Legislature(2003 - 2004)
05/01/2004 05:12 PM Senate JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 15-SOLICITATIONS/CONSUMER PROTECTION
REPRESENTATIVE HUGH FATE, sponsor of HB 15, said the issue of
written agreements was raised at the last hearing and that Mr.
Pound would elaborate on that.
CHAIR SEEKINS asked if the committee is to look at a negotiated
agreement this afternoon.
REPRESENTATIVE FATE said that is correct and that he has
reviewed and supports it.
CHAIR SEEKINS indicated the committee has been working on
version W.
SENATOR OGAN moved to adopt Amendment 1a, which reads as
follows.
A M E N D M E N T 1a
1. Page 8, lines 13-19, delete all material and insert:
(10) by a person who is primarily soliciting the sale
of a [MAGAZINE, PERIODICAL,] sound recording or [,]
book
(A) if the person
(1) has no minimum purchase requirements,
(2) provides written notice of the buyer's right
to cancel at any time, and
(3) allows the buyer to return the sound
recording or book and obtain a full refund, or
(B) through a [,OR] membership in a book or record
club
(1) [(A)] where the club provides the buyer with
a form that the buyer may use to instruct the club not
to ship the offered merchandise; and
(2) [B] that is regulated by the Federal Trade
Commission as a negative option plan under 16 C.F.R.
[CFR] 425;
2. Page 8, following line 31, add the following:
(C) the provisions of subparagraph (11)(B) do not apply to
a sale of a magazine subscription
(i) where the telephone call is made to a customer to
solicit a subscription renewal; or
(ii) when the telephone call is initiated by the
buyer, payment is made by credit card, and a telephone
number to cancel the subscription is on the credit
card statement description line for that charge;
SENATOR FRENCH objected for the purpose of discussion.
CHAIR SEEKINS asked what Amendment 1a will do.
MS. SUSAN BURKE, representing the Direct Marketing Association
and the Magazine Publishers of America, explained that during a
previous discussion on HB 15 in committee, members talked about
book and record club memberships versus a solicitation received
in the mail for a single book or a single item. Amendment 1a
addresses that problem. The first section deals with a single
sale and says that a company retains its exemption if no minimum
purchase is required. It also requires a written notice of the
buyer's right to cancel at anytime and allows the buyer to
return the item for a full refund. She stated, "And the rest of
it is just the way it was in the original bill."
SENATOR FRENCH asked how the written notice of the right to
cancel on the sale of a single item would work.
MS. BURKE said the buyer would receive the notice in the mail
and could cancel the agreement by returning the item and getting
a refund.
SENATOR OGAN thought it offensive that such a law would even
have to be enacted to protect consumers from themselves.
SENATOR FRENCH asked for an explanation of how the second part
of the amendment would work.
MS. BURKE said a new section 11 was added on page 8 of version W
with introductory language and an A and B section; those would
not change. Amendment 1a adds a new subsection that says a
company does not have to provide written notice under two very
limited circumstances. The first instance is where the publisher
is contacting an existing customer and soliciting a magazine
renewal. The second instance would be when the seller sends a
postcard and the buyer initiates the contact and payment is made
by credit card.
TAPE 04-57, SIDE B
6:00 p.m.
MS. BURKE said the credit card statement will contain a
telephone number to call to cancel the subscription. All of
those things would have to apply to negate the written notice
requirement. She acknowledged that the amendment does not
address all of the Department of Law's concerns but through the
negotiating process both parties determined they can live with
these changes.
MR. DAVID MARCUS, legislative liaison and assistant attorney
general, DOL, affirmed that Amendment 1a is satisfactory.
REPRESENTATIVE FATE said he also finds the amendment to be
satisfactory.
SENATOR FRENCH withdrew his objection, therefore Amendment 1a
was adopted.
SENATOR OGAN moved SCS CSHB 15(JUD) from committee with
individual recommendations and its attached fiscal notes.
The motion carried with Senators Ogan, French, and Seekins in
favor.
CHAIR SEEKINS thanked participants and announced an at-ease.
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