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IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2000

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5-61-2. Definitions -- As used in this chapter:

(1) "Department" means the department of attorney general.

(2) "Item" means any goods and services and includes coupon books which are to be used with businesses other than the seller's business.

(3) "Owner" means a person who owns or controls ten percent (10%) or more of the equity of, or otherwise has claim to ten percent (10%) or more of the net income of, a telephonic seller.

(4) "Person" includes an individual, firm, association, corporation, partnership, joint venture, or any other business entity.

(5) "Principal" means an owner, an executive officer of a corporation, a general partner of a partnership, a sole proprietor of a sole proprietorship, a trustee of a trust or any other individual with similar supervisory functions with respect to any person.

(6) "Purchaser" or "prospective purchaser" means a person who is solicited to become or does become obligated to a telephonic seller.

(7) "Salesperson" means any individual employed, appointed or authorized by a telephonic seller, whether referred to by the telephonic seller as an agent, representative, or independent contractor who attempts to solicit or solicits a sale on behalf of the telephonic seller. The principals of a seller are themselves salespersons if they solicit sales on behalf of the telephonic seller.

(8) "Telephonic seller" or "seller" means a person who, on his or her own behalf or through salespersons or through the use of an automatic dialing-announcing device, causes a telephone solicitation or attempted telephone solicitation to occur which meets the criteria specified as follows:

(i) A telephone solicitation or attempted telephone solicitation where the telephonic seller initiates or engages in telephonic contact with a prospective purchaser and represents or implies one or more of the following:

(A) That a prospective purchaser who buys one or more items will also receive additional or other items, whether or not of the same type as purchased, without "further cost". For the purposes of this subdivision, "further cost" does not include actual postage or common carrier delivery charges, if any;

(B) That a prospective purchaser will receive a prize or gift, if the person also encourages the prospective purchaser to purchase or rent any goods or services or pay any money, including, but not limited to, a delivery or handling charge;

(C) That a prospective purchaser who buys office equipment or supplies will, because of some unusual event or imminent price increase, be able to buy these items at prices which are below those that are usually charged or will be charged for the items;

(D) That the seller is a person other than the person he or she is;

(E) That the items for sale are manufactured or supplied by a person other than the actual manufacturer or supplier;

(F) That the seller is offering to sell the prospective purchaser any gold, silver, or other minerals, or any interest in oil, gas, or mineral field, wells, or exploration sites.

(ii) Solicitation or attempted solicitation which is made by telephone in response to inquiries generated by advertisements or other form of mail or any types of unrequested mailing or advertisement sent by the seller which requires a consumer to respond telephonically for further information where it is revealed that the seller is offering to sell to the prospective purchaser on behalf of the telephonic seller where it is represented or implied that the seller is offering to sell to the prospective purchaser any gold, silver, or other metals, diamonds, rubies, sapphires, or other stones, coal or other minerals, or any interest in oil, gas, or mineral fields, wells, or exploration sites; or that the seller is offering to sell any goods or services not specifically exempted in subsection (10).

(9) "Hours of operation" means Monday through Friday, except a state or federal holiday, nine o'clock (9:00 am) to six o'clock (6:00 pm), Saturday ten o'clock (10:00 am) to five o'clock (5:00 pm).

(10) For purposes of this section, "telephonic seller" or "seller" does not include any of the following:

(i) A person selling a security which has been qualified for sale by the director of business regulation pursuant to section 7-11-301 et seq., or which is exempt under section 7-11-401 et seq. from the necessity to qualify.

(ii) A person licensed pursuant to section 5-20.5-6 when the solicited transaction is governed by that law.

(iii) A person licensed pursuant to chapter 1.1 of title 7, when the solicited transaction is governed by that law.

(iv) A person soliciting the sale of a franchise which is registered pursuant to section 19-28.1-5, or is exempt under section 19-28.1-6 from the necessity of registering.

(v) A person primarily soliciting the sale of a newspaper of general circulation, as defined in section 9-19.1-1, a magazine or periodical, or contractual plans, including book and record clubs, (A) under which the seller provides the consumer with a form which the consumer may use to instruct the seller not to ship the offered merchandise, and which is regulated by the federal trade commission trade regulation rule concerning "Use of Negative Option Plans by Sellers in Commerce," or (B) not covered under subdivision (A), such as continuity plans, subscription arrangements, standing order arrangements, supplements, and series arrangements under which the seller periodically ships merchandise to a consumer who has consented in advance to receive the merchandise on a periodic basis.

(vi) A person soliciting business from prospective purchasers who have previously purchased from the person making the solicitation or the business enterprise for which the person is calling.

(vii) Any supervised financial institution or parent, subsidiary, or affiliate. As used in this paragraph, "supervised financial institution" means any commercial bank, trust company, savings and loan association, credit union, industrial loan company, personal property broker, consumer finance lender, commercial finance lender, or insurer; provided, that the institution is subject to supervision by an official or agency of this state or of the United States.

(viii) A person soliciting the sale of services provided by a cable television system licensed or franchised pursuant to chapter 19 of title 39.

(ix) A person or affiliate of a person whose business is regulated by the public utilities commission.

(x) A person soliciting the sale of a farm product, as defined in section 43-3-18, if the solicitation neither intends to, nor actually results in, a sale which costs the purchaser in excess of one hundred dollars ($100).

(xi) An issuer or subsidiary of an issuer that has a class of securities which is subject to section 12 of the Securities Exchange Act of 1934 (15 USC section 78l) and which is either registered or exempt from registration under paragraphs (A), (B), (C), (E), (F), (G), or (H) of subsection (g) of that section.

(xii) A person soliciting sales which are exempted under section 6-13-5 (Unfair Sales Practices) or section 6-13.1-4 (Deceptive Trade Practices).

(xiii) A person soliciting exclusively the sale of telephone answering services to be provided by that person or that person's employer.

(11) "Automatic dialing-announcing device" means a device that selects and dials telephone numbers and that, working along or in conjunction with other equipment, disseminates a prerecorded or synthesized voice message to the telephone numbers called.

(12) "Subscriber" means a person who has subscribed to telephone service from a telephone company or the other persons living or residing with the subscribing person.

5-61-3. Registration -- (a) Not less than ten (10) days prior to doing business in this state, a telephone sales solicitation operation or telephonic seller registers with the department by filing with the consumer protection division of the department the information required by section 5-61-4 and a filing fee of one hundred dollars ($100). A seller is deemed to do business in this state if the seller solicits prospective purchasers from locations in this state or solicits prospective purchasers who are located in this state. The information required by section 5-61-4 is submitted on a form provided by the attorney general. The information is verified by a declaration signed by each principal of the telephone sales solicitation operation under penalty of perjury. The declaration specifies the date and location of signing. Information submitted pursuant to subdivision (10) or (11) of section 5-61-4 is clearly identified and appended to the filing.

(b) Registration of a telephone sales solicitation business is valid for one year from its effective date and may be annually renewed by making the filing required by section 5-61-4 and paying a filing fee of one hundred dollars ($100), which is deposited into the general fund as general revenue.

(c) Whenever, prior to expiration of a seller's annual registration, there is a material change in the information required by section 5-61-4, the seller, within ten (10) days, files an addendum updating the information with the consumer protection division of the department. However, changes in salespersons soliciting on behalf of the seller are updated by addendums filed, if necessary, in quarterly intervals computed from the effective date of registration.

(d) Upon receipt of a filing and filing fee pursuant to subdivision (a) or (b), the department sends the telephonic seller a written confirmation of receipt of the filing no later than ten (10) business days. If the seller has more than one business location, the written confirmation is sent to the principal business location identified in the seller's filing and the seller may make copies so that the seller has one for each business location. The seller posts the confirmation of receipt of filing, within ten (10) days of receipt, in a conspicuous place at each of the seller's business locations. The seller does not commence any telephone solicitations until the time that the written confirmation is received.

(e) The consumer protection division of the department of attorney general may delay, reject, or revoke a registration upon review of the information contained in the filing of the registration form, or as a result of information relating to the conduct of the business operation.

SECTION 2. This act shall take effect upon passage.

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LC00364
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF

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This act would require performance bonds to be posted by telephonic sellers.

This act would take effect upon passage.