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H.B. 45

             1     

TELEPHONE SOLICITATION REGULATION

             2     
2000 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Evan L. Olsen

             5      AN ACT RELATING TO CONSUMER PROTECTION; RECODIFYING AND AMENDING
             6      THE PROVISIONS OF THE TELEPHONE AND FACSIMILE SOLICITATION ACT AND THE
             7      TELEPHONE FRAUD PREVENTION ACT; CREATING A STATE-RUN "DO NOT CALL
             8      LIST"; PROVIDING FOR ADMINISTRATIVE, CIVIL, AND CRIMINAL PENALTIES; AND
             9      PROVIDING A PRIVATE RIGHT OF ACTION.
             10      This act affects sections of Utah Code Annotated 1953 as follows:
             11      AMENDS:
             12          54-8b-18, as enacted by Chapter 113, Laws of Utah 1999
             13      ENACTS:
             14          13-26a-101, Utah Code Annotated 1953
             15          13-26a-102, Utah Code Annotated 1953
             16          13-26a-103, Utah Code Annotated 1953
             17          13-26a-104, Utah Code Annotated 1953
             18          13-26a-105, Utah Code Annotated 1953
             19          13-26a-106, Utah Code Annotated 1953
             20          13-26a-107, Utah Code Annotated 1953
             21          13-26a-108, Utah Code Annotated 1953
             22          13-26a-109, Utah Code Annotated 1953
             23          13-26a-110, Utah Code Annotated 1953
             24          13-26a-111, Utah Code Annotated 1953
             25          13-26a-112, Utah Code Annotated 1953
             26          13-26a-113, Utah Code Annotated 1953
             27          13-26a-114, Utah Code Annotated 1953


             28      REPEALS:
             29          13-25a-101, as enacted by Chapter 26, Laws of Utah 1996
             30          13-25a-102, as last amended by Chapter 77, Laws of Utah 1998
             31          13-25a-103, as last amended by Chapter 77, Laws of Utah 1998
             32          13-25a-104, as enacted by Chapter 26, Laws of Utah 1996
             33          13-25a-105, as enacted by Chapter 26, Laws of Utah 1996
             34          13-25a-106, as enacted by Chapter 26, Laws of Utah 1996
             35          13-25a-107, as enacted by Chapter 26, Laws of Utah 1996
             36          13-26-1, as enacted by Chapter 154, Laws of Utah 1990
             37          13-26-2, as last amended by Chapter 92, Laws of Utah 1997
             38          13-26-3, as last amended by Chapter 124, Laws of Utah 1999
             39          13-26-4, as last amended by Chapter 170, Laws of Utah 1996
             40          13-26-5, as last amended by Chapter 189, Laws of Utah 1994
             41          13-26-8, as last amended by Chapter 26, Laws of Utah 1995
             42          13-26-10, as enacted by Chapter 184, Laws of Utah 1991
             43          13-26-11, as last amended by Chapter 77, Laws of Utah 1998
             44      Be it enacted by the Legislature of the state of Utah:
             45          Section 1. Section 13-26a-101 is enacted to read:
             46     
CHAPTER 26a. TELECOMMUNICATIONS SOLICITATION ACT

             47          13-26a-101. Title.
             48          This chapter is known as the "Telecommunications Solicitation Act."
             49          Section 2. Section 13-26a-102 is enacted to read:
             50          13-26a-102. Definitions.
             51          As used in this chapter:
             52          (1) "Advertisement" means material offering for sale, or advertising the availability or
             53      quality of, any property, goods, or services.
             54          (2) (a) "Automated telephone dialing system" means equipment used to:
             55          (i) store or produce telephone numbers;
             56          (ii) call a stored or produced number; and
             57          (iii) connect the number called with a recorded message or artificial voice.
             58          (b) "Automated telephone dialing system" does not include equipment used with a burglar


             59      alarm system, voice messaging system, fire alarm system, or other system used in an emergency
             60      involving the immediate health or safety of a person.
             61          (3) "Continuity plan" means a shipment, with the prior express consent of the buyer, at
             62      regular intervals of similar special-interest products. A continuity plan is distinguished from a
             63      subscription arrangement by the absence of a binding commitment period or purchase amount.
             64          (4) "Division" means the Division of Consumer Protection.
             65          (5) "Do not call list" means the registry maintained by the division under Section
             66      13-26a-105 .
             67          (6) "Email" means the process or act of:
             68          (a) scanning or encoding text or images for conversion into electronic signals for
             69      transmission; or
             70          (b) receiving electronic signals and reproducing them as a duplicate of the original text or
             71      image.
             72          (7) "Established business relationship" means a relationship that:
             73          (a) is based on inquiry, application, purchase, or transaction regarding products or services
             74      offered;
             75          (b) is formed by a voluntary two-way communication between a person making a
             76      telephone solicitation and a person to whom a telephone solicitation is made; and
             77          (c) has not been terminated by either party.
             78          (8) "Facsimile machine" means equipment used for:
             79          (a) scanning or encoding text or images for conversion into electronic signals for
             80      transmission; or
             81          (b) receiving electronic signals and reproducing them as a duplicate of the original text or
             82      image.
             83          (9) "Fictitious personal name" means a name other than an individual's legal name.
             84          (10) "Material statement" or "material fact" means information that a person of ordinary
             85      intelligence or prudence would consider important in deciding whether or not to accept an offer
             86      extended through a telephone solicitation.
             87          (11) "Negative response" means a statement from a party stating the party does not wish
             88      to listen to the sales presentation or participate in the solicitation presented in the telephone call.
             89          (12) "Premium" means a gift, bonus, prize, award, certificate, or other document by which


             90      a prospective purchaser is given a right, chance, or privilege to purchase or receive goods or
             91      services as an inducement to a prospective purchaser to purchase other goods or services.
             92          (13) "Telephone call" means a voice, written, or other message of communication
             93      facilitated and accomplished by means of electronic transmission, including calls made by use of
             94      an automated telephone dialing system, facsimile or email.
             95          (14) (a) "Telephone solicitation", "sale," "selling," or "solicitation of sale", whether
             96      directed to a residence or business, means the initiation of a telephone call or message, including
             97      calls made by use of an automated telephone dialing system, facsimile, or email:
             98          (i) for the purpose of:
             99          (A) encouraging the purchase or rental of, or investment in, property, goods, or services,
             100      tangible or intangible;
             101          (B) soliciting a sale of or extension of credit for property or services to the person called;
             102          (C) soliciting information that will be used for:
             103          (I) the direct solicitation of a sale of property or services to the person called; or
             104          (II) an extension of credit to the person called for a sale of property or services; or
             105          (D) soliciting a charitable donation involving the exchange of any premium, prize, gift,
             106      ticket, subscription, or other benefit in connection with any appeal made for a charitable purpose;
             107      and
             108          (ii) in which:
             109          (A) (I) the seller solicits the sale over the telephone;
             110          (II) the purchaser's agreement to purchase is made over the telephone; and
             111          (III) the purchaser, over the telephone, pays for or agrees to commit to payment for goods
             112      or services prior to or upon receipt by the purchaser of the goods or services;
             113          (B) the solicitor, not exempt under this chapter, induces a prospective purchaser over the
             114      telephone, to make and keep an appointment that directly results in the purchase of goods or
             115      services by the purchaser that would not have occurred without the telephone solicitation by the
             116      solicitor;
             117          (C) the seller offers or promises a premium to a prospective purchaser if:
             118          (I) the seller induces the prospective purchaser to initiate a telephone contact with the
             119      telephone soliciting business; and
             120          (II) the resulting solicitation meets the requirements of Subsection (14)(a)(i); or


             121          (D) the solicitor solicits a charitable donation involving the exchange of any premium,
             122      prize, gift, ticket, subscription, or other benefit in connection with any appeal made for a charitable
             123      purpose by an organization that is not otherwise exempt under this chapter.
             124          (b) A solicitation of sale or telephone solicitation is considered complete when made,
             125      whether or not the person receiving the solicitation agrees to the sale or to make a charitable
             126      donation.
             127          (15) "Telephone soliciting business" means a sole proprietorship, partnership, limited
             128      liability company, corporation, or other association of individuals engaged in a common effort to
             129      solicit sales regulated under this chapter.
             130          (16) "Telephone solicitor" or "solicitor" means any natural person, firm, organization,
             131      partnership, association, limited liability company, corporation, or other entity that makes, places,
             132      or receives telephone calls, including calls made by use of an automated telephone dialing system,
             133      facsimile, or email, for the purpose of selling or solicitation of sales as defined in Subsection (14),
             134      whether the calls originate in Utah or are received in Utah.
             135          (17) "Unsolicited telephone call" means a telephone call, including calls made by use of
             136      an automated telephone dialing system, facsimile, or email, for a commercial purpose or to seek
             137      a financial donation other than a call made:
             138          (a) in response to an express request of the person called;
             139          (b) primarily in connection with an existing debt or contract, payment or performance of
             140      which has not been completed at the time of the call; or
             141          (c) to any person with whom the telephone solicitor has an existing business relationship.
             142          Section 3. Section 13-26a-103 is enacted to read:
             143          13-26a-103. Registration and bond required -- Subscription to do not call list.
             144          (1) (a) Each telephone soliciting business engaging in telephone solicitation or sales in this
             145      state shall register annually with the division prior to doing or continuing to do business in this
             146      state.
             147          (b) The registration form shall designate an agent residing in this state who is authorized
             148      by the telephone soliciting business to receive service of process in any action brought by this state
             149      or a resident of this state.
             150          (c) If a telephone soliciting business fails to designate an agent to receive service or fails
             151      to appoint a successor to the agent, the business' application for an initial or renewal registration


             152      shall be denied, and any current registration shall be suspended until an agent is designated.
             153          (2) The division may impose an annual registration fee set pursuant to Section 63-38-3.2 .
             154          (3) (a) Each telephone soliciting business engaging in telephone solicitation or sales in this
             155      state shall obtain and maintain the following security:
             156          (i) a performance bond issued by a surety authorized to transact surety business in this
             157      state;
             158          (ii) an irrevocable letter of credit issued by a financial institution authorized to do business
             159      in this state; or
             160          (iii) a certificate of deposit held in this state in a depository institution regulated by the
             161      Department of Financial Institutions.
             162          (b) The bond, letter of credit, or certificate of deposit shall be payable to the division for
             163      the benefit of any consumer who incurs damages as the result of any telephone solicitation or sales
             164      violation of this chapter.
             165          (c) The division may recover from the bond, letter of credit, or certificate of deposit
             166      investigative costs, attorneys' fees, and other costs of collecting and distributing funds under this
             167      section and the costs of promoting consumer education, but only if the consumer has first
             168      recovered full damages.
             169          (d) A telephone soliciting business shall keep a bond, certificate of deposit, or letter of
             170      credit in force for one year after it notifies the division in writing that it has ceased all activities
             171      regulated by this chapter.
             172          (e) The amount to be posted in the form of a bond, irrevocable letter of credit, or certificate
             173      of deposit shall be set at a reasonable level in relation to the individual circumstances of the
             174      telephone soliciting business by the director of the division and shall not exceed:
             175          (i) $50,000 if neither the telephone soliciting business nor any affiliated person has been
             176      found in an administrative, civil, or criminal proceeding to have violated this chapter within three
             177      years of the date of application; or
             178          (ii) $75,000 if the telephone soliciting business or any affiliated person has been found in
             179      an administrative, civil, or criminal proceeding to have violated this chapter within three years of
             180      the date of application.
             181          (f) For purposes of Subsection (3)(e) an "affiliated person" means a current contractor,
             182      director, employee, officer, owner, or partner of the telephone soliciting business.


             183          (4) The division may establish by rule the registration requirements for telephone soliciting
             184      businesses in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
             185          (5) Each telephone solicitation business registered under this section shall maintain a
             186      current subscription to the do not call list created in Section 13-26a-105 .
             187          (6) The division director may revoke a registration under this section for any violation of
             188      this chapter.
             189          (7) An administrative proceeding conducted by the division under this chapter shall
             190      comply with the requirements of Title 63, Chapter 46b, Administrative Procedures Act.
             191          Section 4. Section 13-26a-104 is enacted to read:
             192          13-26a-104. Exemptions from registration.
             193          (1) The following, while subject to all other sections of this chapter, are exempt from the
             194      registration and bonding requirements of Section 13-26a-103 :
             195          (a) a broker, agent, dealer, or sales professional licensed under the licensure laws of this
             196      state, when soliciting sales within the scope of his license;
             197          (b) the solicitation of sales by:
             198          (i) a public utility that is regulated under Title 54, Public Utilities, or by an affiliate of the
             199      utility;
             200          (ii) a newspaper of general circulation;
             201          (iii) a solicitation of sales made by a broadcaster licensed by any state or federal authority;
             202      or
             203          (iv) a nonprofit organization if no part of the net earnings from the sale inures to the
             204      benefit of any member, officer, trustee, or serving board member of the organization, or individual,
             205      or family member of an individual, holding a position of authority or trust in the organization;
             206          (c) the solicitation of any depository institution as defined in Section 7-1-103 , a subsidiary
             207      of a depository institution, personal property broker, securities broker, investment adviser,
             208      consumer finance lender, or insurer subject to regulation by an official agency of this state or the
             209      United States;
             210          (d) the solicitation of a contract for the maintenance or repair of goods previously
             211      purchased from the person:
             212          (i) who is making the solicitation; or
             213          (ii) on whose behalf the solicitation is made;


             214          (e) the solicitation of previous customers of the business on whose behalf the call is made
             215      if the person making the call:
             216          (i) does not offer any premium in conjunction with a sale or offer;
             217          (ii) is not selling an investment or an opportunity for an investment that is not registered
             218      with any state or federal authority; and
             219          (iii) is not regularly engaged in telephone sales;
             220          (f) the solicitation of a sale that is an isolated transaction and not done in the course of a
             221      pattern of repeated transactions of a like nature;
             222          (g) the solicitation of a person by a retail business establishment that has been in operation
             223      for at least five years in Utah under the same name as that used in connection with telemarketing
             224      if both of the following occur on a continuing basis:
             225          (i) products are displayed and offered for sale at the place of business, or services are
             226      offered for sale and provided at the place of business; and
             227          (ii) a majority of the seller's business involves the buyer obtaining the products or services
             228      at the seller's place of business; and
             229          (h) a telephone marketing service company that provides telemarketing sales services
             230      under contract to sellers if:
             231          (i) it has been doing business regularly with customers in Utah for at least five years under
             232      the same business name and with its principal office in the same location;
             233          (ii) at least 75% of its contracts are performed on behalf of persons exempted from
             234      registration under this chapter; and
             235          (iii) neither the company nor its principals have been enjoined from doing business or
             236      subjected to criminal actions for their business activities in this or any other state.
             237          (2) The person claiming an exemption under this section has the burden of proving that
             238      the person is entitled to the exemption.
             239          Section 5. Section 13-26a-105 is enacted to read:
             240          13-26a-105. Do not call list.
             241          (1) The division shall:
             242          (a) no later than July 1, 2000, establish and thereafter maintain a registry of telephone
             243      numbers of persons who do not wish to receive telephone solicitations;
             244          (b) update the do not call list at least once every three months;


             245          (c) make rules pursuant to Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             246      to establish the methods by which telephone numbers can be added to and deleted from the do not
             247      call list; and
             248          (d) promote and publicize the do not call list as appropriate.
             249          (2) No fee shall be charged to add or remove any telephone number on the do not call list.
             250          (3) If, pursuant to 47 U.S.C. Section 227(c)(3), the Federal Communications Commission
             251      establishes a single national registry of telephone numbers of subscribers who do not wish to
             252      receive telephone solicitations, the division shall include in the do not call list that part of the
             253      national registry that relates to this state.
             254          (4) (a) Upon request, the division shall make updated copies of the do not call list available
             255      for a yearly subscription fee of $500.
             256          (b) The yearly subscription fee shall be waived if:
             257          (i) the organization requesting the do not call list is exempt from taxation under section
             258      501(c)(3) or section 501(c)(6) of the Internal Revenue Code; or
             259          (ii) payment of the subscription fee would unduly burden, as defined by rule by the
             260      division, the ability of the person requesting the do not call list to conduct business or otherwise
             261      operate within this state.
             262          Section 6. Section 13-26a-106 is enacted to read:
             263          13-26a-106. Prohibited conduct for telephone solicitations.
             264          (1) It is unlawful for any person:
             265          (a) to solicit prospective purchasers on behalf of a telephone soliciting business that is not
             266      registered with the division or exempt from registration under this chapter;
             267          (b) to use a fictitious personal name in connection with a telephone solicitation;
             268          (c) to make or cause to be made any untrue material statement, or fail to disclose a material
             269      fact necessary to make any statement made not misleading, whether in connection with a telephone
             270      solicitation or a filing with the division;
             271          (d) to make or authorize the making of any misrepresentation about its compliance with
             272      this chapter to any prospective or actual purchaser;
             273          (e) to fail to refund within 30 days any amount due a purchaser who exercises the right to
             274      cancel under Section 13-26a-110 ;
             275          (f) to make a telephone solicitation to a residential or business telephone before 9 a.m. or


             276      after 8 p.m. local time unless prior express consent is given to call at a different time;
             277          (g) to make, or knowingly allow to be made, a telephone solicitation to any telephone
             278      number that is included on the most recent version of the do not call list which is available to the
             279      public at the time of the solicitation;
             280          (h) to fail to advise a purchaser at the time any solicitation is made of the purchaser's right
             281      to cancel the sale under Section 13-26a-110 ; or
             282          (i) to use the do not call list for any purpose other than to comply with the provision of this
             283      chapter.
             284          (2) It is unlawful for any telephone soliciting business whether required to be registered
             285      under this chapter or exempt from registration:
             286          (a) to cause or permit any solicitor to violate any provision of this chapter; or
             287          (b) to use inmates in telephone soliciting operations where inmates have access to personal
             288      data about an individual sufficient to physically locate or contact that individual, such as names,
             289      addresses, telephone numbers, Social Security numbers, credit card information, or physical
             290      descriptions.
             291          (3) Any telephone solicitor who makes an unsolicited telephone call to a telephone number
             292      shall:
             293          (a) identify themselves;
             294          (b) identify the business on whose behalf the person is soliciting;
             295          (c) identify the purpose of the call promptly upon making contact by telephone with the
             296      person who is the object of the telephone solicitation;
             297          (d) discontinue the solicitation if the person being solicited gives a negative response at
             298      any time during the telephone call; and
             299          (e) hang up the phone, or in the case of an automated telephone dialing system operator,
             300      disconnect the automated telephone dialing system from the telephone line within 25 seconds of
             301      the termination of the call by the person being called.
             302          (4) A telephone solicitor may not withhold the display of the telephone solicitor's
             303      telephone number from a caller identification service when that number is being used for
             304      telemarketing purposes and when the telephone solicitor's service or equipment is capable of
             305      allowing the display of the number.
             306          (5) A person may not make or authorize a telephone solicitation in violation of Title 47


             307      U.S.C. 227 or other applicable state or federal law.
             308          Section 7. Section 13-26a-107 is enacted to read:
             309          13-26a-107. Prohibited conduct for automated telephone dialing system solicitations.
             310          (1) Except as provided in Subsection (2), a person may not operate or authorize the
             311      operation of an automated telephone dialing system to make a telephone solicitation.
             312          (2) A person may operate an automated telephone dialing system if a call is made:
             313          (a) with the prior express consent of the person who is called agreeing to receive a
             314      telephone solicitation from a specific solicitor; or
             315          (b) to a person with whom the solicitor has an established business relationship.
             316          Section 8. Section 13-26a-108 is enacted to read:
             317          13-26a-108. Prohibited conduct for facsimile solicitations.
             318          (1) Except as provided in Subsection (2), a person may not operate or authorize the
             319      operation of a facsimile machine to send an advertisement or otherwise solicit a sale as defined in
             320      this chapter.
             321          (2) A person may operate a facsimile machine to send an advertisement or solicitation if
             322      the advertisement solicitation is sent:
             323          (a) with the prior express consent of the person who receives the facsimile agreeing to
             324      receive the facsimile from a specific solicitor; or
             325          (b) to a person with whom the solicitor has an established business relationship.
             326          (3) A person may not send or authorize the sending of an advertisement or solicitation by
             327      facsimile in violation of Title 47 U.S.C. 227 or other applicable state or federal law.
             328          Section 9. Section 13-26a-109 is enacted to read:
             329          13-26a-109. Prohibited conduct for email solicitations.
             330          (1) Except as provided in Subsection (2), a person may not send or authorize transmission
             331      of unsolicited email to send an advertisement or otherwise solicit a sale as defined in this chapter.
             332          (2) A person may send or authorize transmission of unsolicited email if the solicitation is
             333      made:
             334          (a) with the prior express consent of the person who receives the email agreeing to receive
             335      the same from a specific solicitor; or
             336          (b) to a person with whom the solicitor has an established business relationship.
             337          (3) A person may not send or authorize an email in violation of Title 47 U.S.C. 227 or


             338      other applicable state or federal law.
             339          Section 10. Section 13-26a-110 is enacted to read:
             340          13-26a-110. Right of recission -- Cancellation.
             341          (1) (a) In addition to any right to otherwise revoke an offer, a person making a purchase
             342      from a telephone soliciting business, may cancel the sale at any time up to midnight of the third
             343      business day after the date of the transaction or receipt of the merchandise or premium, whichever
             344      is later, provided the solicitor advises the purchaser of his cancellation rights under this chapter
             345      at the time any solicitation is made.
             346          (b) If the solicitor fails to orally advise a purchaser of the right to cancel under this section
             347      at the time of any solicitation, the purchaser's right to cancel shall be extended to 90 days.
             348          (c) If the solicitor fails to orally advise a purchaser of his true name, telephone number,
             349      and complete street address at the time of any solicitation, the purchaser may cancel the sale at any
             350      time.
             351          (2) (a) Sales shall be canceled by mailing a notice of cancellation to the telephone
             352      solicitor's correct street address, postage prepaid.
             353          (b) If the telephone solicitor provided no correct street address, cancellation can be
             354      accomplished by sending a notice of cancellation to the division's offices, postage prepaid.
             355          (3) (a) If a cancellation involves durable goods, as defined by rule by the division, the
             356      purchaser shall return the durable goods to the seller.
             357          (b) If a cancellation involves expendable goods, as defined by rule by the division, the
             358      purchaser shall return any unused portion of those goods to the seller.
             359          (c) A reasonable attempt shall be made to return goods to the solicitor's correct street
             360      address within seven days of exercising the right to cancel, providing the solicitor has provided
             361      the purchaser with the address. If the solicitor has failed to give a correct address, no return is
             362      required to qualify for a full refund of the purchase price.
             363          (d) If the purchaser has used any portion of the services or goods purchased, the solicitor
             364      or telephone soliciting business shall receive a reasonable allowance for value given. This
             365      allowance may be deducted from any refund due the purchaser.
             366          (e) A solicitor shall be jointly and severally liable with the telephone soliciting business
             367      for any refund amount due following the cancellation of a sale made by the solicitor.
             368          (4) For the purposes of this section, "business day" does not include Sunday or a federal


             369      or state holiday, whether or not the soliciting business is customarily open for the transaction of
             370      business on that day.
             371          Section 11. Section 13-26a-111 is enacted to read:
             372          13-26a-111. Enforcement -- Penalties.
             373          (1) The division shall investigate complaints and assess administrative fines for violations
             374      of this chapter.
             375          (2) Any person who violates this chapter is subject to:
             376          (a) an administrative cease and desist order; and
             377          (b) an administrative fine of not less than $100 or more than $2,000 for each separate
             378      violation of this chapter.
             379          (3) All administrative fines collected under this chapter shall be deposited in the Consumer
             380      Protection Education and Training Fund created in Section 13-2-8 .
             381          (4) (a) Upon referral from the division, the attorney general or any district or county
             382      attorney may:
             383          (i) bring an action for temporary or permanent injunctive or other relief in any court of
             384      competent jurisdiction for any violation of this chapter; or
             385          (ii) bring an action in any court of competent jurisdiction for the collection of penalties
             386      authorized under Subsection (5).
             387          (b) The court may, upon entry of final judgment in an action brought under Subsection
             388      (4)(a), award restitution when appropriate to any person suffering loss because of a violation of
             389      this part if proof of loss is submitted to the satisfaction of the court.
             390          (5) Any telephone soliciting business or any person associated with a telephone soliciting
             391      business, including but not limited to solicitors, salespersons, agents, representatives of a solicitor,
             392      or independent contractors, who violates any provision of this chapter shall be subject to a civil
             393      penalty in a court of competent jurisdiction not exceeding $2,000 for each unlawful transaction.
             394          (6) (a) Any telephone soliciting business or any person associated with a telephone
             395      soliciting business, including but not limited to solicitors, salespersons, agents, representatives of
             396      a solicitor, or independent contractor, who violates this chapter as a first offense is guilty of a class
             397      B misdemeanor.
             398          (b) In the case of a second offense, the person is guilty of a class A misdemeanor.
             399          (c) In the case of three or more offenses, the person is guilty of a third degree felony.


             400          Section 12. Section 13-26a-112 is enacted to read:
             401          13-26a-112. Private right of action.
             402          (1) In addition to any other remedies, a person may bring an action in any state court of
             403      competent jurisdiction if that person has received a telephone solicitation, facsimile advertisement,
             404      or email that violates this chapter.
             405          (2) In a suit brought under Subsection (1), a person may:
             406          (a) recover the greater of $500 or the amount of the pecuniary loss, if any; and
             407          (b) recover court costs and reasonable attorneys' fees as determined by the court.
             408          Section 13. Section 13-26a-113 is enacted to read:
             409          13-26a-113. Incorporation by reference.
             410          The requirements of Title 47 U.S.C. 227 are incorporated by reference, except as the same
             411      are made more restrictive herein or the context of this chapter makes the same inappropriate or
             412      inapplicable.
             413          Section 14. Section 13-26a-114 is enacted to read:
             414          13-26a-114. Provisions of chapter not exclusive.
             415          The remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are
             416      in addition to all other causes of action, remedies, and penalties provided by law.
             417          Section 15. Section 54-8b-18 is amended to read:
             418           54-8b-18. Definitions -- Unauthorized change of telecommunications provider --
             419      Unauthorized charges -- Procedures for verification -- Penalties -- Authority of commission.
             420          (1) For purposes of this section:
             421          (a) "Agents" includes any person, firm, or corporation representing a telecommunications
             422      corporation for purposes of requesting a change in a subscriber's telecommunications provider, but
             423      does not include a local service provider when executing a request submitted by another service
             424      provider or its agents.
             425          (b) "Freeze" means a directive from a subscriber to retain the provider of public
             426      telecommunications services selected by the subscriber until the subscriber provides authorization
             427      for a change to another provider of public telecommunications services through any means by
             428      which a freeze is implemented.
             429          (c) "Small commercial subscriber" is a person or entity conducting a business, agriculture,
             430      or other enterprise in the state having less than five telecommunications lines.


             431          (d) "Subscriber" means a corporation, person, or government, or a person acting legally
             432      on behalf of a corporation, person, or government who has purchased public telecommunications
             433      services from a telecommunications corporation.
             434          (2) No telecommunications corporation or its agents shall make any change or authorize
             435      a different telecommunications corporation to make any change in the provider of any public
             436      telecommunications service to a subscriber unless it complies, at a minimum, with Subsections
             437      (2)(a) through (e). This Subsection (2) does not apply to a telecommunications corporation that
             438      effectuates a change in service provider pursuant to a change authorization submitted or requested
             439      by another telecommunications corporation.
             440          (a) The telecommunications corporation or its agents shall, at a minimum, inform the
             441      subscriber of the nature, extent, and rates of the service being offered and any charges associated
             442      with the change.
             443          (b) Notwithstanding Section [ 13-26-4 ] 13-26a-104, changes in provider of
             444      telecommunication service accomplished through telephone solicitation shall comply with the
             445      [Telephone Fraud Prevention Act, Sections 13-26-2 , 13-26-8 , 13-26-10 , and 13-26-11 ]
             446      requirements of Title 13, Chapter 26a, Telecommunications Solicitation Act, other than those
             447      relating to registration.
             448          (c) For sales of residential service or small commercial subscriber service, the
             449      telecommunications corporation or its agents shall confirm that the subscriber is aware of any
             450      charges that the subscriber must pay associated with the change and that the subscriber authorizes
             451      the change of provider. The subscriber's authorization to change the provider shall be confirmed
             452      by any one of the following methods:
             453          (i) obtaining the subscriber's written authorization;
             454          (ii) having the subscriber's oral authorization verified by an independent third party; or
             455          (iii) any means provided by rule of the Federal Communications Commission or the
             456      commission.
             457          (d) If the subscriber is not an individual, an authorization shall be valid only if given by
             458      an authorized representative of the subscriber.
             459          (e) (i) The written authorization to change the provider shall be signed by the subscriber
             460      and shall contain a clear, conspicuous, and unequivocal request by the subscriber for a change of
             461      telecommunications provider.


             462          (ii) A written authorization is not valid if it is presented to the subscriber for signature in
             463      connection with a sweepstakes, game of chance, or any other means prohibited by commission
             464      rule.
             465          (iii) Nothing in this section shall be construed to prohibit any person from offering a
             466      premium, incentive, or a thing of value to another as consideration for authorizing a change of
             467      telecommunications service provider, provided that no element of chance or skill is associated with
             468      the offer of the premium, incentive, or thing of value or its receipt.
             469          (3) The confirmation by a third-party verifier shall, at a minimum:
             470          (a) confirm the subscriber's identity with information unique to the customer, unless the
             471      customer refuses to provide identifying information, then that fact shall be noted;
             472          (b) confirm that the subscriber agrees to the requested change in telecommunications
             473      service providers; and
             474          (c) confirm that the subscriber has the authority to select the provider as the provider of
             475      that service.
             476          (4) A third-party verifier shall meet each of the following criteria:
             477          (a) any criteria for third-party verifiers set by the Federal Communications Commission;
             478          (b) not be directly or indirectly managed, controlled, directed, or owned wholly or in part:
             479          (i) by the telecommunications corporation or its agents that seek to provide the
             480      telecommunications service or by any corporation, firm, or person who directly or indirectly
             481      manages, controls, directs, or owns more than 5% of the telecommunications corporation; or
             482          (ii) by the marketing entity that seeks to market the telecommunications service or by any
             483      corporation, firm, or person who directly or indirectly manages, controls, directs, or owns more
             484      than 5% of the marketing entity;
             485          (c) operate from facilities physically separated from:
             486          (i) those of the telecommunications corporation or its agents that seek to provide the
             487      subscriber's telecommunications service; or
             488          (ii) those of the marketing entity that seeks to market a telecommunications service to the
             489      subscriber; and
             490          (d) not derive commissions or compensation based upon the number of change
             491      authorizations verified.
             492          (5) A telecommunications corporation or its agents seeking to verify the change


             493      authorization shall connect the subscriber to the third-party verifier or arrange for the third-party
             494      verifier to call the subscriber to verify the change authorization.
             495          (6) A third-party verifier that obtains the subscriber's oral verification regarding the change
             496      shall record that verification by obtaining appropriate verification data.
             497          (7) (a) The record verifying a subscriber's change of provider shall be available to the
             498      subscriber upon request.
             499          (b) Information obtained from the subscriber through verification may not be used for any
             500      other purpose.
             501          (c) Any intentional unauthorized release of the information in Subsection (7)(b) is grounds
             502      for penalties or other action by the commission or remedies provided by law to the aggrieved
             503      subscriber against the telecommunications corporation, third-party verifier, their agents, or their
             504      employees who are responsible for the violation.
             505          (8) The third-party verification shall occur in the same language as that in which the
             506      change was solicited.
             507          (9) The verification requirements described in this section shall apply to all changes in the
             508      provider of any public telecommunications service.
             509          (10) The commission may promulgate rules:
             510          (a) necessary to implement this section;
             511          (b) consistent with any rules promulgated by the Federal Communications Commission;
             512      and
             513          (c) in a nondiscriminatory and competitively neutral manner.
             514          (11) (a) Each subscriber may elect to require the telecommunications corporation
             515      providing the subscriber's local exchange service to implement a freeze until the subscriber
             516      provides authorization for a change to another provider of public telecommunications services.
             517          (b) Once a subscriber has elected the freeze option under Subsection (11)(a), the
             518      telecommunications corporation providing the subscriber's local exchange service may not process
             519      a request to change the subscriber to another provider of telecommunications services without
             520      prior authorization directly from the subscriber.
             521          (12) (a) Whenever the subscriber's provider of a telecommunications service changes, the
             522      new provider shall:
             523          (i) retain a record of the verified change authorization consistent with requirements of the


             524      Federal Communications Commission or rules issued by the commission; and
             525          (ii) be responsible for providing a conspicuous notice of the change within 30 days of the
             526      effective date of the change of service.
             527          (b) At a minimum, the notice in Subsection (12)(a)(ii) shall identify the new provider,
             528      contain a general description of the service and price, and provide information necessary for the
             529      subscriber to have questions answered or to rescind the change.
             530          (13) Any bill shall identify each telecommunications service provider of
             531      telecommunication service for which billing is rendered.
             532          (14) (a) Any person or provider of telecommunications service inadvertently or knowingly
             533      designating or changing the subscriber's telecommunications service provider in violation of this
             534      section shall refund to the subscriber any amounts required by the rules of the Federal
             535      Communications Commission and the commission.
             536          (b) The unauthorized provider in Subsection (14)(a) additionally shall:
             537          (i) bear all costs of restoring the customer to the service of the subscriber's original service
             538      provider; and
             539          (ii) pay to any other telecommunications provider any fees set by the commission for the
             540      designation or change.
             541          (15) Proceedings for violations of this section may be commenced by request for agency
             542      action filed with the commission by a subscriber, a telecommunications corporation, the Division
             543      of Public Utilities, or by the commission on its own motion.
             544          (16) Any telecommunications corporation, its agents, or a third-party verifier who violates
             545      this section or rules adopted to implement this section shall be subject to the provisions of Sections
             546      54-7-23 through 54-7-29 .
             547          (17) The commission is granted authority to enforce provisions relating to an unauthorized
             548      telecommunication service provider change in interstate and intrastate telecommunication service
             549      involving telecommunications corporations operating in the state.
             550          Section 16. Repealer.
             551          This act repeals:
             552          Section 13-25a-101, Title.
             553          Section 13-25a-102, Definitions.
             554          Section 13-25a-103, Prohibited conduct for telephone solicitations -- Exceptions.


             555          Section 13-25a-104, Prohibited conduct for facsimiles -- Exceptions.
             556          Section 13-25a-105, Penalties -- Administrative and criminal.
             557          Section 13-25a-106, Enforcement.
             558          Section 13-25a-107, Private action.
             559          Section 13-26-1, Short title.
             560          Section 13-26-2, Definitions.
             561          Section 13-26-3, Registration and bond required.
             562          Section 13-26-4, Exemptions from registration.
             563          Section 13-26-5, Right of rescission -- Cancellation.
             564          Section 13-26-8, Penalties.
             565          Section 13-26-10, Provisions of chapter not exclusive.
             566          Section 13-26-11, Prohibited practices.




Legislative Review Note
    as of 1-7-00 2:42 PM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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