Commerce, Consumer Protection

Section R152-11-9

Direct Solicitations

Notice of Proposed Rule

(Amendment)

DAR File No.: 34100
Filed: 09/20/2010 03:54:43 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to provide a concrete definition of "business day" as it pertains to direct solicitations.

Summary of the rule or change:

Business day is defined as any calendar day except Saturday, Sunday, or any federal or state holiday.

State statutory or constitutional authorization for this rule:

• Section 13-2-5
• Section 63G-4-3
• Section 13-11

Anticipated cost or savings to:

the state budget:

The state budget will not be affected by defining what constitutes a business day. This amendment will not change the manner in which the Division enforces this administrative rule. It simply offers Division investigators and businesses engaged in direct solicitations more defined parameters concerning rescission of transactions.

local governments:

Local government will not be affected by defining what constitutes a business day in connection with direct solicitations, as local government is not statutorily charged with enforcing these rules nor subject to its enforcement.

small businesses:

Defining what constitutes a business day will likely save costs for small businesses that engage in direct solicitations by eliminating a common basis for dispute when consumers attempt to rescind transactions.

persons other than small businesses, businesses, or local governmental entities:

Defining what constitutes a business day will likely save costs for persons that engage in direct solicitations by eliminating a common basis for dispute when consumers attempt to rescind transactions.

Compliance costs for affected persons:

Defining what constitutes a business day will likely save compliance costs for affected persons that engage in direct solicitations by eliminating a common basis for dispute when consumers attempt to rescind transactions.

Comments by the department head on the fiscal impact the rule may have on businesses:

No fiscal impact to businesses is anticipated from this filing which clarifies what constitutes a "business day" as that phrase is used in the rule.

Francine Giani, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Commerce
Consumer Protection
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Angela Hendricks at the above address, by phone at 801-530-6035, by FAX at 801-538-6001, or by Internet E-mail at ahendricks@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

11/15/2010

This rule may become effective on:

11/22/2010

Authorized by:

Traci Gunderson, Director

R152. Commerce, Consumer Protection.

R152-11. Utah Consumer Sales Practices Act.

R152-11-9. Direct Solicitations.

A. It shall be a deceptive act or practice in connection with a consumer transaction involving any direct solicitation sale for a supplier to do any of the following:

(1) Solicit a sale without clearly, affirmatively, and expressly revealing at the time the seller initially contacts the consumer or prospective consumer, and before making any other statements or asking any questions, except for a greeting: the name of the seller, the name or trade name of the company, corporation or partnership the seller represents, and stating in general terms the nature of the consumer commodities the seller wishes to show or demonstrate.

(2) Represent that the consumer or prospective consumer will receive a discount, rebate, or other benefit for permitting his home or other property, real or personal, to be used as a so-called "model home" or "model property" for demonstration or advertising purposes when such, in fact, is not true;

(3) Represent that the consumer or prospective consumer has been specially selected to receive a bargain, discount, or other advantage when such, in fact, is not true;

(4) Represent that the consumer or prospective consumer is a winner of a contest when such, in fact, is not true;

(5) Represent that the consumer commodities that are being offered for sale cannot be purchased in any place of business, but only through direct solicitation, when such, in fact, is not true;

(6) Represent that the salesman representative, or agent has authority to negotiate the final terms of a consumer transaction when such, in fact, is not true;

(7) Sell, lease, or rent consumer goods or services with a purchase price of $25 or more and fail to furnish the buyer with a fully completed receipt or copy of any contract pertaining to such sale at the time of its execution which is in the same language (e.g. Spanish) as that principally used in the oral sales presentation and which shows the date of the transaction and the name and address of the seller.

(8) Except as otherwise provided in the "Home Solicitations Sales Act", Section 70C-5-102(5) and or the "Telephone Fraud Prevention Act", Section 13-26-5, to fail to provide a notice of the buyer's right to cancel within three (3) business days at the time of purchase if the total of the sale exceeds $25, unless the supplier's cancellation policy is communicated to the buyer and the policy offers greater rights to the buyer than three days, which notice shall be in conspicuous statement written in dark bold at least 12 point type on the front page of the purchase documentation, and shall read as follows: "You, the Buyer, May Cancel This Transaction At Any Time Prior to Midnight of the Third Business Day (or Time Period Reflecting the Supplier's Cancellation Policy But Not Less Than Three Business Days) After the Date of This Transaction or Receipt of The Product, Whichever is Later."

(a) Paragraph (8) shall not apply to "fixture" solicitation sales where the supplier:

(i) automatically provides the buyer a right to cancel within three (3) or more business days from the time of purchase; or

(ii) automatically provides a refund for return of goods within three (3) or more business days from the time of purchase, but prior to installation as a fixture; or

(iii) supplies merchandise to a buyer without prior full payment and allows the buyer three (3) or more business days from the time of receipt of the merchandise, but prior to installation as a fixture to cancel the order and return the merchandise; or

(iv) discloses its refund/return policy in its advertising, catalog and contract, and that policy provides for a return of merchandise within a period of three (3) or more business days from the time of purchase, but prior to installation as a fixture or that policy indicates no return or refund will be offered or made on special merchandise (such as uniquely sized items, custom made or special ordered items); or

(9) Fail or refuse to honor any valid notice of cancellation by a consumer and within 30 calendar days after the receipt of such notice, to: (i) refund all payments made under the contract or sale; (ii) return any goods or property traded in, in substantially as good condition as when received by the supplier; (iii) cancel and return any negotiable instrument executed by the buyer in connection with the contract or sale and take any action necessary or appropriate to terminate promptly any security interest created in the transaction.

B. "Direct Solicitation" means solicitation of a consumer transaction initiated by a supplier, at the residence or place of employment of any consumer, and includes a sale or solicitation of sale made by the supplier by direct mail or telephone or personal contact at the residence or place of employment of any consumer. In the case of a subscription or club membership (e.g., tape, book, or record club) solicitation, "direct solicitation" means solicitation of the initial consumer transaction pursuant to a subscription or club membership agreement, made by the supplier at the residence or place of employment of any consumer, and includes a solicitation of an initial sale made by the supplier by direct mail or telephone or personal contact at the residence or place of employment of any consumer, but excludes all subsequent consumer transactions which are provided for in the subscription or club membership agreement.

C. "Time of Purchase" is defined as the day on which the buyer signs an agreement or accepts an offer to purchase consumer goods or services where the total of the sale is $25 or more.

D. Except for direct solicitations subject to Section 13-26-5, for the purposes of this rule "business day" does not include Saturday, Sunday, or a federal or state holiday.

 

KEY: advertising, bait and switch, consumer protection, negative options

Date of Enactment or Last Substantive Amendment: [ February 8 ], 2010

Notice of Continuation: February 1, 2007

Authorizing, and Implemented or Interpreted Law: 63G-3-201; 13-2-5; 13-11