Chapter 052
2010 -- S 2621 SUBSTITUTE A
Enacted 06/12/10
A N A C T
RELATING TO BUSINESSES AND PROFESSIONS -- DISCOUNT BUYING CLUBS
Introduced
By: Senators Miller, Metts, Picard, Gallo,
and
Date Introduced: March 04, 2010
It is enacted by the
General Assembly as follows:
SECTION 1. Title 5 of the General Laws entitled
"BUSINESSES AND PROFESSIONS"
is hereby amended by adding thereto the following
chapter:
CHAPTER
85
DISCOUNT
BUYING CLUBS
5-85-1.
Definitions. – (a) “Discount buying club” means
any person, firm or corporation,
which, in exchange for valuable consideration, offers to
sell or to arrange the sale of goods or
services to its customers at prices represented to be lower
than are generally available.
(b) “Discount buying
club” shall not include any cooperative buying association or other
group in which no person is intended to profit or actually
profits beyond the benefit that all
members receive from buying at a discount; nor shall any
person, firm or corporation be deemed
a “discount buying club” solely by virtue of the fact
that:
(1) For fifty dollars
($50.00) or less it sells tickets or coupons valid for use in obtaining
goods or services from a retail merchant; or
(2) As a service
collateral to its principal business, and for no additional charge, it
arranges for its members or customers to purchase or lease
directly from particular merchants at a
specified discount.
(c) "Discount
buying club" shall not include any person, firm or corporation who charges
an advance month by month fee for access to service, or
member benefits, and allows the buyer to
terminate membership by notifying the person, firm or
corporation of intent to terminate
membership without further obligation to make additional
payments.
5-85-2.
Contract requirements. – (a) Every
contract between a discount buying club
and its customers shall be in writing, completely filled
out, dated and signed by all contracting
parties. A copy of the completed contract shall be given to
the buyer at the time he or she signs it.
The contract shall, in clear, conspicuous and simple
language:
(1) State the
duration of the contract in a definite period of years or months. If the
contract may be periodically renewed, the contract shall state
specifically the terms under which
it may be renewed and the amount of any renewal fees
must be stated unless the contract meets
the requirements of subsection (b) of this section.
(2) Contain, immediately
above the customer’s signature in boldface type of not less than
a ten (10) point size, a statement substantially as
follows: “You, the customer, may cancel this
contract at any time prior to midnight of the third (3rd)
business day after the date of this contract.
To cancel you must notify the company in writing of
your intent to cancel.”
(3) List the
categories of goods and services the buying club contracts to make available.
(4) State the
procedures by which the customer can select, order and
pay for merchandise
or services and provide information regarding estimated
delivery dates and the manner of
delivery of products; and
(5) State the
discount buying club’s obligations with respect to warranties on goods or
services ordered.
(b) The written
contract required by subsection (a) above need not be signed or dated by
the customer if one of the following requirements are
met:
(1) The total
consideration paid by each member or customer does not exceed a one-time
or annual fee of one hundred fifty dollars ($150) or
less; or
(2) The member or
customer has the unconditional right to cancel the contract at any time
and receive within ten (10) days a full refund of the
one-time membership fee, or the annual
membership fee covering the current membership period, whichever
the case may be.
5-85-3. Customer’s
right to cancel. – Each contract for a discount buying club
membership shall provide that such contract may be cancelled at
anytime up until midnight of the
third (3rd) business day after the date of receipt by the
buyer of a copy of the written contract, by
written notice, delivered by certified or registered
which shall be specified in the contract. For purposes of
this chapter, business days exclude
Sundays, and any holiday on which
regular mail deliveries are not made.
5-85-4. Prohibited
acts. – Discount buying clubs shall not:
(1) Discourage or refuse
to allow a potential customer to inspect any of their current
merchandise catalogs and price lists during the formal
prescheduled information session at their
place of business.
(2) Refuse to refund
or exchange a good that does not conform to the customer’s order.
5-85-5.
Violations. – A violation of any of the
provisions in this chapter shall constitute
an unfair or deceptive act or practice as defined in
chapters 6-13 and 6-13.1.
SECTION 2. This act shall take effect upon passage.
=======
LC02097/SUB A/2
=======