or deferral charges. If the seller or issuer
of a seller credit card purchases or satisfies obligations of the
consumer and the purchase or satisfaction is made at less than
the face amount of the obligation, the discount is not part of
the sales finance charge.
(45) Except as otherwise provided, "seller" includes an
assignee of the seller's right to payment but use of the term
does not in itself impose on an assignee any obligation of the
seller.
(46) "Seller credit card" means an arrangement pursuant to
which a person gives to a buyer or lessee the privilege of using
a credit card, letter of credit, or other credit confirmation or
identification primarily for the purpose of purchasing or leasing
goods or services from that person, that person and any other
person or persons, a person related to that person, or others
licensed or franchised or permitted to do business under his
or
her business name or trade name or designation or on his behalf.
(47) "Services" includes: (a) Work, labor and other personal services; (b) privileges with respect to transportation, use of
vehicles, hotel and restaurant accommodations, education,
entertainment, recreation, physical culture, hospital
accommodations, funerals, cemetery accommodations and the like;
and (c) insurance.
(48) "Supervised financial organization" means any
organization, corporation or person, other than an insurance
company or other organization primarily engaged in an insurance
business, which is required under state law to register or obtain
a license from the commissioner of banking before conducting
business in this state; or which is authorized under federal law
to make consumer loans without a license from the state
commissioner of banking, provided
such the loans are subject to
supervision and examination by an official or agency of the
United States.
ARTICLE 6A. TELEMARKETING REGISTRATION AND FRAUD ACT.
§46A-6E-101. Purpose.
An article requiring telemarketers to register and
establishes standards of conduct for those telemarketers. The
article provides penalties for violations of the article.
§46A-6E-102. Short title.
This article shall be known and is to be cited as "The
Telemarketing Registration and Fraud Prevention Act."
§46A-6E-103. Definitions.
As used in this article:
(a) "Consumer and purchaser" means a person who is, or may be
required to pay for goods or services offered by a telemarketer
through telemarketing.
(b) "Goods or services" means any real property or any
tangible or intangible personal property or services of any kind
provided or offered to a person.
(c) "Investment opportunity" means anything tangible or
intangible, that is offered for sale, sold or traded based,
wholly or in part, on representations, either express or implied,
about past, present or future income, profit or appreciation.
(d) "Material aspect or element" means any factor likely to
affect a person's choice of, or conduct regarding goods or
services and includes currency values and comparative expressions
of value including, but not limited to, percentages or multiples.
(e) "Prize" means anything offered or purportedly offered and
given or purportedly given to a person by chance.
(f) "Prize promotion" means a sweepstakes or other game of
chance or an oral or written, express or implied representation
that a person has won, has been selected to receive or is
eligible to receive a prize or purported prize.
(g) "Seller" means any person, who, in connection with a telemarketing transaction, provides, offers to provide or
arranges for others to provide goods or services to the customer
in exchange for consideration.
(h) "Solicitation" means a written or oral notification or
advertisement that meets any one of the following terms:
(1) The notification or advertisement is transmitted by or on
behalf of the seller and by any printed, audio, video, cinematic,
telephonic or electronic means.
(2) In the case of a notification or advertisement other than
by telephone, either of the following conditions is met:
(A) The notification or advertisement is followed by a
telephone call from a telemarketer or seller.
(B) The notification or advertisement invites a response by
telephone and through that response, a telemarketer attempts to
make a sale of goods or services.
(i) "Telemarketing" means a plan, program or campaign which
is conducted to induce the purchase of goods or services by use
of one or more telephones and which involves more than one
telephone call.
(j) "Telemarketer" means any person who in connection with
telemarketing, initiates or receives telephone calls to or from
a consumer in this state or when the person acting in connection
with telemarketing is located within this state when such calls are initiated or received. A telemarketer includes, but is not
limited to, any such person that is an owner, operator, officer,
director or partner in the management activities of a business.
§46A-6E-104. Registration of telemarketers.
(a) General rule: No person shall act as a seller or
telemarketer without first having registered with the department
of tax and revenue.
(1) The initial application for registration shall be made at
least sixty days prior to offering consumer goods or services,
and or offering for sale consumer goods or services through any
medium, and an application for renewal shall be made on an annual
basis thereafter.
(2) The application for a certificate of registration or
renewal shall include, but not be limited to, the following
information:
(A) The true name, current address, telephone number and
location of the seller, including each name under which the
seller intends to engage in telemarketing;
(B) Each occupation or business that the seller's principal
owner has engaged in for two years immediately preceding the date
of the application;
(C) Whether any principal or manager has been convicted or
plead guilty to or is being prosecuted by indictment for racketeering, violations of state or federal securities laws or
a theft offense;
(D) Whether there has been entered against any principal or
manager an injunction, temporary restraining order or a final
judgment in any civil or administrative action, involving fraud,
theft, racketeering, embezzlement, fraudulent conversion or
misappropriation of property, including any pending litigation
against the applicant;
(E) Whether the seller, at any time during the previous seven
years, has filed for bankruptcy, been adjudged bankrupt or been
reorganized because of insolvency;
(F) The true name, current home address, date of birth,
social security number and all other names of the following:
(1) Each telemarketer or other person to be employed by the
seller;
(2) Each person participating in or responsible for the
management of the seller's business;
(3) Each person, office manager or supervisor principally
responsible for the management of the seller's business;
(G) The name, address and account number of every institution
where banking or any other monetary transactions are done by the
seller; and
(H) A copy of all scripts, outlines or presentation material the seller will require the telemarketer to use when soliciting
as well as all sales information to be provided by the seller to
a purchaser in connection with any solicitation.
(b) Security requirement: The application for registration
or renewal shall be accompanied by a surety bond in the amount of
one hundred thousand dollars. The bond shall provide for the
indemnification of any person suffering a loss as the result of
violation of this article. The surety for any cause may cancel
the bond upon giving a sixty-day written notice by certified mail
to the principal and to the department of tax and revenue.
Unless the bond is replaced by that of another surety before the
expiration of the sixty-day notice of cancellation, the
registration of the principal of this article shall be treated as
lapsed.
(1) The surety bond shall remain in effect for three years
from the period the telemarketing business ceases to operate in
this state.
(2) Any business required under this article to file a bond
with a registration application, may file, in lieu thereof, a
certificate of deposit, cash or government bond in the amount of
one hundred thousand dollars.
(3) The department of tax and revenue shall hold such cash,
certificate of deposit or government bond for three years from the period the telemarketing business ceases to operate or
registration lapses in order to pay claims made against the
telemarketing business during its period of operation.
(4) The registration of the telemarketing business will be
treated as lapsed if at any time, the amount of the bond, cash,
certificate of deposit or government bond falls below the amount
required by this subsection.
(5) The aggregate liability of the surety company to all
persons injured by a telemarketer's violations may not exceed the
amount of the bond.
(c) The following shall constitute a violation of this
article and shall be a felony:
(1) Failure to register;
(2) Failure to meet the above security requirement;
(3) Failure to maintain a certificate of registration;
(4) Including any false or misleading information on a
registration application; and
(5) Misrepresenting that a seller is registered.
§46A-6E-105. Record keeping requirements.
(a) Any telemarketer shall keep for a period of twenty-four
months from the date the record is produced, records of all
financial transactions, written notices, disclosures and
acknowledgments, in the form, manner, format or place as they keep such records in the ordinary course of business, including,
but not limited to:
(1) All substantially different advertising, brochures,
telemarketing scripts and promotional materials;
(2) The name and last known address of each prize recipient
and the prize awarded;
(3) The name and last known address of each customer, the
goods or services purchased, the date such goods or services were
shipped or provided and the amount provided, and the amount paid
by the customer for the goods or services;
(4) The name, any fictitious name used, the last known home
address and telephone number, and the job title for all current
and former employees directly involved in telephone sales:
Provided, That if the seller permits fictitious names to be used
by employees, each fictitious name must be traceable to only one
specific employee; and
(5) All written authorizations required to be provided or
received under this article.
(b) In the event of any dissolution or termination of the
telemarketer's business, the principal of that telemarketer shall
maintain all records as required under this section. In the
event of any sale, assignment or other change in ownership of the
seller's business, the successor shall maintain all records required under this section.
§46A-6E-106. Acts and practices not covered.
(a) Telephone calls in which the sale of goods or services is
not completed, and payment or authorization of payment is not
required, until after a face-to-face sales presentation by the
telemarketer; and
(b) Telephone calls initiated by a customer that are not the
result of any solicitation by a seller or telemarketer.
§46A-6E-107. Disclosures and contract requirements.
(a) The telemarketer shall provide all of the following when
contacting a consumer:
(1) Within the first minute of the call and prior to any
sales pitch:
(A) That the true purpose of the telephone call is to make a
sale;
(B) The telemarketer's true name and the company on whose
behalf the solicitation is being made; and
(C) The identity of the goods or services being sold.
(2) The total cost of the goods or services that are the
subject of the telemarketing sales call;
(3) Any restrictions, limitations or conditions to purchase
the goods or services that are the subject of a telemarketing
sales call;
(4) Any material aspect of the performance, quality,
efficacy, nature or basic characteristics of goods or services
that are the subject of a telemarketing sales call;
(5) Any material aspect of the nature or terms of the refund,
cancellation, exchange or repurchase policies;
(6) Any material aspect of an investment opportunity being
offered, including benefits, the price of the land or other
investment, the location of the investment, and the reasonable
likelihood of success of the investment opportunity;
(7) Any material elements of a prize promotion, including:
(A) A description of the prize;
(B) Its market value;
(C) All material conditions to receive or redeem the prize;
(D) The actual number of each prize to be awarded;
(E) The odds of being able to receive the prize and, if the
odds are not calculable in advance, the factors and methods used
in calculating the odds;
(F) That no purchase or payment of any kind is required to
win a prize or to participate in a prize promotion; and
(G) The no-purchase or no-payment method of participating in
the prize promotion, with either instructions on how to
participate or an address or local or toll-free telephone number
to which customers may write or call for information on how to participate.
(b) (1) The telemarketer's sales transaction shall only be
considered final after the customer has received a notice as
required by subdivision (2), subsection (b) of this section.
(2) The telemarketer shall furnish the purchaser, in the same
language as that principally used in the sales presentation, a
written notice, which shall contain in not less than ten-point
boldface type, a statement in substantially the following form:
You, the purchaser, may cancel this transaction without any
penalty or obligation at any time prior to midnight of the third
business day after receipt of this notice. If you cancel, any
payments made by you under the sale will be returned within ten
business days following receipt by the seller of your written
notice of cancellation and any security interest arising out of
the transaction will be canceled.
If you cancel, you must make available to the seller at your
residence, in substantially as good condition as when received,
any goods delivered to you under this contract of sale; or you
may, if you wish, comply with the instruction of the seller
regarding the return shipment of the goods at the seller's
expense and risk.
If you do make the goods available to the seller and the
seller does not pick them up within twenty days of the date of your notice of cancellation, or agree to pay the expense for
their return, you may retain or dispose of the goods without any
further obligation. If you fail to make the goods available to
the seller, or if you agree to return the goods to the seller and
fail to do so, then you remain liable for performance of all
obligations under the contract.
To cancel this transaction, mail or deliver a written notice
of cancellation or send a telegram to (name of seller) at the
following address (address of seller)."
(3) Pursuant to subdivision (2), subsection (b) of this
section, the seller is required to furnish the purchaser with the
seller's name, and the name of the person to whom any notice of
cancellation is to be given if different from the seller's name,
the legal name of the company for whom the seller is soliciting,
the seller's street address and the seller's phone number. The
seller is additionally required to furnish the purchaser with the
date of the telephone solicitation and a description of the
telephone solicitation.
(4) It is an unfair and deceptive act or practice to fail to
or misrepresent the requirements of this section.
(5) It is a violation of this article for any seller or
telemarketer to engage in any other unfair or deceptive conduct
which will create a likelihood of confusion or misunderstanding to any reasonable consumer.
(6) Any person who fails to comply with the provisions of
this section is guilty of a misdemeanor and, upon conviction
thereof, shall be fined not less than one hundred dollars nor
more than five hundred dollars or confined in a county or
regional jail for a period not to exceed thirty days or both
fined and confined.
§46A-6E-108. Prohibited acts and practices.
(a) It is a prohibited telemarketing act or practice and a
violation of this article for any seller or telemarketer to
engage in the following conduct:
(1) Advertise or represent that registration as a
telemarketer equals an endorsement or approval by any government
or governmental agency of the state;
(2) Assist, support or provide substantial assistance to any
telemarketer when the seller knew or should have known that the
telemarketer was engaged in any act or practice under this
section or section one hundred seven of this article;
(3) Request a fee in advance to remove derogatory information
from or improve a person's credit history or credit record;
(4) Request or receive payment in advance from a person, to
recover or otherwise aid in the return of money or any other item
lost by the consumer in a prior telemarketing transaction;
(5) Obtain or submit for payment a check, draft or other form
of negotiable paper drawn on a person's checking, savings or
bankcard account without the consumer's express written
authorization; or
(6) Procure the services of any professional delivery,
courier or other pick-up service to obtain immediate receipt and
possession of a consumer's payment, unless the goods are
delivered with the opportunity to inspect before any payment is
collected.
(b) Any person who violates the provisions of this section is
guilty of a misdemeanor and, upon conviction thereof, shall be
fined not less than one hundred dollars nor more than five
hundred dollars or confined in a county or regional jail for not
more than thirty days or both fined and confined.
§46A-6E-109. Abusive acts or practices.
(a) It is an abusive telemarketing act or practice and a
violation of this article for any seller or telemarketer to
engage in the following conduct:
(1) Threaten, intimidate or use profane or obscene language;
(2) Cause the telephone to ring more than five times in an
intended telemarketing call;
(3) Engage any person repeatedly or continuously with
behavior a reasonable person would deem to be annoying, abusive or harassing;
(4) Initiate a telemarketing call to a person, when that
person has stated previously that he or she does not wish to
receive solicitation calls from that seller;
(5) Engage in telemarketing to a person's residence at any
time other than between eight a.m. and nine p.m. local time, at
the called person's location; or
(6) Engage in any other conduct which would be considered
abusive to any reasonable consumer.
(b) The state may seek injunctive or declaratory relief for
any violations of this section.
§46A-6E-110. Civil remedies.
(a) The sale of any goods or services by an unregistered
telemarketer or seller shall be void.
(b) Any consumer that suffers a loss or harm as a result of
an unfair and deceptive act or practice shall recover actual and
punitive damages, attorney's fees, court costs, and any other
remedies provided by law.
(c) Any consumer that suffers a loss or harm as a result of
a prohibited act or practice shall recover actual and punitive
damages, attorney's fees and court costs.
(d) Any consumer that suffers harm as a result of any abusive
act or practice shall receive injunctive or declaratory relief.
(e) The state, on behalf of its residents who have suffered
a loss or harm as a result of a violation of this article, may
seek actual and punitive damages.
NOTE: The purpose of this bill is to adopt the telemarketing
regulation and fraud prevention act.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that
would be added.
§46A-6E is new; therefore, strike-throughs and underscoring
have been omitted.
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