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 9  AN ACT concerning consumer protection; relating to prize notification;
10    amending K.S.A. 50-692 and repealing the existing section.
11
12  Be it enacted by the Legislature of the State of Kansas:
13    Section 1.  K.S.A. 50-692 is hereby amended to read as follows: 50-
14  692. (a) As used in this section:
15    (1)  ``Prize'' means a gift, award or other item or service of value.
16    (2)  ``Prize notice'' means a an oral or written notice given to an in-
17  dividual in this state that satisfies all of the following:
18    (A)  Is or contains a representation that the individual has been se-
19  lected or may be eligible to receive a prize.
20    (B)  Conditions receipt of a prize on a payment from the individual
21  or requires or invites the individual to make a contact to learn how to
22  receive the participate in or to enter a promotion to receive a prize or to
23  obtain other information related to the notice.
24    (3)  ``Promotion'' means a prize notice offering a prize, or a chance to
25  obtain a prize, to a person based on a representation that the individual
26  has been selected or may be eligible to receive a prize.
27    (4)  ``Solicitor'' means a person who represents to an individual that
28  the individual has been selected or may be eligible to receive a prize.
29    (4) (5)  ``Sponsor'' means a person on whose behalf a solicitor gives a
30  prize notice.
31    (5) (6)  ``Verifiable retail value'' of a prize means:
32    (A)  A price at which the solicitor or sponsor can demonstrate that a
33  substantial number of the prizes have been sold by a person other than
34  the solicitor or sponsor in the trade area in which the prize notice is given.
35    (B)  If the solicitor or sponsor is unable to satisfy paragraph (A), no
36  more than 1.5 times the amount the solicitor or sponsor paid for the prize.
37    (b)  If a solicitor represents to an individual, by oral or written com-
38  munication, that the individual has been selected or may be eligible to
39  receive a prize, the solicitor shall not request, and the solicitor or sponsor
40  shall not accept, a payment from the individual in any form and the so-
41  licitor shall not create the reasonable impression that such payment is
42  required before the individual receives a written prize notice that contains
43  all of the information required under subsection (c)(1) presented in the
HB 2479
                                     

 1  manner required under subsection (c)(2) through (6).
 2    (c) (1)  A An oral or written prize notice shall contain all of the fol-
 3  lowing information presented in the manner required under paragraphs
 4    (1) subsections (c)(2) through (6):
 5    (A)  The name and address of the solicitor and sponsor.
 6    (B)  The verifiable retail value of each prize the individual has been
 7  selected or may be eligible to receive.
 8    (C)  If the notice lists more than one prize that the individual has been
 9  selected or may be eligible to receive, A statement of the odds the indi-
10  vidual has of receiving each prize.
11    (D)  Any requirement or invitation for the individual to view, hear or
12  attend a sales presentation in order to claim a prize, the approximate
13  length of the sales presentation and a description of the property or serv-
14  ice that is the subject of the sales presentation.
15    (E)  Any requirement that the individual pay shipping or handling fees
16  or any other charges to obtain or use a prize.
17    (F)  If a receipt of the prize is subject to a restriction, a statement that
18  a restriction applies, and a description of the restriction and a statement
19  containing the location in the notice where the restriction is described.
20    (G)  Any limitations on eligibility.
21    (2) (A)  The verifiable retail value and the statement of odds required
22  in a written prize notice under paragraphs subsections (c) (1)(B) and (C)
23  shall be stated in immediate proximity to each listing of the prize in each
24  place the prize appears on the written prize notice and shall be in the
25  same size and boldness of type as the prize, but not less than 10-point
26  boldface type.
27    (B)  The verifiable retail value and the statement of odds required in
28  an oral prize notice under subsections (c)(1)(B) and (C) shall be stated
29  immediately following any statement regarding any prize offered.
30    (C)  The statement of odds shall include, for each prize, the total
31  number of prizes to be given away and the total number of written prize
32  notices to be delivered. The number of prizes and written prize notices
33  shall be stated written in Arabic numerals or stated in a manner that is
34  clear and understandable. The statement of odds shall be in the following
35  form: ``[su1](number of prizes)[xu out of _________ written prize notices.''
36    (C) (D)  The verifiable retail value shall be in the following form: ``the
37  verifiable retail value: $____________.''
38    (3)  If an individual is required to pay shipping or handling fees or any
39  other charges to obtain or use a prize, the following statement shall appear
40  in immediate proximity to each listing of the prize in each place the prize
41  appears in the written prize notice and shall be in not less than 10-point
42  boldface type: ``YOU MUST PAY $____________ IN ORDER TO RE-
43  CEIVE OR USE THIS ITEM.''
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 1    (4)  The information required in a written prize notice under para-
 2  graph subsection (c) (1)(D) shall be on the first page of the written prize
 3  notice in not less than 10-point boldface type. The information required
 4  under paragraph subsections (c) (1)(F) and (G) shall be in not less than
 5  10-point boldface type.
 6    (5)  If a written prize notice is given by a solicitor on behalf of a
 7  sponsor, the name of the sponsor shall be more prominently and con-
 8  spicuously displayed than the name of the promoter.
 9    (6)  A solicitor or sponsor shall not do any of the following:
10    (A)  Place on an envelope containing a written prize notice any rep-
11  resentation that the person to whom the envelope is addressed has been
12  selected or may be eligible to receive a prize.
13    (B)  Deliver a written prize notice that contains language, or is de-
14  signed in a manner, that would lead a reasonable person to believe that
15  it originates from a government agency, public utility, insurance company,
16  consumer reporting agency, debt collector or law firm unless the written
17  prize notice originates from that source.
18    (C)  Represent directly or by implication that the number of individ-
19  uals eligible for the prize is limited or that an individual has been selected
20  to receive a particular prize unless the representation is true.
21    (d)  If a prize notice requires or invites an individual to view, hear or
22  attend a sales presentation in order to claim a prize, the sales presentation
23  shall not begin until the solicitor does all of the following:
24    (1)  Informs the individual of the prize, if any, that has been awarded
25  to the individual.
26    (2)  If the individual has been awarded a prize, delivers to the indi-
27  vidual the prize or the item selected by the individual under subsection
28    (e) if the prize is not available.
29    (e) (1)  A solicitor who represents to an individual in a written prize
30  notice that the individual has been awarded a prize shall provide the prize
31  to the individual unless the prize is not available. If the prize is not avail-
32  able, the solicitor shall provide the individual with any one of the following
33  items selected by the individual:
34    (A)  Any other prize listed stated in the written prize notice that is
35  available and that is of equal or greater value.
36    (B)  The verifiable retail value of the prize in the form of cash, a
37  money order or a certified check.
38    (C)  A voucher, certificate or other evidence of obligation stating that
39  the prize will be shipped to the individual within 30 days at no cost to
40  the individual.
41    (2)  If a voucher, certificate of other evidence of obligation delivered
42  under paragraph subsection (e) (1)(C) is not honored within 30 days, the
43  solicitor shall deliver to the individual the verifiable retail value of the
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 1  prize in the form of cash, a money order or a certified check. The sponsor
 2  shall make the payment to the individual if the solicitor fails to do so.
 3    (f)  Nothing in this section shall be construed to permit an activity
 4  otherwise prohibited by law.
 5    (g)  Any violation of this section is an unconscionable act or practice
 6  under the Kansas consumer protection act.
 7    (h)  In addition to any other remedies, a person suffering pecuniary
 8  loss because of a violation by another person of this section may bring an
 9  action in any court of competent jurisdiction and shall recover all of the
10  following:
11    (1)  The greater of $500 $1,000 or twice the amount of the pecuniary
12  loss.
13    (2)  Costs and reasonable attorney fees.
14    (i)  The provisions of this section shall not apply to the sale or pur-
15  chase, or solicitation or representation in connection therewith, of goods
16  from a catalog or of books, recordings, videocassettes, periodicals and
17  similar goods through a membership group or club which is regulated by
18  the federal trade commission trade regulation rule concerning use of neg-
19  ative option plans by sellers in commerce or through a contractual plan
20  or arrangement such as a continuity plan, subscription arrangement or a
21  single sale or purchase series arrangement under which the seller ships
22  goods to a consumer who has consented in advance to receive such goods
23  and the recipient of such goods is given the opportunity, after examination
24  of the goods, to receive a full refund of charges for the goods or unused
25  portion thereof, upon return of the goods or unused portion thereof,
26  undamaged.
27    (j)  This section shall be part of and supplemental to the Kansas con-
28  sumer protection act.
29    Sec. 2.  K.S.A. 50-692 is hereby repealed.
30    Sec. 3.  This act shall take effect and be in force from and after its
31  publication in the statute book.