Session of 2000
HOUSE BILL No. 2915
By Representatives Findley, Ballard,
Barnes, Crow, Dean, Feuerborn,
Garner,
Gilbert, Henderson, Johnston, Kirk, Larkin, M. Long, Mc-
Clure,
McKechnie, Minor, Nichols, O'Brien, Pauls, E. Peterson,
Phelps,
Reardon, Rehorn, Ruff, Sharp, Showalter, Spangler, Storm,
Swenson,
Toelkes, Wells and Welshimer
2-9
14 AN ACT amending
and supplementing the Kansas consumer protection
15 act; relating to
telemarketing fraud; requiring registration and certain
16 record keeping;
prohibiting certain acts and providing penalties and
17 remedies for
violations; concerning prize notification; amending K.S.A.
18 50-672, 50-675 and
50-692 and repealing the existing sections.
19
20 Be it enacted by the Legislature of the
State of Kansas:
21 Section
1. K.S.A. 50-672 is hereby amended to read as follows: 50-
22 672. (a) Any verbal agreement made by
a consumer to purchase any
23 goods or services from a telemarketer shall
not be considered valid and
24 legally binding unless the telemarketer
receives from the consumer a
25 signed confirmation that discloses in full
the terms of the sale agreed
26 upon.
27 (b) The
confirmation shall include, but is not limited to, the
following
28 information:
29 (1) The name of
the telemarketer;
30 (2) the address
and telephone number at which personal or voice
31 contact with an employee or agent of the
telemarketer can be made dur-
32 ing normal business hours;
33 (3) a list of all
prices or fees being requested, including any handling,
34 shipping, delivery, or other charges;
35 (4) the date of
the transaction;
36 (5) a detailed
description of the goods or services being sold;
37 (6) any
restrictions, limitations or conditions to purchase the
goods
38 or services being sold;
39 (7) any
material aspect of the performance, quality, efficacy,
nature
40 or basic characteristics of the goods or
services being sold;
41 (8) any
material aspect of the nature or terms of refund,
cancellation,
42 exchange or repurchase policies;
43 (6)
(9) a duplicate copy with the complete information as
presented
44 in the original confirmation, to be
retained by the consumer as proof of
2
1 the terms of the agreement to
purchase; and
2
(7) (10) in a type size of a minimum
of twelve points, in a space
3 immediately preceding the space
allotted for the consumer signature, the
4 following statement:
5 "YOU ARE NOT
OBLIGATED TO PAY ANY MONEY UNLESS
6 YOU SIGN THIS CONFIRMATION AND RETURN
IT TO THE
7 SELLER."
8 (c) A
telemarketer may not make or submit any charge to the con-
9 sumer's credit card account until the
telemarketer has received from the
10 consumer an original copy of a
confirmation, signed by the consumer,
11 that complies with this section. Any
merchandise sent or services provided
12 without such written confirmation shall be
considered as unsolicited
13 goods subject to the provisions of K.S.A.
50-617 and amendments thereto.
14 (d) No consumer
shall be held liable for payment for any good or
15 service provided by a telemarketer unless
such telemarketer has first re-
16 ceived the written consent of the consumer
in the form of a confirmation
17 as defined in this section.
18 (e) In the event
that the consumer sends payment to the telemarketer
19 in the form of a personal check, cash
money, or any other form of payment
20 other than credit card without having
included a signed copy of such
21 confirmation, the consumer shall have the
right to choose at any time to
22 cancel the sale by notifying the
telemarketer in writing, provided the
23 consumer returns to the telemarketer the
goods sold in substantially the
24 same condition as when they were received
by the consumer. A telemar-
25 keter that has received such notice to
cancel from a consumer shall then,
26 within 10 business days of the receipt of
such notice:
27 (1) Refund all
payments made, including any down payment made
28 under the agreement;
29 (2) return any
goods or property traded in to the seller on account of
30 or in contemplation of the agreement, in
substantially the same condition
31 as when received by the telemarketer;
and
32 (3) take any
action necessary or appropriate to terminate promptly
33 any security interest created in connection
with the agreement.
34 New Sec.
2. (a) No telemarketer shall conduct business in this
state
35 without having registered with the attorney
general at least 60 days before
36 conducting such business. An application
for renewal shall be made on
37 an annual basis thereafter.
38 (b) The
application for a certificate of registration or renewal shall
39 include, but not be limited to, the
following information:
40 (1) The name,
current address, telephone number and location of the
41 telemarketer, including each name under
which the telemarketer intends
42 to engage in telemarketing;
43 (2) each
occupation or business that the telemarketer's principal
3
1 owner has engaged in for two years
immediately preceding the date of
2 the application;
3 (3) whether
any principal or manager of the telemarketer has been
4 convicted or plead guilty to or is
being prosecuted by indictment for
5 racketeering, violations of state or
federal securities laws or a theft
6 offense;
7 (4) whether
there has been entered against any principal or manager
8 of the telemarketer an injunction,
temporary restraining order or a final
9 judgment in any civil or
administrative action, involving fraud, theft, rack-
10 eteering, embezzlement, fraudulent
conversion or misappropriation of
11 property, including any pending litigation
against the applicant;
12 (5) whether the
telemarketer, at any time during the previous seven
13 years, has filed for bankruptcy, been
adjudged bankrupt or been reor-
14 ganized because of insolvency;
15 (6) the name,
current home address, date of birth, social security
16 number and all other names of the
following:
17 (A) Each person
to be employed by the telemarketer;
18 (B) each person
participating in or responsible for the management
19 of the telemarketer's business; and
20 (C) each person,
(office manager, supervisor) principally responsible
21 for the management of the telemarketer's
business;
22 (7) the name,
address and account number of every institution where
23 banking or any other monetary transactions
are done by the seller; and
24 (8) a copy of all
scripts, outlines or presentation material the tele-
25 marketer will use when soliciting as well
as all sales information to be
26 provided by the telemarketer to a purchaser
in connection with any te-
27 lemarketing contract.
28 New Sec.
3. (a) A telemarketer shall keep for a period of 24 months
29 from the date the record is produced,
records of all financial transactions,
30 written notices, disclosures and
acknowledgments, in the form, manner,
31 format or place as the telemarketer keeps
such records in the ordinary
32 course of business, including but not
limited to:
33 (1) All
substantially different advertising, brochures, telemarketing
34 scripts and promotional materials;
35 (2) the name and
last known address of each customer, the goods or
36 services purchased, the date such goods or
services were shipped or pro-
37 vided and the amount provided and the
amount paid by the customer for
38 the goods or services;
39 (3) the name, any
fictitious name used, the last known home address
40 and telephone number and the job title for
all current and former em-
41 ployees directly involved in telephone
sales but, if the telemarketer per-
42 mits fictitious names to be used by
employees, each fictitious name must
43 be traceable to only one specific employee;
and
4
1 (4) all
written authorizations or confirmations required to be pro-
2 vided or received under this act.
3 (b) In the
event of any dissolution or termination of the telemarke-
4 ter's business, the principal of that
telemarketer shall maintain all records
5 as required under this section. In
the event of any sale, assignment or
6 other change in ownership of the
telemarketer's business, the successor
7 shall maintain all records required
under this section.
8 Sec.
4. K.S.A. 50-675 is hereby amended to read as follows:
50-675.
9 (a) This act shall be part of and
supplemental to the Kansas consumer
10 protection act.
11
(b) Any It is an unconscionable act within
the meaning of K.S.A. 50-
12 627 and amendments thereto for a
telemarketer or a telemarketer's agent
13 to:
14
(1) Attempt to collect a fee, or enforce a credit card
charge or trans-
15 action or any refusal
refuse to make a refund to the consumer in violation
16 of this act is an unconscionable
act within the meaning of K.S.A. 50-627
17 and amendments
thereto;
18 (2) fail to
register as required by section 2 and amendments thereto
19 or to misrepresent that the telemarketer
is so registered;
20 (3) fail to
maintain a certificate of registration issued pursuant to
21 section 2 and amendments
thereto;
22 (4) include
any false or misleading information on an application for
23 registration pursuant to section 2 and
amendments thereto;
24 (5) fail to
maintain any records as required by section 3;
25 (6) represent
that registration as a telemarketer constitutes an en-
26 dorsement or approval by the state or a
state agency;
27 (7) obtain or
submit for payment a check, draft or other form of ne-
28 gotiable paper drawn on a person's
checking, savings or bankcard account
29 without the consumer's express written
authorization;
30 (8) procure
the services of any professional delivery, courier or other
31 pickup service to obtain immediate
receipt or possession of a consumer's
32 payment; unless the goods are delivered
with the opportunity to inspect
33 before any payment is collected;
34 (9) threaten,
intimidate or use profane or obscene language in a te-
35 lemarketing call;
36 (10) cause the
telephone to ring more than five times in an intended
37 telemarketing call;
38 (11) engage
any person repeatedly or continuously in a telemarketing
39 call with behavior a reasonable person
would deem to be annoying, abu-
40 sive or harassing;
41 (12) initiate
a telemarketing call to a person, when that person has
42 stated previously that the person does
not wish to receive calls from the
43 telemarketer;
5
1
(13) engage in telemarketing calls to a person's residence at
any time
2 other than between 8:00 a.m. and
9:00 p.m. local time, at the called per-
3 son's location; or
4
(14) engage in any other conduct in telemarketing calls that
would be
5 considered abusive to any
reasonable consumer.
6 (c) It
is an unconscionable act within the meaning of K.S.A.
50-627
7 and amendments thereto for any
person to:
8
(1) Assist, support or provide substantial assistance to any
telemar-
9 keter when the person knew or
should have known that the telemarketer
10 was engaged in an act or practice
described by subsection (b); or
11 (2) request or
receive payment in advance from a person, to recover
12 or otherwise aid in the return of money
or any other item lost by the
13 consumer in a prior telemarketing
transaction.
14 Sec.
5. K.S.A. 50-692 is hereby amended to read as follows:
50-692.
15 (a) As used in this section:
16 (1) "Prize" means
a gift, award or other item or service of value.
17 (2) "Prize
notice" means a notice given to an individual in this state
18 that satisfies all of the
following:
19 (A) Is or
contains a representation that the individual has been se-
20 lected or may be eligible to receive a
prize.; and
21 (B) conditions
receipt of a prize on a payment from the individual or
22 requires or invites the individual to make
a contact to learn how to receive
23 the prize or to obtain other information
related to the notice.
24 (3) "Solicitor"
means a person who represents to an individual that
25 the individual has been selected or may be
eligible to receive a prize.
26 (4) "Sponsor"
means a person on whose behalf a solicitor gives a prize
27 notice.
28 (5) "Verifiable
retail value" of a prize means:
29 (A) A price at
which the solicitor or sponsor can demonstrate that a
30 substantial number of the prizes have been
sold by a person other than
31 the solicitor or sponsor in the trade area
in which the prize notice is given.;
32 or
33 (B) if the
solicitor or sponsor is unable to satisfy paragraph (A), no
34 more than 1.5 times the amount the
solicitor or sponsor paid for the prize.
35 (b) If a
solicitor represents to an individual, by oral or written com-
36 munication, that the individual has been
selected or may be eligible to
37 receive a prize, the solicitor shall not
request, and the solicitor or sponsor
38 shall not accept, a payment from the
individual in any form and the so-
39 licitor shall not create the reasonable
impression that such payment is
40 required before the individual receives a
written prize notice that contains
41 all of the information required under
subsection (c)(1) presented in the
42 manner required under subsection (c)(2)
through (6).
43 (c) (1) A
written prize notice shall contain all of the following infor-
6
1 mation presented in the manner
required under paragraphs (1) through
2 (6):
3 (A) The
name and address of the solicitor and sponsor.
4 (B) The
description and verifiable retail value of each prize the
in-
5 dividual has been selected or may be
eligible to receive.
6 (C) The
actual number of each prize to be awarded.
7
(D) If the notice lists more than one prize that the
individual has
8 been selected or may be eligible to
receive, a statement of the odds the
9 individual has of receiving each
prize.
10 (D)
(E) Any requirement or invitation for the individual to
view, hear
11 or attend a sales presentation in order to
claim a prize, the approximate
12 length of the sales presentation and a
description of the property or serv-
13 ice that is the subject of the sales
presentation.
14 (E)
(F) Any requirement that the individual pay shipping or
handling
15 fees or any other charges to obtain or use
a prize.
16 (F)
(G) If a receipt or redemption of the prize is
subject to a any
17 condition or restriction, a
statement that a restriction applies
restrictions
18 and conditions apply, a description
of the restriction all restrictions and
19 conditions and a statement
containing the location in the notice where
20 the restriction is
restrictions and conditions are described.
21 (G)
(H) Any limitations on eligibility.
22 (2) (A) The
verifiable retail value and the statement of odds required
23 in a written prize notice under paragraphs
(1)(B) and (C) shall be stated
24 in immediate proximity to each listing of
the prize in each place the prize
25 appears on the written prize notice and
shall be in the same size and
26 boldness of type as the prize.
27 (B) The statement
of odds shall include, for each prize, the total num-
28 ber of prizes to be given away and the
total number of written prize
29 notices to be delivered. The number of
prizes and written prize notices
30 shall be stated in Arabic numerals. The
statement of odds shall be in the
31 following form: " (number
of prizes) out of ________ written
32 prize notices."
33 (C) The
verifiable retail value shall be in the following form: "veri-
34 fiable retail value: $________."
35 (3) If an
individual is required to pay shipping or handling fees or any
36 other charges to obtain or use a prize, the
following statement shall appear
37 in immediate proximity to each listing of
the prize in each place the prize
38 appears in the written prize notice and
shall be in not less than 10-point
39 boldface type: "YOU MUST PAY $________ IN
ORDER TO RE-
40 CEIVE OR USE THIS ITEM."
41 (4) The
information required in a written prize notice under para-
42 graph (1)(D) shall be on the first page of
the written prize notice in not
43 less than 10-point boldface type. The
information required under para-
7
1 graph (1)(F) and (G) shall be in not
less than 10-point boldface type.
2 (5) If a
written prize notice is given by a solicitor on behalf of a
3 sponsor, the name of the sponsor
shall be more prominently and con-
4 spicuously displayed than the name of
the promoter.
5 (6) A
solicitor or sponsor shall not do any of the following:
6 (A) Place
on an envelope containing a written prize notice any rep-
7 resentation that the person to whom
the envelope is addressed has been
8 selected or may be eligible to
receive a prize.
9 (B) Deliver
a written prize notice that contains language, or is de-
10 signed in a manner, that would lead a
reasonable person to believe that
11 it originates from a government agency,
public utility, insurance company,
12 consumer reporting agency, debt collector
or law firm unless the written
13 prize notice originates from that
source.
14 (C) Represent
directly or by implication that the number of individ-
15 uals eligible for the prize is limited or
that an individual has been selected
16 to receive a particular prize unless the
representation is true.
17 (d) If a prize
notice requires or invites an individual to view, hear or
18 attend a sales presentation in order to
claim a prize, the sales presentation
19 shall not begin until the solicitor does
all of the following:
20 (1) Informs the
individual of the prize, if any, that has been awarded
21 to the individual.
22 (2) If the
individual has been awarded a prize, delivers to the indi-
23 vidual the prize or the item selected by
the individual under subsection
24 (e) if the prize is not available.
25 (e) (1) A
solicitor who represents to an individual in a written prize
26 notice that the individual has been awarded
a prize shall provide the prize
27 to the individual unless the prize is not
available. If the prize is not avail-
28 able, the solicitor shall provide the
individual with any one of the following
29 items selected by the individual:
30 (A) Any other
prize listed in the written prize notice that is available
31 and that is of equal or greater value.
32 (B) The
verifiable retail value of the prize in the form of cash, a
33 money order or a certified check.
34 (C) A voucher,
certificate or other evidence of obligation stating that
35 the prize will be shipped to the individual
within 30 days at no cost to
36 the individual.
37 (2) If a voucher,
certificate of other evidence of obligation delivered
38 under paragraph (1)(C) is not honored
within 30 days, the solicitor shall
39 deliver to the individual the verifiable
retail value of the prize in the form
40 of cash, a money order or a certified
check. The sponsor shall make the
41 payment to the individual if the solicitor
fails to do so.
42 (f) Nothing in
this section shall be construed to permit an activity
43 otherwise prohibited by law.
8
1 (g) Any
violation of this section is an unconscionable act or practice
2 under the Kansas consumer protection
act.
3 (h) In
addition to any other remedies, a person suffering pecuniary
4 loss because of a violation by
another person of this section may bring an
5 action in any court of competent
jurisdiction and shall recover all of the
6 following:
7 (1) The
greater of $500 or twice the amount of the pecuniary loss.
8 (2) Costs
and reasonable attorney fees.
9 (i) The
provisions of this section shall not apply to the sale or pur-
10 chase, or solicitation or representation in
connection therewith, of goods
11 from a catalog or of books, recordings,
videocassettes, periodicals and
12 similar goods through a membership group or
club which is regulated by
13 the federal trade commission trade
regulation rule concerning use of neg-
14 ative option plans by sellers in commerce
or through a contractual plan
15 or arrangement such as a continuity plan,
subscription arrangement or a
16 single sale or purchase series arrangement
under which the seller ships
17 goods to a consumer who has consented in
advance to receive such goods
18 and the recipient of such goods is given
the opportunity, after examination
19 of the goods, to receive a full refund of
charges for the goods or unused
20 portion thereof, upon return of the goods
or unused portion thereof,
21 undamaged. A sponsor shall maintain, for
a period of 24 months after the
22 award of a prize, a record of the name
and last known address of the
23 prize recipient and the prize awarded
such recipient.
24 (j) This section
shall be part of and supplemental to the Kansas con-
25 sumer protection act.
26 Sec. 6. K.S.A. 50-672, 50-675
and 50-692 are hereby repealed.
27 Sec. 7. This act shall
take effect and be in force from and after its
28 publication in the statute book.