Legislature(2007 - 2008)BELTZ 211
05/01/2007 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB121 | |
| SB118 | |
| HB182 | |
| HB136 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 136 | TELECONFERENCED | |
| + | HB 182 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 155 | TELECONFERENCED | |
| += | SB 118 | TELECONFERENCED | |
| += | HB 121 | TELECONFERENCED | |
CSHB 182(JUD)-OFFERING PROMOTIONAL CHECKS
2:03:03 PM
CHAIR ELLIS announced CSHB 182(JUD) to be up for consideration.
REPRESENTATIVE BOB LYNN, sponsor of HB 182, explained that this
bill is about small dollar checks that can cause big headaches
for Alaska consumers. The checks may be for only $3 or $4 and
according to the Department of Law, they are sent to thousands
of businesses and individuals throughout Alaska. The good news
is that the checks are legitimate, but the bad news is that in
actually cashing one of them can amount to an unintended
contract and hundreds of Alaskans cash these little checks only
to find they are bound by contract for products and services
they don't want and or need.
He explained that last year the Alaska Department of Law (DOL)
announced the settlement of a case with the California based
company that sent Alaskans what appeared to be rebates from
local yellow page companies. But it wasn't so. Endorsement of a
check for $3.49 amounted to an unintended contract for $179 in
advertising services. Consumers did not see the very tiny fine
print on the back of the check and they ended up getting billed
and hounded by collection agencies. The Consumer Protection
Division of the DOL considers these checks to be a classic
example of deceptive acts and practices and said that
prohibiting these checks is the only effective method of
preventing these charges from occurring.
Under this bill, companies that violate this law are subject to
a civil penalty of a minimum $1,000 per violation and a maximum
of $25,000 per violation. This bill makes this an automatic
violation under consumer protection laws.
2:05:46 PM
CHAIR ELLIS asked if this bill has anything to do with the blank
checks contained in credit card bills that can be used for
several purposes.
REPRESENTATIVE LYNN replied no; this is a very focused bill.
2:06:56 PM
SENATOR STEVENS said he has received these checks himself and
asked if Alaskans had actually been stuck paying the $180.
REPRESENTATIVE LYNN replied that it depends on the
sophistication of the check, which is a contract. He said a lot
of times one doesn't know when it happens.
2:09:20 PM
JULIA COSTER, Assistant Attorney General, Commercial Practices
Section, Department of Law (DOL), said that Representative Lynn
is absolutely correct. Sometimes the consumers don't know about
the charges until some incident happens that brings it to their
attention. Investigations have resulted in prosecutions and
settlements. The most recent case involved 34 state attorneys
general and resulted in a settlement. Rather than addressing the
issue piecemeal, HB 182 makes this issue an automatic violation.
2:13:35 PM
SENATOR STEVENS asked if "Yellow Pages, Inc." is a real company.
MS. COSTER answered that it does sound confusing, but it is the
settlement that Representative Lynn referred to. Yellow Pages,
Inc. is a company based in Anaheim, California, but it is not
the real yellow pages that put out the telephone book. It has an
on-line Internet directory. It sent out promotional checks to
consumers in Alaskans and all over the country who were billed
$179. The checks along with the marketing materials looked like
they were from the local yellow page companies and indicated
they were either a refund or a rebate. Collection agencies went
after them and many people paid just to save their credit even
though they didn't sign up for anything.
SENATOR STEVENS asked if the Attorney General's Office notifies
the public with an announcement to watch out for Yellow Pages,
Inc. when the company came to their attention.
MS. COSTER replied yes; press releases have been issued relating
to the settlement.
MARIE DARLIN, Coordinator, Capital City Task Force, supported HB
182. She has been told that half of all the telemarketing fraud
complaints that are received are from victims over 50 years of
age.
MIKE SICA, staff to Representative Lynn, testified that Dale
Layman from Alaska Pacific University who teaches students about
warranties and other things was embarrassed to say that he
signed one of those checks, but thought it was a good lesson he
could pass on to his students.
MR. SICA said that thousands of Alaskans have gotten these
promotional checks; hundreds have signed them. A lot of people
are embarrassed and others are intimidated into paying. Ms.
Coster had the best example of why this law is needed. Other
than a class action suit, the best way to deal with it is to put
an enumerated unfair practice in the law and give the Department
of Law a big hammer to whack them with.
2:18:57 PM
SENATOR DAVIS said she wanted to move the bill today.
CHAIR ELLIS said a committee member asked for more information.
2:20:10 PM at ease 2:20:53 PM
SENATOR DAVIS informed them that the committee member received
the information that he had asked for.
SENATOR STEVENS explained that he had asked for some real
examples of the problem, but he heard those during the course of
the testimony from the Department of Law. He moved to pass CSHB
182(JUD) from committee with individual recommendations and
attached fiscal notes. There were no objections and it was so
ordered.
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