04/27/2004 01:32 PM Senate L&C

    CS HB 339(JUD)-TRADE PRACTICES: FREE TRIAL/OPT-OUT PLANS                                                                  
                                                                                                                                
CHAIR  CON   BUNDE  announced   CSHB  339(JUD)   to  be   up  for                                                               
consideration in Labor and Commerce for the first time.                                                                         
                                                                                                                                
REPRESENTATIVE  KEVIN  MEYER,  sponsor,  said  this  is  truly  a                                                               
consumer protection  bill that  addresses two  distinct marketing                                                               
practices. The first  is the free trial period and  the second is                                                               
the opt out marketing program.  The free trial period pertains to                                                               
magazines that  offer someone  to view its  magazine for  30 days                                                               
and then if he likes  it, the billing starts. Unfortunately, it's                                                               
not always  clear after that free  trial period as to  what one's                                                               
obligations  are.  This bill  requires  that  the seller  clearly                                                               
disclose  all material  terms and  conditions of  the free  trial                                                               
period. This  includes any  obligations the  user has  during the                                                               
free trial period and describes the  charges and how they will be                                                               
made after  the product has been  used in the free  trial period.                                                               
It  will shift  the burden  onto the  business to  prove that  it                                                               
fully  disclosed  all of  its  requirements  and obligations  for                                                               
using the product during the free trial period.                                                                                 
                                                                                                                                
The  second  issue is  the  opt-out  marketing plan.  Last  year,                                                               
telecommunication  companies  were  offering a  service  on  cell                                                               
phones that  unless a person  opted out, he or  she automatically                                                               
got charged  for it.  This isn't fair.  Also, sometimes  when you                                                               
try to opt out of something,  that 1-800 number can be on eternal                                                               
hold. "It's very  frustrating for the buyer."  Businesses rely on                                                               
people not opting out.                                                                                                          
                                                                                                                                
MS.   DRINKWATER,   Department   of    Law   (DOL),   said   that                                                               
Representative Meyer gave a very  accurate summary of the purpose                                                               
of  the bill,  which the  department supports,  and she  would be                                                               
happy to answer questions.                                                                                                      
                                                                                                                                
MS.  VIRGINIA  TORNESS,  Alaska Public  Interest  Research  Group                                                               
(AKPIRG),  supported  HB  339, because  it  will  better  protect                                                               
consumers in Alaska.  Opt out plans have often been  used to trap                                                               
consumers in the purchasing of  goods or services, simply because                                                               
they did not check a box  or send back the appropriate form. This                                                               
is essentially true of most free trial offers.                                                                                  
                                                                                                                                
CHAIR BUNDE noted a letter from AARP in support of HB 339.                                                                      
                                                                                                                                
SENATOR SEEKINS moved  to pass CSHB 339(JUD)  from committee with                                                               
individual  recommendations   and  fiscal  note.   Senators  Gary                                                               
Stevens, Hollis French,  Ralph Seekins and Chair  Con Bunde voted                                                               
yea; and CSHB 339(JUD) moved from committee.