Legislature(2003 - 2004)
05/01/2004 05:12 PM Senate JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.