Legislature(2003 - 2004)

03/25/2004 01:43 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
            HB  15-SOLICITATIONS/CONSUMER PROTECTION                                                                        
CHAIR  CON   BUNDE  announced  CSHB   15(FIN)am  to  be   up  for                                                               
MR. JIM POUND,  staff to Representative Hugh  Fate, sponsor, said                                                               
HB  15 was  introduced to  put a  stop to  annoying telemarketing                                                               
telephone  calls  that people  get  during  the dinner  hour.  He                                                               
related  that Congress  passed HR  385 establishing  the national                                                               
do-not-call  list and  the 10   Circuit  Court recently  affirmed                                                               
that it  does not violate  the U.S. Constitution.  CSHB 15(FIN)am                                                               
puts language  in statute that  acknowledges there is  a national                                                               
do-not-call list, establishes  registration for telemarketers and                                                               
enhances  the   federal  restrictions  they  must   follow  while                                                               
conducting business in  the State of Alaska. It  gives the Alaska                                                               
Department of Law authority to  enforce and go after those people                                                               
who  do  not  comply.  The  language  is  a  combined  effort  of                                                               
Representative Fate  and the  Department of Law  and is  aimed at                                                               
filling  in the  gaps left  by the  federal law,  which was  very                                                               
CHAIR  BUNDE   asked  for  information   on  the  fee   that  was                                                               
established and if the state was going to make money on this.                                                                   
MR. POUND replied  that the fiscal note indicates  that the state                                                               
should bring in $76,000 per  year from telemarketing registration                                                               
CHAIR  BUNDE  asked, "Is  this  a  break-even proposition  or  an                                                               
actual net gain?"                                                                                                               
MR. POUND replied:                                                                                                              
     There will be a  net gain. The original bill...requires                                                                    
     us to  set up our  own do-not-call list and  of course,                                                                    
     there's a negative  fiscal note on that  because of the                                                                    
     amount of labor-intensive aspects  of it. Tying in with                                                                    
     the  federal  legislation  basically  makes  it  a  lot                                                                    
     easier as  far as us  not having to maintain  a do-not-                                                                    
     call list specifically for Alaska.                                                                                         
CHAIR BUNDE asked him to expand on the exemptions in section 21.                                                                
MR. POUND explained that language was in existing statute and                                                                   
essentially exempts people from paying the registration fees.                                                                   
SENATOR HOLLIS FRENCH asked if an embalmer or funeral director                                                                  
has to abide by the national do-not-call list.                                                                                  
MR. POUND replied, "Yes, he does."                                                                                              
SENATOR FRENCH asked if they would have to pay a fee.                                                                           
MR. POUND replied that they don't.                                                                                              
SENATOR FRENCH said they would have to register, though.                                                                        
MR. POUND indicated that was correct.                                                                                           
CHAIR BUNDE asked how an entity goes through the process of                                                                     
registering with the department and if there is criteria for                                                                    
approval or disapproval.                                                                                                        
MR. POUND deferred that answer to Ms. Drinkwater, Department of                                                                 
Law, who helped draft the legislation.                                                                                          
MS. CINDY DRINKWATER, Assistant Attorney General, Consumer                                                                      
Protection Unit, answered:                                                                                                      
     If a telemarketer  wants to solicit in  the state, they                                                                    
     can either  request from the  Department of Law  a copy                                                                    
     of the  registration form or they  can simply down-load                                                                    
     it  off our  website.  It's a  fairly straight  forward                                                                    
     form  that requests  that they  attach copies  of their                                                                    
     articles   of  incorporation,   that  they   provide  a                                                                    
     description  of  any  affiliated  companies  or  parent                                                                    
     companies,  that  they provide  a  list  of the  actual                                                                    
     solicitors  who  would  be making  the  calls  and  the                                                                    
     managers of those solicitors. They  are asked to attach                                                                    
     a copy  of the scripts  or the sales  presentation that                                                                    
     they  use over  the  phone to  customers  and they  are                                                                    
     asked  to attach  a  copy of  a  written contract.  Our                                                                    
     registration  statute requires  that telemarketers  who                                                                    
     are  going to  be selling  over the  phone in  terms of                                                                    
     accepting  a  credit  card  number,  that  before  that                                                                    
     transaction  happens,  they  need   to  have  a  signed                                                                    
     purchase agreement  from the  consumer. So, as  part of                                                                    
     the registration  process, they  would need to  show us                                                                    
     an example of the contract form they intend to use.                                                                        
CHAIR  BUNDE  asked   how  a  national  firm   would  know  about                                                               
registering and how would the department enforce it.                                                                            
MS. DRINKWATER replied  that it's not unusual for  states to have                                                               
registration statutes  like Alaska's. Any national  company would                                                               
know it has to make  the inquiry about registration statutes. Her                                                               
office gets  quite a few phone  calls and hits on  its website on                                                               
that question.                                                                                                                  
Regarding  enforcement,   she  said  the  department   relies  on                                                               
consumers to  file complaints of  telemarketers who  are breaking                                                               
the  law.  Because of  the  large  number  of exemptions  to  the                                                               
registration statute, many telemarketers  can conduct business in                                                               
the state without having to register.                                                                                           
CHAIR BUNDE  said that might take  quite a few teeth  out of this                                                               
MS.  DRINKWATER agreed  and explained  that is  existing statute.                                                               
The amendments  in HB  15 include  requiring businesses  that are                                                               
registering to  pay a fee  and tightens  up other aspects  of the                                                               
current  law such  as for  paid  solicitors, who  in addition  to                                                               
paying fees, would  have to submit financial  reports after their                                                               
solicitation campaign ends.                                                                                                     
CHAIR BUNDE  said that the  trend is for  user fees to  equal the                                                               
cost of  providing the service, but  HB 15 has a  positive fiscal                                                               
note and  asked Representative  Fate to  explain his  thoughts on                                                               
REPRESENTATIVE FATE  replied that it  was felt that  this service                                                               
should pay for its own way under today's fiscal regime.                                                                         
SENATOR FRENCH asked if this act applied to charities.                                                                          
MS. DRINKWATER replied:                                                                                                         
     Basically,  HB   15  amends   not  only   the  Consumer                                                                    
     Protection Act  and, in  particular, the  state do-not-                                                                    
     call  bill, which  is  in existence  now,  but it  also                                                                    
     amends the  Charitable Solicitations Act  and Telephone                                                                    
     Solicitations Act, as I mentioned  before, as well as a                                                                    
     separate   statutory   scheme   called   the   Business                                                                    
     Opportunities Act, although the  amendments to that are                                                                    
     fairly minor.                                                                                                              
     As to  your question, does  this affect charities  - it                                                                    
     does  affect charities  and  their  paid solicitors  in                                                                    
     terms  of the  registration requirements.  Perhaps your                                                                    
     question is more directed to  the do-not-call aspect of                                                                    
     the bill  and the  answer to that  would be  that under                                                                    
     the  federal  do-not-call  registry, charities  do  not                                                                    
     have  to purchase  the registry.  They do  not have  to                                                                    
     scrub their lists  of people who do wish  to be called.                                                                    
     However, there  is also another  means by  which people                                                                    
     can  express  their  desire not  to  receive  telephone                                                                    
     calls. Not  only can they  sign up for  the do-not-call                                                                    
      list, but they can also tell companies on a case-by-                                                                      
     case basis that they do not  want to be called and that                                                                    
     is  referred to  as the  internal do-not-call  list. In                                                                    
     other  words,  the  paid  telemarketers  for  charities                                                                    
     would have to abide  by that internal do-not-call list,                                                                    
     although they  would not have  to purchase  the federal                                                                    
SENATOR FRENCH asked if he puts himself on the federal do-not-                                                                  
call list, would the local television station that he                                                                           
contributes to be free to call him once a year to remind him                                                                    
that he is a contributor.                                                                                                       
MS. DRINKWATER replied, "Yes, they would be able to do that,                                                                    
because they do not have to scrub their lists from the federal                                                                  
do-not-call registry."                                                                                                          
SENATOR FRENCH asked if that would apply to any other charities                                                                 
that he has not contributed to. "It sounds like you're saying                                                                   
these charities sort of fall out of the blocked category."                                                                      
MS. DRINKWATER replied:                                                                                                         
     That is correct.... The best  thing that a consumer can                                                                    
     do  in  terms  of  if  they  are  receiving  charitable                                                                    
     solicitations  that  they  do   not  wish  to  receive,                                                                    
     chances are that  the calls are being placed  by a paid                                                                    
     solicitor and  they can request on  an individual basis                                                                    
     that  they do  not wish  to  receive any  calls in  the                                                                    
MR. PAT LUBY, AARP Alaska, said:                                                                                                
     Thousands of  Alaskans are signed  up for  the national                                                                    
     do-not-call  list. AARP's  interest  is in  maintaining                                                                    
     the privacy of our citizens  who have signed up for the                                                                    
     national do-not-call list. Older  persons are home most                                                                    
     of the day.  They get many more calls than  those of us                                                                    
     who  are in  the  workplace -  in particular,  magazine                                                                    
     sales are  the most  notorious ones. We  get complaints                                                                    
     from our  members. These are  folks who  bother people;                                                                    
     they have what they call  goose lists that they sell to                                                                    
     each other  and anything we  can do to control  some of                                                                    
     those   calls  is   going  to   be  helpful   to  those                                                                    
     If an  Alaskan citizen  is signed  up for  the national                                                                    
     do-not-call  list,  they  should not  be  subjected  to                                                                    
     telemarketing  calls  that  originate in  Fairbanks  or                                                                    
     Anchorage  or  anywhere  else  in  the  state.  Federal                                                                    
     courts have reaffirmed that citizens  have the right to                                                                    
     privacy in their  homes. They should not  be subject to                                                                    
     home invasion over the telephone  if they indicate that                                                                    
     they do  not want to  be bothered. We hope  that you'll                                                                    
     give us back our dinner  hour and respect the wishes of                                                                    
     Alaskans who  have signed up  for the  national do-not-                                                                    
     call    list.   AARP    requests   your    support   of                                                                    
     Representative Fate's HB 15. Thank you.                                                                                    
SENATOR STEVENS asked for an  explanation of violation on page 2,                                                               
in section 4.                                                                                                                   
MR.  POUND replied  that section  refers to  someone who  did not                                                               
mean to make the call, for  instance, a solicitor who got a wrong                                                               
SENATOR STEVENS  asked who  decides what  the violations  are and                                                               
whether the punishments fit the crimes.                                                                                         
MS. DRINKWATER replied  that the penalty for a  violation of this                                                               
provision is in  the state's Consumer Protection  Act. That means                                                               
that if  the state  were to seek  a lawsuit, it  could ask  up to                                                               
$5,000 per violation, restitution  for damages, injunctive relief                                                               
and any  other remedy  that might be  appropriate. The  other key                                                               
feature  is  that  it  gives  the  private  right  of  action  to                                                               
consumers, because  the Consumer  Protection Act has  a provision                                                               
awarding triple damages.                                                                                                        
     If we're left  with just trying to  enforce the federal                                                                    
     law, which  state attorneys general have  the authority                                                                    
     to  do,  we  would  be limited  to  bringing  cases  in                                                                    
     federal  court, although  the  amount  of the  possible                                                                    
     fine or  civil penalty is  higher - it's up  to $11,000                                                                    
     per violation.  There is more  flexibility in  terms of                                                                    
     other  relief  under  our Consumer  Protection  Act  in                                                                    
     state court.                                                                                                               
SENATOR STEVENS asked if penalties are just a fine of money.                                                                    
MS. DRINKWATER  replied that injunctive relief  is a possibility.                                                               
That  means  shutting a  business  down  or ceasing  the  illegal                                                               
conduct at the very least.                                                                                                      
TAPE 04-26, SIDE B                                                                                                            
MR.  ROBERT  FLINT,  Hartig  Rhodes Hoge  and  Lekisch,  said  he                                                               
represents  Direct  Marketing   Association  (DMA)  and  Magazine                                                               
Publishers of America (MPA).                                                                                                    
     These are trade associations  of businesses that market                                                                    
     products  directly to  consumers  by mail,  advertising                                                                    
     and  telephone.  Products  include  periodicals,  sound                                                                    
     recordings,  books,  CDs   videos  and  similar  items.                                                                    
     Promotions often  include free  gifts or  trial periods                                                                    
     with  a  cancellation option  if  the  customer is  not                                                                    
     satisfied or  has a change  of mind. In all  cases, the                                                                    
     customer specifically accepts the  offer before it goes                                                                    
     into effect.                                                                                                               
     HB 15  contains a Section 21  on page 8, line  14, that                                                                    
     would  remove the  exemption  for  magazines and  other                                                                    
     periodicals   and  similar   items   from  the   Alaska                                                                    
     Telemarketing Act,  AS 45.63.80(10).  I want  to hasten                                                                    
     to add  I'm talking  about this particular  section and                                                                    
     not  the direct  call  provision. The  concern that  my                                                                    
     clients  have  is  with this  exemption,  which  is  an                                                                    
     exemption  from  the  Telemarketing  Act.  We  have  no                                                                    
     testimony  or  complaint  about  the  do-not-call  list                                                                    
     either state or federal.                                                                                                   
     For  reasons  I  will  discuss,  the  direct  marketing                                                                    
     publishers oppose the removal  of this exemption. I was                                                                    
     saying also that from the  beginning the summary of the                                                                    
     bill  says that  the changes  to the  exemption statues                                                                    
     are technical.  This is not  a technical  amendment. It                                                                    
     takes a large segment of  the industry, removes it from                                                                    
     exemption  of  the  act  and   subjects  it  to  severe                                                                    
     criminal penalties for violation of that act.                                                                              
     The  origin of  the  Alaska  Telemarketing Act...is  an                                                                    
     anti-fraud statute  that was  originally aimed  at fly-                                                                    
     by-night   telemarketers.  It   requires  registration,                                                                    
     which is easier  to charge as a  violation than proving                                                                    
     fraud.  So,  the  charge  and  the  penalties  are  for                                                                    
     failure to register rather than  the fraud, itself. But                                                                    
     here,  to underline  the  non-technical  aspect of  the                                                                    
     change  of  section  21, are  the  criminal  penalties,                                                                    
     which  you will  find  in the  Telemarketing Act,  [AS]                                                                    
     43.63.060.  That hasn't  been changed,  so it's  not in                                                                    
     the  CS   bill....  This  is   in  AS   43.63.060,  the                                                                    
     Telemarketing Act.  A person  who sells or  attempts to                                                                    
     sell  property  or  services  by  telephonic  means  by                                                                    
     making substantially  the same offer  and substantially                                                                    
     the  same   terms  to  two  or   more  persons  without                                                                    
     complying with the  registration - that's one  - or who                                                                    
     solicits  or receives  payment  for  a purchase  before                                                                    
     receiving the  written contract required, is  guilty of                                                                    
     a class C felony. The people who are after the fly-by-                                                                     
     nighters were serious  about this and that  is why this                                                                    
     is a [indisc.] statute. We're  not talking about a fine                                                                    
     or  an injunction  or even  a misdemeanor  for heaven's                                                                    
     sakes. It's a class C felony.  So, for example - let me                                                                    
     back up  just a second  - to sell property  or services                                                                    
     by  telephonic  means  is  defined   in  the  act  -  '                                                                    
     Telephonic  means includes  a letter,  postcard, notice                                                                    
     or  other written  communication advising,  requesting,                                                                    
     motivating  or   otherwise  encouraging  a   person  to                                                                    
     contact  a  seller by  telephonic  means.'  So a  small                                                                    
     publication,  for example  Archeology Today....  It has                                                                  
     an ad in its publication...on  the newsstand in Alaska,                                                                    
     which  says  you  can subscribe  to  this  magazine  by                                                                    
     calling this  number. If they are  not registered, that                                                                    
     is  a  violation  of  the act  and  subject  to  felony                                                                    
     The other  circumstance is the written  contract, which                                                                    
     simply  does not  conform with  what national  business                                                                    
     does.  First of  all, I'd  like  to put  it in  context                                                                    
     here. The calls we all  love to hate are the solicitors                                                                    
     that call  us at dinnertime.  We all have that;  we all                                                                    
     hate them. That's why there  is a do-not-call list. But                                                                    
     the Telemarketing  Act is not determined  by the origin                                                                    
     of  the call.  An incoming  call from  a customer  to a                                                                    
     seller is covered by the  act. So, someone sees the ad.                                                                    
     It may  be the  ad in  a magazine,  which is  already a                                                                    
     class  C  felony,  or  it  may  be  someplace  else.  A                                                                    
     magazine may  have placed  an ad  in the  newspaper. It                                                                    
     could even be on the  Internet, I suppose, these days -                                                                    
     definitely these days. So,  the customer originates the                                                                    
     call to  the operator at  Rapid City, South  Dakota, or                                                                    
     India, wherever  these people are these  days, and says                                                                    
     I'd like  to subscribe to  your magazine. And  she says                                                                    
     fine, thank  you, you can  pay by credit card.  What is                                                                    
     your credit card number? The  customer gives the credit                                                                    
     card number; she  books the sale and she's  guilty of a                                                                    
     class  C felony  because there's  no written  contract.                                                                    
     Now, how  do you cure that?  Well, the way you  cure it                                                                    
     is you either,  first, conform to the act  and you have                                                                    
     a  written   contract  or   you  redline   Alaska.  The                                                                    
     practical fact  is that  this national  business, which                                                                    
     does  transactions   in  the  hundreds   of  thousands,                                                                    
     doesn't do business that way.                                                                                              
     A  written  contract  in  advance  has  the  effect  of                                                                    
     selling twice, I guess. It  just isn't the way national                                                                    
     business is  done. So, the  seller of  Archeology Today                                                                  
     magazine or Time magazine or  anything else isn't going                                                                  
     to conform  the national  market to Alaska.  After all,                                                                    
     the national  market is -  well let's see -  my figures                                                                    
     were  Alaska  is one  quarter  of  one percent  of  the                                                                    
     American  market.  So,  they would  have  to  create  a                                                                    
     special procedure  for Alaska that would  be costly and                                                                    
     raise  the cost  for  them, at  least,  for the  Alaska                                                                    
     consumer.  They'll  absorb it,  if  they  could do  it.                                                                    
     Generally, these people have  uniform prices across the                                                                    
     country.  This,  after  all, is  a  national  marketing                                                                    
     business to the entire country.                                                                                            
     Now, we  are an  association. The Direct  Marketers and                                                                    
     the Magazine  Publishers Association is a  trade group.                                                                    
     So, they don't  actually do it. And  there are hundreds                                                                    
     and literally  thousands of marketers and  they all had                                                                    
     to  make  their own  decisions.  But  the fact  of  the                                                                    
     matter  is to  do  that  for a  small  market would  be                                                                    
     extraordinarily   costly  and,   I   think,  the   only                                                                    
     conclusion that  they would come to  basically with one                                                                    
     quarter of one  percent of the market is, as  I say, to                                                                    
     take Alaska out  of the market. So, that  the ads would                                                                    
     have,  in  small print  I  guess,  offer not  valid  in                                                                    
     Alaska. And  the operators would have  to be instructed                                                                    
     to basically  not take the  call over the  telephone. I                                                                    
     think  that's a  pretty drastic  solution, particularly                                                                    
     because when this  law was enacted in Alaska  in 1993 -                                                                    
     it was originally enacted in  California in 1985 - that                                                                    
     actually, I gather,  happens to be where a  lot of this                                                                    
     back  room  stuff  goes  on  -  where  people  do  this                                                                    
     telemarketing,  get  credit  cards and  then  move  and                                                                    
     basically have  no fixed address. So,  California would                                                                    
     start  that and  Alaska followed  along with  a lot  of                                                                    
     other states.                                                                                                              
     In 1993, the Direct  Marketing Association was involved                                                                    
     with  the Attorney  General's  Office.  Attached to  my                                                                    
     testimony I've  given you a  letter from  the assistant                                                                    
     attorney general at the time  who worked with, in fact,                                                                    
     the  principal that  I work  with now  [indisc.].... At                                                                    
     that time,  the Attorney General's Office  seemed to be                                                                    
     in sync as  to who the target of  the Telemarketing Act                                                                    
     really was and who was  not a target and the legitimate                                                                    
     businesses represented by the  association were not the                                                                    
     target. This  law changes  that substantially  to bring                                                                    
     them under basically the same as the fly-by-nighters.                                                                      
     The  [indisc.] of  my testimony  here is  that what  we                                                                    
     have  substantial businesses  nationwide who  have long                                                                    
     done  this legitimately.  They are  subject to  Federal                                                                    
     Trade  Commission regulations  that  are extensive  and                                                                    
     govern  these  items; they  were  not  involved in  the                                                                    
     rash,  as I've  noted here,  in the  80s and  early 90s                                                                    
     where there  was prosecution by  the state  and federal                                                                    
     governments for this type of fraud....                                                                                     
     As I  say, it's deliberately onerous.  The registration                                                                    
     itself is  20 questions including the  name and address                                                                    
     and principal address of each  seller. So, I assume the                                                                    
     telephone operator  in India  would have to  be listed.                                                                    
     We are  not sure what  the impetus for this  removal of                                                                    
     the   exemption  is.   In  my   discussions  with   the                                                                    
     Department  of Law,  magazines were  supposed  to be  a                                                                    
     problem. Now,  whether that's an inbound  problem or an                                                                    
     outbound  problem, I  don't know  and can't  tell. I've                                                                    
     asked for  statistical information from  the Department                                                                    
     of Law. I've filed a  freedom of information request to                                                                    
     try to see  what the scope of the problem  is, but have                                                                    
     heard nothing  back from that. So,  basically, for this                                                                    
     amendment,  there is  actually no  empirical data  that                                                                    
     supports  the  removal,  much less  the  imposition  of                                                                    
     criminal  penalties.  Again,  I  would  note  that  the                                                                    
     association, as  you see from my  correspondence, makes                                                                    
     every  effort  to  work  with   states  and  work  with                                                                    
     attorney generals  to deal with  these problems.  It is                                                                    
     as much  in their interest  as it is in  the consumer's                                                                    
     to  have honest  business conducted  so they  don't get                                                                    
     mud splashed  on them.... Nothing of  the kind happened                                                                    
     here. I  must say that I  do not believe an  effort has                                                                    
     been made  by the Department  of Law to  educate itself                                                                    
     on how this business works and the impact.                                                                                 
CHAIR BUNDE asked him to summarize.                                                                                             
MR. FLINT summarized:                                                                                                           
     The people I  represent aren't the crooks  and we don't                                                                    
     think  we   should  be  made  the   crooks.  There  are                                                                    
     significant  regulations  and   we  believe  those  are                                                                    
     adequate.  We do  not believe  the exemption  should be                                                                    
CHAIR BUNDE asked  Ms. Drinkwater if he went to  a magazine stand                                                               
and  bought a  magazine with  a printed  solicitation for  him to                                                               
call in and order a magazine,  would that company be in violation                                                               
of HB 15 as currently written.                                                                                                  
MS.  DRINKWATER replied  that was  a possible  interpretation. An                                                               
amendment  could  exclude that  kind  of  situation, because  the                                                               
purpose of that definition, which  is found in AS 45.63.100, that                                                               
is  not part  of the  bill,  was to  include letters,  postcards,                                                               
notices   or  other   written   communications   to  a   consumer                                                               
encouraging them to call.                                                                                                       
     What the problem  that we see is  that people sometimes                                                                    
     get  postcards that  have  very  little information  on                                                                    
     them and  it will say  we've been trying to  reach you.                                                                    
     Please call us at our  800 number. The consumer doesn't                                                                    
     know what the nature of  the postcard is or why someone                                                                    
     has been  trying to  contact them.  They call  and find                                                                    
     that it's  a magazine  offer that's being  presented to                                                                    
       them.... So, I think that's something that can be                                                                        
MS.  DRINKWATER  explained that  magazine  scams  have a  lot  of                                                               
effect  on  consumers  in  Alaska,  often  senior  citizens.  She                                                               
outlined  four  consumer  complaints  from  2003.  One  gentleman                                                               
complained  that for  a year  he had  received magazines  and had                                                               
been billed  for them, but  he had  never ordered them.  He spent                                                               
considerable  efforts  over  18  months  trying  to  resolve  the                                                               
problem. When  he left the  country to  be a missionary  in South                                                               
Africa,  his  subscriptions  were  forwarded  to  his  sister  in                                                               
California and the bills continued to arrive.                                                                                   
Another  example is  a woman  received  a phone  call offering  a                                                               
subscription to some magazines for a  year. She told them she was                                                               
on  disability  and could  only  afford  payments of  $29.90  per                                                               
month.  That  amount was  debited  electronically  from her  bank                                                               
account.  Suddenly  the company  started  taking  out twice  that                                                               
amount. When  she called about it,  they told her it  was because                                                               
she had  two separate  accounts and they  were going  to continue                                                               
billing her in that same fashion.                                                                                               
A third example  is of magazine renewal  scams. Another gentleman                                                               
complained  about  receiving  a  subscription  renewal,  but  the                                                               
information did not  come from the company that had  sold him the                                                               
magazine, rather from a fraudulent  business that somehow learned                                                               
subscribers' information.                                                                                                       
A fourth complaint  is from an 86-year old gentleman  who did not                                                               
order any magazines,  but was suddenly billed for  them. When the                                                               
department wrote to the company  with his complaint attached, the                                                               
company responded that  he did, in fact, make the  order on tape.                                                               
It appeared that  he had consented over the phone  to receive the                                                               
magazines,  but  he  didn't recall  that  phone  conversation.  A                                                               
written  contract  would have  provided  him  with the  paperwork                                                               
necessary to review the information.                                                                                            
CHAIR  BUNDE asked  the bill's  sponsor, Ms.  Drinkwater and  Mr.                                                               
Flint to work together to address the concerns that were raised.                                                                
REPRESENTATIVE FATE  pointed out  that language  on page  3, line                                                               
18, exempts a  customer who initiates a phone call  from being in                                                               
violation of this act.                                                                                                          
CHAIR  BUNDE related  a solution  he  used once  for a  long-play                                                               
record club. He was sent to  Germany by the military and tried to                                                               
discontinue his  subscription, but the  company never got  any of                                                               
his cancellation  notices. It sent  "tons" of records  to Germany                                                               
that arrived  in multiple  pieces. He wrote  to the  company many                                                               
times saying he  never received the records and asked  to be left                                                               
alone, but they  threatened to sue him. When he  got married, his                                                               
wife took the  situation seriously and tore a piece  of paper out                                                               
of a spiral  notebook and wrote in pencil, "My  husband, he ain't                                                               
workin'. We ain't got no money." They never bothered him again.                                                                 

Document Name Date/Time Subjects