H. B. 4267
(By Delegates Amores, Coleman, Pino, Kominar,
Staton, Smirl and L. White)
[Introduced February 5, 1998; referred to the
Committee on the Judiciary.]
A BILL to amend and reenact sections one hundred four, four hundred
sixteen and four hundred seventeen, article three, chapter
forty-six of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; to amend and reenact sections
two hundred seven, two hundred eight and four hundred one,
article four of said chapter; and to amend chapter forty-six-a
of said code by adding thereto a new article, designated
article six-e; relating to the regulation of telemarketing
activities generally; defining the term "demand draft"; making
transfer warranties applicable to demand drafts transferred by
a person for consideration; making presentment warranties
applicable to demand drafts; making transfer warranties
applicable to demand drafts transferred by a customer or
collecting bank; making presentment warranties applicable to
demand drafts presented to the drawee for payment; prescribing when a bank may charge a demand draft against the
account of a customer; defining certain terms related to the
regulation of telemarketing; exempting certain persons and
entities from telemarketing registration; requiring the
registration of telemarketers; requiring surety bond upon
application for registration; defining the offense of failing
to register or meet security requirement, and establishing the
penalty therefor; mandating disclosures which a telemarketer
must make when communicating with a consumer; requiring a
minimum policy on accepting returns or canceling services;
describing deceptive telemarketing acts or practices;
establishing penalties for deceptive telemarketing acts or
practices; describing abusive telemarketing acts or practices;
and providing for civil remedies.
Be it enacted by the Legislature of West Virginia:
That sections one hundred four, four hundred sixteen and four
hundred seventeen, article three, chapter forty-six of the code of
West Virginia, one thousand nine hundred thirty-one, as amended, be
amended and reenacted; that sections two hundred seven, two hundred
eight and four hundred one, article four of said chapter be amended
and reenacted; and that chapter forty-six-a of said code be amended
by adding thereto a new article, designated article six-e, all to
read as follows:
CHAPTER 46. UNIFORM COMMERCIAL CODE.
ARTICLE 3. NEGOTIABLE INSTRUMENTS.
§46-3-104. Negotiable instrument.
(a) Except as provided in subsections (c) and (d),
"negotiable instrument" means an unconditional promise or order to
pay a fixed amount of money, with or without interest or other
charges described in the promise or order, if it:
(1) Is payable to bearer or to order at the time it is issued
or first comes into possession of a holder;
(2) Is payable on demand or at a definite time; and
(3) Does not state any other undertaking or instruction by
the person promising or ordering payment to do any act in addition
to the payment of money, but the promise or order may contain (i)
an undertaking or power to give, maintain or protect collateral to
secure payment, (ii) an authorization or power to the holder to
confess judgment or realize on or dispose of collateral or (iii) a
waiver of the benefit of any law intended for the advantage or
protection of an obligor.
(b) "Instrument" means a negotiable instrument.
(c) An order that meets all of the requirements of subsection
(a), except paragraph (1), and otherwise falls within the
definition of "check" in subsection (f) is a negotiable instrument
and a check.
(d) A promise or order other than a check is not an
instrument if, at the time it is issued or first comes into possession of a holder, it contains a conspicuous statement,
however expressed, to the effect that the promise or order is not
negotiable or is not an instrument governed by this article.
(e) An instrument is a "note" if it is a promise and is a
"draft" if it is an order. If an instrument falls within the
definition of both "note" and "draft," a person entitled to enforce
the instrument may treat it as either.
(f) "Check" means (i) a draft, other than a documentary
draft, payable on demand and drawn on a bank or (ii) a cashier's
check or teller's check. An instrument may be a check even though
it is described on its face by another term, such as "money order."
(g) "Cashier's check" means a draft with respect to which the
drawer and drawee are the same bank or branches of the same bank.
(h) "Teller's check" means a draft drawn by a bank (i) on
another bank or (ii) payable at or through a bank.
(i) "Traveler's check" means an instrument that (i) is
payable on demand, (ii) is drawn on or payable at or through a
bank, (iii) is designated by the term "traveler's check" or by a
substantially similar term and (iv) requires, as a condition to
payment, a countersignature by a person whose specimen signature
appears on the instrument.
(j) "Certificate of deposit" means an instrument containing
an acknowledgment by a bank that a sum of money has been received
by the bank and a promise by the bank to repay the sum of money. A certificate of deposit is a note of the bank.
(k) "Demand draft" means a writing that is not signed by a
customer, as defined in subdivision five, subsection (a), section
one hundred four, article four of this chapter, and that is created
by a third party under the purported authority of the customer for
the purpose of charging the customer's account with a bank. A
demand draft does not include a check drawn by a fiduciary, as
defined in section three hundred seven of this article. A demand
draft may contain any or all of the following:
(1) The customer's printed or typewritten name or account
number;
(2) A notation that the customer authorized the draft; and
(3) The statement "No signature required," "Authorization on
file," "Signature on file," or words to that effect.
§46-3-416. Transfer warranties.
(a) A person who transfers an instrument for consideration
warrants to the transferee and, if the transfer is by indorsement,
to any subsequent transferee that:
(1) The warrantor is a person entitled to enforce the
instrument;
(2) All signatures on the instrument are authentic and
authorized;
(3) The instrument has not been altered;
(4) The instrument is not subject to a defense or claim in recoupment of any party which can be asserted against the
warrantor;
and
(5) The warrantor has no knowledge of any insolvency
proceeding commenced with respect to the maker or acceptor or, in
the case of an unaccepted draft, the drawer
.; and
(6) If the instrument is a demand draft, the creation of the
instrument according to the terms on its face was authorized by the
person identified as drawer.
(b) A person to whom the warranties under subsection (a) are
made and who took the instrument in good faith may recover from the
warrantor as damages for breach of warranty an amount equal to the
loss suffered as a result of the breach, but not more than the
amount of the instrument plus expenses and loss of interest
incurred as a result of the breach.
(c) The warranties stated in subsection (a) cannot be
disclaimed with respect to checks. Unless notice of a claim for
breach of warranty is given to the warrantor within thirty days
after the claimant has reason to know of the breach and the
identity of the warrantor, the liability of the warrantor under
subsection (b) is discharged to the extent of any loss caused by
the delay in giving notice of the claim.
(d) A
(cause of action) cause of action for breach of
warranty under this section accrues when the claimant has reason to
know of the breach.
(e) If the warranty under subdivision six, subsection (a) is
not given by a transferor under applicable conflict of law rules,
the warranty is not given to that transferor when that transferor
is a transferee.
§46-3-417. Presentment warranties.
(a) If an unaccepted draft is presented to the drawee for
payment of acceptance and the drawee pays or accepts the draft, (i)
the person obtaining payment or acceptance, at the time of
presentment and (ii) a previous transferor of the draft, at the
time of transfer, warrant to the drawee making payment or accepting
the draft in good faith that:
(1) The warrantor is, or was, at the time the warrantor
transferred the draft, a person entitled to enforce the draft or
authorized to obtain payment or acceptance of the draft on behalf
of a person entitled to enforce the draft;
(2) The draft has not been altered;
and
(3) The warrantor has no knowledge that the signature of the
drawer of the draft is unauthorized
.; and
(4) If the instrument is a demand draft, the creation of the
draft according to the terms on its face was authorized by the
person identified as drawer.
(b) A drawee making payment may recover from any warrantor
damages for breach of warranty equal to the amount paid by the
drawee less the amount the drawee received or is entitled to receive from the drawer because of the payment. In addition, the
drawee is entitled to compensation for expenses and loss of
interest resulting from the breach. The right of the drawee to
recover damages under this subsection is not affected by any
failure of the drawee to exercise ordinary care in making payment.
If the drawee accepts the draft, breach of warranty is a defense to
the obligation of the acceptor. If the acceptor makes payment with
respect to the draft, the acceptor is entitled to recover from any
warrantor for breach of warranty the amounts stated in this
subsection.
(c) If a drawee asserts a claim for breach of warranty under
subsection (a) based on an unauthorized indorsement of the draft or
an alteration of the draft, the warrantor may defend by proving
that the indorsement is effective under section 3-404 or 3-405 or
the drawer is precluded under section 3-406 or 4-406 from asserting
against the drawee the unauthorized indorsement or alteration.
(d) If (i) a dishonored draft is presented for payment to the
drawer or an indorser or (ii) any other instrument is presented for
payment to a party obliged to pay the instrument and (iii) payment
is received, the following rules apply:
(1) The person obtaining payment and prior transferor of the
instrument warrant to the person making payment in good faith that
the warrantor is, or was, at the time the warrantor transferred the
instrument, a person entitled to enforce the instrument or authorized to obtain payment on behalf of a person entitled to
enforce the instrument.
(2) The person making payment may recover from any warrantor
for breach of warranty an amount equal to the amount paid plus
expenses and loss of interest resulting from the breach.
(3) The warranties stated in subsections (a) and (d) cannot
be disclaimed with respect to checks. Unless notice of a claim for
breach of warranty is given to the warrantor within thirty days
after the claimant has reason to know of the breach and the
identity of the warrantor, the liability of the warrantor under
subsection (b) or (d) is discharged to the extent of any loss
caused by the delay in giving notice of the claim.
(e) A
(cause of action) cause of action for breach of
warranty under this section accrues when the claimant has reason to
know of the breach.
(f) If the warranty under subdivision four, subsection (a) is
not given by a transferor under applicable conflict of law rules,
the warranty is not given to that transferor when that transferor
is a transferee.
ARTICLE 4. BANK DEPOSITS AND COLLECTIONS.
§46-4-207. Transfer warranties.
(a) A customer or collecting bank that transfers an item and
receives a settlement or other consideration warrants to the
transferee and to any subsequent collecting bank that:
(1) The warrantor is a person entitled to enforce the item;
(2) All signatures on the item are authentic and authorized;
(3) The item has not been altered;
(4) The item is not subject to a defense or claim in
recoupment (section 3-305(a)) of any party that can be asserted
against the warrantor;
and
(5) The warrantor has no knowledge of any insolvency
proceeding commenced with respect to the maker or acceptor or, in
the case of an unaccepted draft, the drawer
.; and
(6) If the item is a demand draft, the creation of the item
according to the terms on its face was authorized by the person
identified as drawer.
(b) If an item is dishonored, a customer or collecting bank
transferring the item and receiving settlement or other
consideration is obliged to pay the amount due on the item (i)
according to the terms of the item at the time it was transferred
or (ii) if the transfer was of an incomplete item, according to its
terms when completed as stated in sections 3-115 and 3-407. The
obligation of a transferor is owed to the transferee and to any
subsequent collecting bank that takes the item in good faith. A
transferor cannot disclaim its obligation under this subsection by
an indorsement stating that it is made "without recourse" or
otherwise disclaiming liability.
(c) A person to whom the warranties under subsection (a) are made and who took the item in good faith may recover from the
warrantor as damages for breach of warranty an amount equal to the
loss suffered as a result of the breach, but not more than the
amount of the item plus expenses and loss of interest incurred as
a result of the breach.
(d) The warranties stated in subsection (a) cannot be
disclaimed with respect to checks. Unless notice of a claim for
breach of warranty is given to the warrantor within thirty days
after the claimant has reason to know of the breach and the
identity of the warrantor, the warrantor is discharged to the
extent of any loss caused by the delay in giving notice of the
claim.
(e ) A cause of action for breach of warranty under this
section accrues when the claimant has reason to know of the breach.
(f) If the warranty under subdivision six, subsection (a) is
not given by a transferor or collecting bank under applicable
conflict of law rules, the warranty is not given to that
transferor when that transferor is a transferee or to any prior
collecting bank of that transferee.
§46-4-208. Presentment warranties.
(a) If an unaccepted draft is presented to the drawee for
payment or acceptance and the drawee pays or accepts the draft, (i)
the person obtaining payment or acceptance, at the time of
presentment and (ii) a previous transferor of the draft, at the time of transfer, warrant to the drawee that pays or accepts the
draft in good faith that:
(1) The warrantor is, or was, at the time the warrantor
transferred the draft, a person entitled to enforce the draft or
authorized to obtain payment or acceptance of the draft on behalf
of a person entitled to endorse the draft;
(2) The draft has not been altered;
and
(3) The warrantor has no knowledge that the signature of the
purported drawer of the draft is unauthorized
.; and
(4) If the instrument is a demand draft, the creation of the
draft according to the terms on its face was authorized by the
person identified as drawer.
(b) A drawee making payment may recover from a warrantor
damages for breach of warranty equal to the amount paid by the
drawee less the amount the drawee received or is entitled to
receive from the drawer because of the payment. In addition, the
drawee is entitled to compensation for expenses and loss of
interest resulting from the breach. The right of the drawee to
recover damages under this subsection is not affected by any
failure of the drawee to exercise ordinary care in making payment.
If the drawee accepts the draft, (i) breach of warranty is a
defense to the obligation of the acceptor and (ii) if the acceptor
makes payment with respect to the draft, the acceptor is entitled
to recover from a warrantor for breach of warranty the amounts stated in this subsection.
(c) If a drawee asserts a claim for breach of warranty under
subsection (a) based on an unauthorized indorsement of the draft or
an alteration of the draft, the warrantor may defend by proving
that the indorsement is effective under section 3-404 or 3-405 or
the drawer is precluded under section 3-406 or 4-406 from asserting
against the drawee the unauthorized indorsement or alteration.
(d) If, (i) a dishonored draft is presented for payment to
the drawer or an indorser or (ii) any other item is presented for
payment to a party obliged to pay the item, and the item is paid,
the person obtaining payment and a prior transferor of the item
warrant to the person making payment in good faith that the
warrantor is, or was, at the time the warrantor transferred the
item, a person entitled to enforce the item or authorized to obtain
payment on behalf of a person entitled to enforce the item. The
person making payment may recover from any warrantor for breach of
warranty an amount equal to the amount paid plus expenses and loss
of interest resulting from the breach.
(e) The warranties stated in subsections (a) and (d) cannot
be disclaimed with respect to checks. Unless notice of a claim for
breach of warranty is given to the warrantor within thirty days
after the claimant has reason to know of the breach and the
identity of the warrantor, the warrantor is discharged to the
extent of any loss caused by the delay in giving notice of the claim.
(f) A cause of action for breach of warranty under this
section accrues when the claimant has reason to know of the breach.
(g) If the warranty under subdivision four, subsection (a) is
not given by a transferor under applicable conflict of law rules,
the warranty is not given to that transferor when that transferor
is a transferee.
Part 4. Relationship Between Payor Bank and its Customer.
§46-4-401. When bank may charge customer's account.
(a) A bank may charge against the account of a customer an
item that is properly payable from that account even though the
charge creates an overdraft. An item is properly payable if it is
authorized by the customer and is in accordance with any agreement
between the customer and bank.
(b) A customer is not liable for the amount of an overdraft
if the customer neither signed the item nor benefited from the
proceeds of the item.
(c) A bank may charge against the account of a customer a
check that is otherwise properly payable from the account, even
though payment was made before the date of the check, unless the
customer has given notice to the bank of the postdating describing
the check with reasonable certainty. The notice is effective for
the period stated in section 4-403(b) for stop-payment orders, and
must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes
any action with respect to the check described in section 4-303.
A bank shall accept nine such notices each year for each account
without charge for acceptance of the notice or monitoring for the
postdated check. If a bank charges against the account of a
customer a check before the date stated in the notice of
postdating, the bank is liable for damages for the loss resulting
from its act. The loss may include damages for dishonor of
subsequent items under section 4-402.
(d) A bank that in good faith makes payment to a holder may
charge the indicated account of its customer according to:
(1) The original terms of the altered item; or
(2) The terms of the completed item, even though the bank
knows the item has been completed unless the bank has notice that
the completion was improper.
(e) A bank may charge against the account of a customer a
demand draft, as defined in subsection (k), section one hundred
four, article three of this chapter, if:
(1) The amount to be charged against the customer's account
is less than five hundred dollars; or
(2) The amount to be charged against the customer's account
is five hundred dollars or more and the bank has communicated with
its customer and confirmed that the demand draft was properly
authorized by the customer and that the demand draft conforms to the customer's authorization.
(f) A bank that is attempting to confirm the authorization of
a demand draft in accordance with the provisions of subdivision
two, subsection (e) of this section is not required to comply with
the time limits set forth in sections three hundred one, three
hundred two, or three hundred three of this article, but is
permitted to hold the demand draft for a reasonable period of time
to allow the bank to establish communications with its customer
prior to charging the indicated account.
CHAPTER 46A. WEST VIRGINIA CONSUMER CREDIT AND PROTECTION ACT.
ARTICLE 6E. TELEMARKETING.
Part I. Definitions.
§46A-6E-101.
Applicability of definitions.
For the purposes of this article, the words or terms defined
in this part have the meanings ascribed to them. These definitions
are applicable unless a different meaning clearly appears from the
context.
§46A-6E-102. Chance promotion.
"Chance promotion" means any plan in which premiums are
distributed by random or chance selection.
§46A-6E-103. Consumer; purchaser.
"Consumer" or "purchaser" means a person who is solicited to
become or does become obligated to pay for consumer goods or
services offered by a telemarketer through telemarketing.
§46A-6E-104. Consumer goods or services.
"Consumer goods or services" means:
(1) Any property or services offered or sold to a natural
person primarily for personal, family, or household purposes;
(2) Any property or service offered or sold for the purpose
of providing a profit or investment opportunity; or
(3) Any property intended to be attached to or installed in
any real property, without regard to whether it is so attached or
installed, as well as timeshare estates and licenses, and any
services related to such property.
§46A-6E-105. Division.
"Division" means the consumer protection division of the
office of the attorney general.
§46A-6E-106. Individual.
"Individual" means a single human being and does not mean a
firm, association of individuals, corporation, partnership, joint
venture, sole proprietorship, or any other entity.
§46A-6E-107. Investment opportunity.
"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.
§46A-6E-108. Material aspect or element.
"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.
§46A-6E-109. Person.
"Person" includes any individual, group of individuals, firm,
association, corporation, partnership, joint venture, sole
proprietorship, or any other business entity.
§46A-6E-110. Prize, gift or award.
"Prize, gift or award" means anything offered or given, or
purportedly offered or given, to a consumer as part of a prize
promotion.
§46A-6E-111. Prize promotion.
"Prize promotion" means:
(1) A sweepstakes or other game of chance; or
(2) An oral or written express or implied representation that
a person has won, has been selected to receive, or may be eligible
to receive a prize, gift or award.
§46A-6E-112. Recovery service.
"Recovery service" means a business or other practice whereby
a person represents or implies that he will, for a fee, recover any
amount of money that a consumer has provided to a telemarketer or
salesperson pursuant to a solicitation governed y the provisions of
this article.
§46A-6E-113. Salesperson.
(a) "Salesperson" means any person employed, appointed, or
authorized by a telemarketer to solicit the sale of consumer goods
or services to a consumer on behalf of the telemarketer.
(b) A person is a salesperson within the meaning of this
section regardless of whether the telemarketer refers to the person
as a seller, agent, representative, or independent contractor if,
in exchange for consideration, the person:
(1) Provides consumer goods or services to a consumer;
(2) Offers to provide consumer goods or services to a
consumer; or
(3) Arranges for others to provide consumer goods or services
to a consumer.
(c) A salesperson does not include individuals exempted from
this part by section two hundred one of this article or employees
or agents of persons exempted from this part by section two hundred
one of this article, or companies and individuals under contract
with persons exempted from this part by section two hundred one of
this article when liability is assumed by the exempt entity.
§46A-6E-114. Telemarketing solicitation.
(a) "Telemarketing solicitation" means and includes any
communication between a telemarketer and a prospective purchaser
for the purpose of selling or attempting to sell the purchaser any
consumer goods or services, if it is intended by the telemarketer
that an agreement to purchase the consumer goods or services will be made after any of the following events occur:
(1) The telemarketer makes an unsolicited telephone call to
a consumer, attempting to sell consumer goods or services to the
consumer, when the consumer has not previously expressed an
interest to the telemarketer in purchasing, investing in, or
obtaining information regarding, the consumer goods or services
offered by the telemarketer; or
(2) The telemarketer communicates with a consumer by any
means and invites or directs the consumer to respond by any means
to the telemarketer's communications, and the telemarketer intends
to enter into an agreement with the consumer for the purchase of
consumer goods or services at some time during the course of one or
more subsequent telephone communications with the consumer.
(b) For purposes of this article, "communication" means a
written or oral notification or advertisement transmitted from a
telemarketer to a consumer by any means.
§46A-6E-115. Telemarketer.
(a) "Telemarketer" means any person who initiates or receives
telephone calls to or from a consumer in this state for the purpose
of making a telemarketing solicitation as defined in section one
hundred fifteen of this article.
(b) A telemarketer may initiate or receive a communication
that constitutes a telemarketing solicitation on his own behalf,
through a salesperson, or through an automated dialing machine.
(c) A telemarketer does not include any of the persons or
entities exempted pursuant to Part II of this article.
(d) A telemarketer does not include a salesperson as defined
in section one hundred fourteen of this article.
(e) A telemarketer includes, but is not limited to, owners,
operators, officers, directors, partners, or other individuals
engaged in the management activities of a business entity that is
subject to licensing and registration pursuant to this article.
Part II. Exempt persons or entities.
§46A-6E-201. Inapplicability of article.
The provisions of this article do not apply to the persons or
entities identified in this part.
§46A-6E-202. Inapplicability of article to licensed securities,
commodities, or investment broker, dealer, or investment
adviser.
The provisions of this article do not apply to any licensed
securities, commodities, or investment broker, dealer, or
investment adviser, when soliciting within the scope of his
license. As used in this section, "licensed securities,
commodities, or investment broker, dealer, or investment adviser"
means a person subject to license or registration as such by the
Securities and Exchange Commission, by the National Association of
Securities Dealers or other self-regulatory organization as defined
by the Securities Exchange Act of 1934 (15 U.S.C. § 781), or by an official or agency of this state or of any state of the United
States.
§46A-6E-203. Inapplicability of article to
licensed associated person of a
securities, commodities, or investment broker, dealer, or
investment adviser
.
The provisions of this article do not apply to any licensed
associated person of a securities, commodities, or investment
broker, dealer, or investment adviser, when soliciting within the
scope of his license. As used in this section, "licensed
associated person of a securities, commodities, or investment
broker, dealer, or investment adviser" means any associated person
registered or licensed by the National Association of Securities
Dealers or other self-regulatory organization as defined by the
Securities Exchange Act of 1934 (15 U.S.C. §781) or by an official
or agency of this state or of any state of the United States.
§46A-6E-204. Inapplicability of article to person making calls for
religious, charitable, political, educational, or other
noncommercial purposes or soliciting for a nonprofit
corporation.
The provisions of this article do not apply to a person making
calls for religious, charitable, political, educational, or other
noncommercial purposes or a person soliciting for a nonprofit
corporation if that corporation is properly registered as such with
the West Virginia secretary of state and is included within the exceptions of §501(c)(3) or §501(c)(6) of the federal Internal
Revenue Code.
§46A-6E-205. Inapplicability of article to person who does not
make the major sales presentation.
The provisions of this article do not apply to a person who
does not make the major sales presentation during the telephone
solicitation and who does not intend to, and does not actually,
complete or obtain provisional acceptance of a sale during the
telephone solicitation, but who makes the major sales presentation
and completes the sale at a later face-to-face meeting between the
seller and the prospective consumer in accordance with the home
solicitation provisions in this chapter and as a home solicitation
sale as defined by section one hundred two, article one of this
chapter. However, if a seller, in violation of subdivision (4)
subsection (a) section five hundred one of this article, causes an
individual to go to the prospective consumer for the primary
purpose of collecting payment or delivering any item purchased,
this exemption does not apply.
§46A-6E-206. Inapplicability of article to business-to-business
sale.
The provisions of this article do not apply to a business-to- business sale.
§46A-6E-207. Inapplicability of article to person who solicits
sales by catalog.
The provisions of this article do not apply to a person who
solicits sales by periodically publishing and delivering a catalog
of a seller's merchandise to prospective purchasers, if the
catalog:
(1) Contains a written description or illustration of each
item offered for sale;
(2) Includes the business address or home address of the
seller;
(3) Includes at least twenty pages of written material and
illustrations and is
distributed in more than one state; and
(4) Has an annual circulation, by mailing, of not less than
one hundred fifty thousand catalogs.
§46A-6E-208. Inapplicability of article to person who solicits
contracts for the maintenance or repair of goods.
The provisions of this article do not apply to a person who
solicits contracts for the maintenance or repair of goods
previously purchased from the person making the solicitation or on
whose behalf the solicitation is made.
§46A-6E-209. Inapplicability of article to person soliciting a
transaction regulated by the Commodity Futures Trading
Commission.
The provisions of this article do not apply to a person
soliciting a transaction regulated by the federal commodity futures trading commission if the person is registered or temporarily
licensed for this activity with the commodity futures trading
commission under the Commodity Exchange Act (7 U.S.C. §1 et seq.)
and the registration or license has not expired or been suspended
or revoked.
§46A-6E-210. Inapplicability of article to supervised financial
organization.
The provisions of this article do not apply to any supervised
financial organization or regulated consumer lender. As used in
this section, the terms "supervised financial organization" and
"regulated consumer lender" shall have the same meanings as
ascribed to them in section one hundred two, article one of this
chapter.
§46A-6E-211. Inapplicability of article to licensed insurance
broker, agent, customer representative, or solicitor.
The provisions of this article do not apply to any licensed
insurance broker, agent, customer representative, or solicitor when
soliciting within the scope of his or her license. As used in this
section, "licensed insurance broker, agent, customer
representative, or solicitor" means any insurance broker, agent,
customer representative, or solicitor licensed by an official or
agency of this state pursuant to subsection (a), section one,
article twelve, chapter thirty-three of this code, or of any state
of the United States.
§46A-6E-212. Inapplicability of article to person soliciting the
sale of services provided by a cable television system.
The provisions of this article do not apply to a person
soliciting the sale of services provided by a cable television
system operating under authority of a franchise or permit.
§46A-6E-213. Inapplicability of article to certain telephone and
communications companies.
The provisions of this article do not apply to any of the
following persons or entities regulated by the West Virginia public
service commission or the federal communications commission:
(1) A telephone company, or a subsidiary or agent of a
telephone company; or
(2) Any cellular telephone company or other bona fide radio
telecommunication service provider.
§46A-6E-215. Inapplicability of article to persons maintaining
continuing business locations for sales of consumer goods or
services.
The provisions of this article do not apply to a person who
offers to sell consumer goods or services through telemarketing
activities if the person maintains a permanent business location
under the same exact name as that used in connection with the
telemarketing sales, and both of the following activities occur on
a continuing basis:
(1) The identical consumer goods or services offered for sale by the person through telemarketing activities are also advertised
and offered for sale at the person's business location; and
(2) More than fifty percent of all the of the consumer goods
or services offered for sale by the person are provided to
consumers at the person's business location rather than through
telemarketing sales.
§46A-6E-216. Inapplicability of article to person soliciting the
sale of a magazine or newspaper.
The provisions of this article do not apply to a person
primarily soliciting the sale of a magazine or newspaper of general
circulation.
§46A-6E-217. Inapplicability of article to issuer of certain
securities.
The provisions of this article do not apply to an issuer or a
subsidiary of an issuer that has a class of securities which is
subject to §12 of the Securities Exchange Act of 1934 (15 U.S.C.§
781) and which is either registered or exempt from registration
under paragraphs (A), (B), (C), (E), (F), (G), or (H) of subsection
(g)(2) of that section.
§46A-6E-218. Inapplicability of article to book, video, record, or
multimedia club.
The provisions of this article do not apply to a book, video,
record, or multimedia club or contractual plan or arrangement:
(1) Under which the seller provides the consumer with a form which the consumer may use to instruct the seller not to ship the
offered merchandise;
(2) That is regulated by the Federal trade commission trade
regulation concerning "use of negative option plans by sellers in
commerce"; or
(3) That provides for the sale of books, records, videos,
multimedia products or other goods that are not covered under
subdivisions (1) or (2) of this section, including continuity
plans, subscription arrangements, standing order arrangements,
single sales, supplements, and series arrangements under which the
seller periodically ships merchandise to a consumer who has
consented in advance to receive such merchandise on a periodic
basis.
§46A-6E-219. Inapplicability of article to registered developer or
a real estate salesperson or broker.
The provisions of this article do not apply to a person who is
a registered developer or a real estate salesperson or broker
licensed with the state pursuant to section one, article twelve,
chapter forty-six of this code.
§46A-6E-220. Inapplicability of article to certain telemarketers
based on continuous sales and gross sales for exempt persons.
The provisions of this article do not apply to any
telemarketer who has been providing telemarketing sales services
continuously for at least two years under the same name and which derives fifty percent of its gross telemarketing sales revenues
from contracts with persons exempted in this part.
§46A-6E-221. Inapplicability of article to sale of less than one
hundred dollars.
The provisions of this article do not apply to a person
soliciting the sale of consumer goods or services if the
solicitation neither intends to result in, or actually results in,
a sale which costs the consumer in excess of one hundred dollars to
a single address.
§46A-6E-222. Inapplicability of article to person soliciting the
sale of electric or gas energy.
The provisions of this article do not apply to a person
soliciting the sale of electric or natural gas energy or related
goods and services, if such sale is under the jurisdiction of the
public service commission or the federal energy regulatory
commission.
Part III. Registration, security and record keeping.
§46A-6E-301. Registration of telemarketers.
(a) No person shall act as a telemarketer without first
having registered with the state's department of tax and revenue.
(b) 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.
(c) The application for a certificate of registration or
renewal shall include, but not be limited to, the following
information:
(1) The true name, current address, telephone number and
location of the telemarketer, including each name under which the
telemarketer intends to engage in telemarketing;
(2) Each occupation or business that the telemarketer's
principal owner has engaged in for two years immediately preceding
the date of the application,
(3) Whether any principal or manager has been convicted, or
pled guilty to, or is being prosecuted by indictment for,
racketeering, violations of state or federal securities laws or a
theft offense;
(4) 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;
(5) Whether the telemarketer, at any time during the previous
seven years, has filed for bankruptcy, been adjudged bankrupt or
been reorganized because of insolvency;
(6) The true name, current home address, date of birth, social security number and all other names of the following:
(A) Each person participating in or responsible for the
management of the seller's business;
(B) Each person, office manager, or supervisor principally
responsible for the management of the seller's business.
(7) The name, address and account number of every institution
where banking or any other monetary transactions are done by the
seller.
§46A-6E-302. 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 days 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.
§46A-6E-303. Failure to register or meet security requirement;
penalty.
(c) The following shall constitute a violation of this
article and shall be a felony:
(1) Failure to register pursuant to subsection (a), section
one hundred four of this article;
(2) Failure to meet the security requirement set forth in
subsection (b), section one hundred four of this article;
(3) Failure to maintain a certificate of registration secured
pursuant to subdivision (2), subsection (a), section one hundred four of this article;
(4) Including any false or misleading information on a
registration application secured pursuant to subdivision (2),
subsection (a), section one hundred four of this article;
(5) Misrepresenting that a seller is registered pursuant to
subsection (a), section one hundred four of this article.
§46A-6E-304. Record keeping requirements.
(a) A telemarketer shall keep for a period of twenty-four
months from the date the record is produced the following records
related to its telemarketing activities:
(1) All substantially different advertisements, brochures and
promotional materials;
(2) The name and last known address of each prize recipient
and the prize awarded for prizes that are represented, directly or
by implication, to have a value of twenty-five dollars or more;
(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 paid by the customer for the
goods or services;
(4) The name, last known home address and telephone number,
and the job title for all current and former employees directly
involved in telephone sales;
(5) All verifiable authorizations required to be provided or
received under
this article; and
(6) 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) A seller or telemarketer may keep the records required by
subsection (a) of this section in any form, and in any manner,
format, or place as they keep such records in the ordinary course
of business. Failure to keep all records required by subsection
(a) of this section shall be a violation of this article.
(c) The telemarketer is responsible for complying with the
above provisions.
(d) In the event of any dissolution or termination of the
seller's or 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.
(e) (1) The attorney general may require a telemarketer to
file true copies of all scripts, outlines and promotional material
and any modifications thereto with the division of consumer
protection for a time period to be determined by the attorney
general. Such filing may be required upon a finding by the
attorney general that:
(A) A telemarketer or salesperson is using scripts, outlines
or presentation material that contain material misrepresentations
or that fail to state material facts; or
(B) A telemarketer or salesperson is deviating from scripts,
outlines or presentation material so as to make material
misrepresentations or to fail to state material facts.
(2) The attorney general shall promulgate a procedural rule
in accordance with the provisions of chapter twenty-nine-a of this
code, to provide for notice and hearing prior to requiring filing
pursuant to this subsection.
Part IV. Disclosures and contract requirements.
§46A-6E-401. Mandatory disclosures.
(a) A telemarketer or salesperson shall promptly disclose, in
a clear and conspicuous manner, the following material information
when making a telemarketing communication with a consumer:
(1) The true identity of the telemarketer and the
salesperson;
(2) That the purpose of the call is to sell consumer goods or
services; and
(3) The nature of the goods or services offered for sale.
(b) Before a consumer pays for the goods or services offered
for sale, the telemarketer or salesperson shall disclose, in a
clear and conspicuous manner, the following material information:
(1) The total costs to purchase, receive or use the consumer goods or services that are the subject of the telemarketing
communication;
(2) The quantity of the consumer goods or services that are
the subject of the telemarketing solicitation;
(3) All material restrictions, limitations or conditions to
purchase, receive, or use the consumer goods or services that are
the subject of the telemarketing solicitation;
(4) Any material aspect of the performance, quality,
efficacy, nature or basic characteristics of the consumer goods or
services that are the subject of the telemarketing solicitation;
(5) Any material aspect of the nature or terms of the
telemarketer's refund, cancellation, exchange or repurchase
policies;
(6) Any material aspect of a prize promotion, including,
but not limited to, the following:
(A) A description of the prizes, gifts or awards offered or
to be given to consumers participating in the prize promotion;
(B) A statement of the value of any prizes, gifts or awards
offered or to be given to participating consumers;
(C) A clear and unequivocal statement that the consumer is
not required to make any purchase of consumer goods or services
in order to qualify for any prize, gift or award or to otherwise
participate in the prize promotion;
(D) A clear and unequivocal statement that the consumer is not required to pay any handling or shipping costs or to make any
other payment of any kind in order to win or receive a prize,
gift or award or to otherwise participate in the prize promotion;
(E) A description of the actual numbers of the prizes,
gifts or awards to be awarded;
(F) A description of the odds of being able to receive a
prize, gift or award and, if the odds are not calculable in
advance, a clear explanation of the factors to be used in
calculating the odds of being able to receive a prize, gift or
award; and
(G) A clear explanation of the no-purchase/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 consumers may write or call
for information on how to participate.
(7) Any material aspect of an investment opportunity being
offered, including but not limited to a description of the
following factors:
(A) Risk;
(B) Liquidity;
(C) Earnings potential;
(D) Profitability;
(E) Benefits; and
(F) If applicable, the value, price and location of any real or personal property that the consumer will acquire by investing.
§46A-6E-403. Accepting returns or canceling services.
(a) Every telemarketer shall, at a minimum, have the
following policy:
(1) Accepting returns or canceling services for a period of
not less than seven days after the date of delivery to the customer
and providing a cash refund for a cash purchase or issuing a credit
for a credit purchase, which credit is applied to the account to
which the purchase was debited in connection with the return of its
unused and undamaged merchandise or canceled services;
(2) Disclosing the telemarketer's return and refund policy to
the buyer, orally by telephone or in writing with advertising,
promotional material, or with delivery of the products or service;
and
(3) Restoring such payment or issuing such credit, as
required under subdivision (1) of this section, within thirty days
after the date on which the telemarketing receives returned
merchandise or notice of cancellation of services. A seller who
discloses, in writing, that a sale is made or provided
"satisfaction guaranteed," with "free inspection," "no risk
guarantee, " or similar words or phrases, shall be deemed to meet
the requirements of the review and return for refund policy set
forth in this subparagraph.
(b) Failure to comply with the provisions of this section is a misdemeanor and shall be fined not less than one hundred dollars
nor more than five hundred dollars or confined in jail for a period
not to exceed thirty days or both fined and jailed in the
discretion of the court.
Part V. Deceptive acts and practices; Penalties.
§46A-6E-501. Deceptive acts and practices.
(a) It is a deceptive telemarketing act or practice and a
violation of this article for any seller or telemarketer to engage
in the following conduct:
(1) To advertise or represent that registration as a
telemarketer equals an endorsement or approval by any government or
Governmental agency of the state;
(2) To request or receive payment of any fee or consideration
for goods or services represented to remove derogatory information
from, or improve, a person's credit history, credit record, or
credit rating until:
(A) The time frame in which the seller has represented all of
the goods or services will be provided to that person has expired;
and
(B) The seller has provided the person with documentation in
the form of a consumer report from a consumer reporting agency
demonstrating) that the promised results have been achieved, such
report having been issued more than six months after the results
were achieved;
(3) To obtain or submit for payment a check, draft, or other
form of negotiable paper drawn on a person's checking, savings,
share, or similar account, without that person's express verifiable
authorization. Such authorization shall be deemed verifiable if
any of the following means are employed:
(A) Express written authorization by the customer. which may
include the customer's signature on the negotiable instrument; or
(B) Express oral authorization which is tape recorded and
made available upon request to the customer's bank and which
evidences clearly both the customer's authorization of payment for
the goods and services that are the subject of the sales offer and
the customer's receipt of all of the following information:
(i) The date of the draft(s);
(ii) The amount of the draft(s);
(iii) The payor's name;
(iv) The number of draft payments (if more than one);
(v) A telephone number for customer inquiry that is answered
during normal business hours; and
(vi) The date of the customer's oral authorization.
(C) Written confirmation of the transaction, sent to the
customer prior to submission for payment of the customer's check,
draft, or other form of negotiable paper, that includes:
(i) All of the information contained in section
108(a)(4)(B)(i)-(vi) of this article; and
(ii) The procedures by which the customer can obtain a refund
from the seller or telemarketer in the event the confirmation is
inaccurate.
(4) To 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 requested by the consumer
and the consumer can inspect the goods or services prior to
payment.
(5) To engage in any other unfair or deceptive conduct which
will create a likelihood of confusion or misunderstanding to any
reasonable consumer.
(7) To misrepresent the requirements of this section.
(8) To provide substantial assistance or support to any
seller or telemarketer when that person knows or consciously avoids
knowing that the seller or telemarketer is engaged in any act or
practice that violates this section.
(9) To engage in a recovery service and charge or receive any
money or other valuable consideration from a consumer before full
and complete performance of the service which the telemarketer or
salesperson has agreed to perform for or on behalf of the consumer.
(10) To engage in any other "unfair method of competition and
deceptive acts or practices" as specified in section one hundred
two, article six of this chapter.
§46A-6E-502. Penalties.
(a) A person who violates the provisions of section five
hundred one of this article is guilty of a misdemeanor and, upon
conviction, shall be fined not less than one hundred dollars nor
more than five hundred dollars or confined in jail for a period not
to exceed thirty days or both fined and jailed in the discretion of
the court.
(b) A person who violates the provisions of section five
hundred one of this article for a second offense is guilty of a
misdemeanor and, upon conviction, shall be fined not less than one
thousand dollars nor more than five thousand dollars or confined in
jail for a period not to exceed sixty days or both fined and jailed
in the discretion of the court.
(c) A person who violates the provisions of section five
hundred one of this article for a third or subsequent offense is
guilty of a misdemeanor and, upon conviction, shall be fined not
less than twenty-five thousand dollars nor more than fifty thousand
dollars and confined in jail for a period not to exceed ninety
days.
Part VI. Abusive Acts or practices; Penalties.
§46A-6E-601. Abusive acts or practices.
(a) It is an abusive telemarketing act or practice and a
violation of this act for any seller or telemarketer to engage in
the following conduct:
(1) Threaten, intimidate or use profane or obscene language;
(2) Engage any person repeatedly or continuously with
behavior a reasonable person would deem to be annoying, abusive or
harassing;
(3) Initiate an outbound telephone call to a person when that
person previously has stated that he or she does not wish to
receive an outbound telephone call made by or on behalf of the
seller whose goods or services are being offered.
(4) 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
(5) Engage in any other conduct which would be considered
abusive to any reasonable consumer.
(b) A telemarketer will not be liable for violating
subdivision three, subsection (a), of this section if:
(1) It has established and implemented written procedures to
avoid outbound telephone calls to persons who have previously
stated that they do not wish to receive such calls;
(2) It has trained its personnel in the procedures
established pursuant to subdivision one of this subsection;
(3) The telemarketer has maintained and recorded lists of
persons who have previously stated that they do not wish to receive
such calls; and
(4) Any subsequent call is the result of error.
(c) The state may seek injunctive or declaratory relief for any violations of this section.
Part VII. Remedies.
§46A-6E-701. Civil remedies.
(a) Any consumer that suffers a loss or harm as a result of
an unfair and deceptive act or practice may recover actual damages,
court costs, and any other remedies provided by law.
(b) Any consumer that suffers harm as a result of any abusive
act or practice shall receive injunctive or declaratory relief.
(c) The state, on behalf of its residents who have suffered
a loss or harm as a result of a violation of this act, may seek
injunctive or declaratory relief, actual damages and any other
remedies provided by law.
§46A-6E-702. Remedies not exclusive.
Nothing contained in this article shall be construed to
adversely alter or affect a right or benefit accruing to a consumer
in accordance with other provisions of this chapter, or to limit
any civil or criminal remedy otherwise provided for by law. In the
case of provisions contained in this article that exempt a person
from the requirements of this article or that otherwise limit the
applicability of this article to a person, those provisions are
exclusive to this article and shall not be construed to otherwise
exempt a person or to limit the applicability of any other
provisions of this code.
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