05/02/2004 03:50 PM Senate JUD

     CSHB 339(JUD-TRADE PRACTICES: FREE TRIAL/OPT-OUT PLANS                                                                 
                                                                                                                                
REPRESENTATIVE KEVIN  MEYER, sponsor of HB  339, informed members                                                               
that he  would be commenting  on a proposed  committee substitute                                                               
(CS)  distributed  to  committee  members.  He  worked  with  the                                                               
Department of Law (DOL) and  other businesses on this legislation                                                               
to address concerns and believes the  changes made in the CS make                                                               
the bill better.                                                                                                                
                                                                                                                                
CHAIR SEEKINS  moved the  proposed committee  substitute, labeled                                                               
version B, as the working  document before the committee. With no                                                               
objection, the motion carried.                                                                                                  
                                                                                                                                
REPRESENTATIVE MEYER said CSHB 339(JUD)  is a consumer protection                                                               
bill that deals with two  business practices: the pretrial period                                                               
and  the  opt-out marketing  program.  No  one has  opposed  this                                                               
legislation during  its evolution and  it has picked up  many co-                                                               
sponsors. A  pretrial period  is used  by, for  example, magazine                                                               
companies, and  is a time  period for which a  potential consumer                                                               
receives magazines  at no charge  and then is  eventually charged                                                               
for  a subscription.  This legislation  clearly discloses  all of                                                               
the terms and conditions of that  pretrial period, as well as any                                                               
participating  consumers' obligations.  It  basically shifts  the                                                               
burden to  the business to  prove that all disclosures  were made                                                               
to the consumer in the case of a dispute.                                                                                       
                                                                                                                                
The  opt-out provision  addresses situations  in which  consumers                                                               
are given  a service,  for example call  waiting on  a telephone,                                                               
without requesting  it and are  charged for it. Those  people are                                                               
required to  take specific  actions to  opt-out of  that service.                                                               
Businesses use the opt-out method  because it is profitable as it                                                               
is  often  time  consuming  or  difficult  to  cancel.  The  bill                                                               
clarifies  the responsibilities  of the  consumer and  shifts the                                                               
burden to  the business to  prove that all disclosures  were made                                                               
to  the  consumer  before  he  or she  accepted  the  product  or                                                               
service.                                                                                                                        
                                                                                                                                
REPRESENTATIVE   MEYER  indicated   that  he   worked  with   the                                                               
Department  of Law,  as well  as East  Coast businesses  that use                                                               
these practices, to level out the playing field for consumers.                                                                  
                                                                                                                                
CHAIR SEEKINS said  he would outlaw opt-out plans  as he believes                                                               
they  are  meant  to  deceive  because they  depend  on  lack  of                                                               
communication or  people forgetting  for their success.  He noted                                                               
that  this legislature  has addressed  two bills  that deal  with                                                               
telephone  sales   and  more   people  are   asking  legislatures                                                               
nationwide to protect them from these kinds of marketing plans.                                                                 
                                                                                                                                
REPRESENTATIVE MEYER agreed.                                                                                                    
                                                                                                                                
There  being  no further  questions  or  testimony, SENATOR  OGAN                                                               
moved   SCS  CSHB   339(JUD)  from   committee  with   individual                                                               
recommendations and attached fiscal note(s).                                                                                    
                                                                                                                                
The motion  carried with Senators  Therriault, Ogan,  and Seekins                                                               
in favor.