Bill Text: IA SF2146 | 2019-2020 | 88th General Assembly | Introduced
Bill Title: A bill for an act relating to fees charged in conjunction with free trials, the cancellation of recurring charges, and making penalties applicable.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2020-02-12 - Subcommittee recommends amendment and passage. [SF2146 Detail]
Download: Iowa-2019-SF2146-Introduced.html
Senate
File
2146
-
Introduced
SENATE
FILE
2146
BY
SEGEBART
A
BILL
FOR
An
Act
relating
to
fees
charged
in
conjunction
with
free
1
trials,
the
cancellation
of
recurring
charges,
and
making
2
penalties
applicable.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
NEW
SECTION
.
554E.1
Definitions.
1
As
used
in
this
chapter,
unless
the
context
otherwise
2
requires:
3
1.
“Account
debit
arrangement”
means
an
agreement
between
a
4
depository
institution
and
a
person
permitting
the
depository
5
institution
to
debit
the
person’s
account
to
collect
fees
or
6
other
amounts
due
to
a
third
party.
7
2.
“Consumer”
means
a
person
who
is
a
resident
of
this
8
state,
and
to
whom
any
of
the
following
apply:
9
a.
The
person
is
a
buyer,
lessee,
or
debtor
to
whom
credit
10
is
granted
in
a
consumer
credit
transaction.
11
b.
The
person
has
an
account
or
other
contractual
12
arrangement
with
a
depository
institution.
13
3.
“Consumer
credit
transaction”
means
the
same
as
defined
14
in
section
537.1301.
15
4.
“Depository
institution”
means
the
same
as
defined
in
16
section
502.102.
17
5.
“Lender”
means
the
same
as
defined
in
section
537.1301.
18
Sec.
2.
NEW
SECTION
.
554E.2
Cancellation
of
recurring
19
charges.
20
1.
A
consumer
may
cancel,
with
immediate,
prospective
21
effect,
a
recurring
payment
to
a
third-party
vendor
of
goods
or
22
services
made
on
the
consumer’s
behalf
by
any
of
the
following:
23
a.
A
lender
pursuant
to
a
consumer
credit
transaction.
24
b.
A
depository
institution
pursuant
to
an
account
debit
25
arrangement.
26
c.
A
provider
of
financial
services
that
may
make
such
27
payments
pursuant
to
an
agreement
with
the
consumer.
28
2.
A
lender,
depository
institution,
or
provider
of
29
financial
services
that
makes
a
payment
to
a
third
party
on
30
behalf
of
a
consumer
shall
implement
a
procedure
for
the
31
immediate
and
prospective
cancellation
of
such
payments
upon
32
the
receipt
of
a
request
from
the
consumer,
which
request
may
33
be
transmitted
in
writing,
electronically,
or
verbally.
34
3.
Nothing
in
this
chapter
affects
a
preexisting
35
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installment
contract
for
previously
delivered
goods
or
services
1
or
a
contract
between
a
consumer
and
a
lender
who
loaned
money
2
to
the
consumer
for
the
purchase
of
goods
or
services.
3
Sec.
3.
Section
714.16,
subsection
2,
paragraph
o,
4
subparagraph
(2),
Code
2020,
is
amended
to
read
as
follows:
5
(2)
It
is
an
unlawful
practice
for
a
person
to
cause
a
6
consumer
to
incur
a
charge
or
other
financial
obligation
as
a
7
result
of
accepting
a
free
offer
unless
,
one
of
the
following
8
occurs:
9
(a)
The
person
obtains
the
consumer’s
billing
information
10
directly
from
the
consumer.
For
purposes
of
this
subparagraph
11
division,
a
person
obtains
a
consumer’s
billing
information
12
directly
from
the
consumer
if
the
billing
information
is
13
obtained
by
the
person
or
by
the
person’s
agent
or
employee.
14
(b)
The
consumer
gives
affirmative
consent
at
the
time
15
the
consumer
accepts
a
free
offer
for
the
person
to
provide
16
billing
information
to
a
person
other
than
the
person
making
17
the
free
offer
after
the
completion
of
delivery
of
goods
or
18
services
without
charge
pursuant
to
the
free
offer,
and
before
19
any
charge
or
other
financial
obligation
is
incurred,
the
20
consumer
consents
to
the
charge
or
financial
obligation
in
21
writing,
electronically,
or
verbally,
and
the
person
imposing
22
the
financial
obligation
records
the
verbal
consent
.
23
EXPLANATION
24
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
25
the
explanation’s
substance
by
the
members
of
the
general
assembly.
26
This
bill
relates
to
fees
charged
in
conjunction
with
free
27
trials
and
the
cancellation
of
recurring
charges.
28
The
bill
defines
“account
debit
arrangement”
as
an
agreement
29
between
a
depository
institution
and
a
person
permitting
the
30
depository
institution
to
debit
the
person’s
account
to
collect
31
fees
due
to
a
third
party.
The
bill
defines
“consumer”
as
a
32
person
who
is
a
resident
of
the
state,
and
to
whom
either
of
33
the
following
apply:
the
person
is
a
buyer,
lessee,
or
debtor
34
to
whom
credit
is
granted
in
a
consumer
credit
transaction;
35
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or
the
person
has
an
account
with
a
depository
institution.
1
The
bill
defines
“consumer
credit
transaction”
by
reference
to
2
Code
section
537.1301,
as
a
consumer
credit
sale
or
consumer
3
loan,
a
refinancing
or
consolidation
thereof,
a
consumer
lease,
4
or
a
consumer
rental
purchase
agreement.
The
bill
defines
5
“depository
institution”
by
reference
to
Code
section
502.102,
6
as
a
bank,
savings
institution,
trust
company,
credit
union,
7
or
similar
institution
that
is
organized
or
chartered
under
8
the
laws
of
a
state
or
of
the
United
States.
The
bill
defines
9
“lender”
by
reference
to
Code
section
537.1301,
as
a
person
who
10
makes
a
loan
or
takes
an
assignment
of
a
right
to
payment.
11
Pursuant
to
the
bill,
a
consumer
may
cancel
a
recurring
12
payment
to
a
third-party
vendor
of
goods
or
services
made
on
13
the
consumer’s
behalf
by
a
lender
pursuant
to
a
consumer
credit
14
transaction;
a
depository
institution
pursuant
to
an
account
15
debit
arrangement;
or
a
provider
of
financial
services
that
may
16
make
such
payments
pursuant
to
any
agreement
with
the
consumer.
17
The
bill
also
requires
a
lender,
depository
institution,
or
18
provider
of
financial
services
that
makes
a
payment
to
a
third
19
party
on
behalf
of
a
consumer
to
implement
a
procedure
for
the
20
immediate
cancellation
of
such
payments
upon
the
receipt
of
a
21
request
from
the
consumer.
22
The
bill
provides
that
nothing
in
the
new
Code
chapter
23
affects
a
preexisting
lawful
installment
contract
or
a
contract
24
between
a
consumer
and
a
lender
who
loaned
money
to
the
25
consumer
for
the
purchase
of
goods
or
services.
26
Current
law
provides
it
is
an
unlawful
practice
for
a
27
person
to
cause
a
consumer
to
incur
a
financial
obligation
as
28
a
result
of
accepting
a
free
offer
unless
either
the
person
29
obtains
the
consumer’s
billing
information
directly
from
the
30
consumer,
or
the
consumer
gives
affirmative
consent
at
the
time
31
the
consumer
accepts
a
free
offer
for
the
person
to
provide
32
billing
information
to
a
person
other
than
the
person
making
33
the
free
offer.
The
bill
modifies
this
provision
by
providing
34
it
is
an
unlawful
practice
for
a
person
to
cause
a
consumer
to
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incur
a
charge
or
other
financial
obligation
as
a
result
of
1
accepting
a
free
offer
unless,
after
the
completion
of
delivery
2
of
goods
or
services
pursuant
to
the
free
offer,
and
before
any
3
charge
or
other
financial
obligation
is
incurred,
the
consumer
4
consents
to
the
charge
or
financial
obligation.
Several
types
5
of
remedies
are
available
if
a
court
finds
that
a
person
has
6
committed
an
unlawful
practice,
including
injunctive
relief,
7
disgorgement
of
moneys
or
property,
and
a
civil
penalty
not
to
8
exceed
$40,000
per
violation.
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