STATE OF OKLAHOMA

1st Session of the 53rd Legislature (2011)

HOUSE BILL 1318	By:	Morgan

AS INTRODUCED

An Act relating to contracts; amending 15 O.S. 2001, Section 753, as last amended by Section 1, Chapter 61, O.S.L. 2003 (15 O.S. Supp. 2010, Section 753), which relates to the Oklahoma Consumer Protection Act; adding unlawful practice; defining terms; prohibiting free offers unless certain conditions are met; providing exception; stating exception shall not extend to affiliates unless certain conditions apply; providing for punishments for violations; providing for codification; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     15 O.S. 2001, Section 753, as last amended by Section 1, Chapter 61, O.S.L. 2003 (15 O.S. Supp. 2010, Section 753), is amended to read as follows:
Section 753.  A person engages in a practice which is declared to be unlawful under the Oklahoma Consumer Protection Act, Section 751 et seq. of this title, when, in the course of the person's business, the person:
1.  Represents, knowingly or with reason to know, that the subject of a consumer transaction is of a particular make or brand, when it is of another;
2.  Makes a false or misleading representation, knowingly or with reason to know, as to the source, sponsorship, approval, or certification of the subject of a consumer transaction;
3.  Makes a false or misleading representation, knowingly or with reason to know, as to affiliation, connection, association with, or certification by another;
4.  Makes a false or misleading representation or designation, knowingly or with reason to know, of the geographic origin of the subject of a consumer transaction;
5.  Makes a false representation, knowingly or with reason to know, as to the characteristics, ingredients, uses, benefits, alterations, or quantities of the subject of a consumer transaction or a false representation as to the sponsorship, approval, status, affiliation or connection of a person therewith;
6.  Represents, knowingly or with reason to know, that the subject of a consumer transaction is original or new if the person knows that it is reconditioned, reclaimed, used, or secondhand;
7.  Represents, knowingly or with reason to know, that the subject of a consumer transaction is of a particular standard, style or model, if it is of another;
8.  Advertises, knowingly or with reason to know, the subject of a consumer transaction with intent not to sell it as advertised;
9.  Advertises, knowingly or with reason to know, the subject of a consumer transaction with intent not to supply reasonably expected public demand, unless the advertisement discloses a limitation of quantity;
10.  Advertises under the guise of obtaining sales personnel when in fact the purpose is to sell the subject of a consumer transaction to the sales personnel applicants;
11.  Makes false or misleading statements of fact, knowingly or with reason to know, concerning the price of the subject of a consumer transaction or the reason for, existence of, or amounts of price reduction;
12.  Employs "bait and switch" advertising, which consists of an offer to sell the subject of a consumer transaction which the seller does not intend to sell, which advertising is accompanied by one or more of the following practices:
a.	refusal to show the subject of a consumer transaction advertised,
b.	disparagement of the advertised subject of a consumer transaction or the terms of sale,
c.	requiring undisclosed tie-in sales or other undisclosed conditions to be met prior to selling the advertised subject of a consumer transaction,
d.	refusal to take orders for the subject of a consumer transaction advertised for delivery within a reasonable time,
e.	showing or demonstrating defective subject of a consumer transaction which the seller knows is unusable or impracticable for the purpose set forth in the advertisement,
f.	accepting a deposit for the subject of a consumer transaction and subsequently charging the buyer for a higher priced item, or
g.	willful failure to make deliveries of the subject of a consumer transaction within a reasonable time or to make a refund therefor upon the request of the purchaser;
13.  Conducts a closing out sale without having first obtained a license as required in this act, Section 751 et seq. of this title;
14.  Resumes the business for which the closing out sale was conducted within one (1) year from the expiration date of the closing out sale license;
15.  Falsely states, knowingly or with reason to know, that services, replacements or repairs are needed;
16.  Violates any provision of the Oklahoma Health Spa Act, Section 2000 et seq. of Title 59 of the Oklahoma Statutes;
17.  Violates any provision of the Home Repair Fraud Act, Section 765.1 et seq. of this title;
18.  Violates any provision of the Consumer Disclosure of Prizes and Gifts Act, Section 996.1 et seq. of Title 21 of the Oklahoma Statutes;
19.  Violates any provision of Section 755.1 of this title or Section 1847a of Title 21 of the Oklahoma Statutes;
20.  Commits an unfair or deceptive trade practice as defined in Section 752 of this title or Section 2 of this act;
21.  Violates any provision of Section 169.1 of Title 8 of the Oklahoma Statutes in fraudulently or intentionally failing or refusing to honor the contract to provide certain cemetery services specified in the contract entered into pursuant to the Perpetual Care Fund Act;
22.  Misrepresents a mail solicitation as an invoice or as a billing statement;
23.  Offers to purchase a mineral or royalty interest through an offer that resembles an oil and gas lease and that the consumer believed was an oil and gas lease;
24.  Refuses to honor gift certificates, warranties, or any other merchandise offered by a person in a consumer transaction executed prior to the closing of the business of the person without providing a purchaser a means of redeeming such merchandise or ensuring the warranties offered will be honored by another person;
25.  Knowingly causes a charge to be made by any billing method to a consumer for services which the person knows was not authorized in advance by the consumer;
26.  Knowingly causes a charge to be made by any billing method to a consumer for a product or products which the person knows was not authorized in advance by the consumer;
27.  Violates Section 752A of this title;
28.  Makes deceptive use of another’s name in notification or solicitation, as defined in Section 752 of this title;
29.  Falsely states or implies that any person, product or service is recommended or endorsed by a named third person; or
30.  Falsely states that information about the consumer, including but not limited to, the name, address or phone number of the consumer has been provided by a third person, whether that person is named or unnamed.
SECTION 2.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 753.1 of Title 15, unless there is created a duplication in numbering, reads as follows:
A.  As used in this section: 
1.  “Established business relationship” means a prior or existing relationship formed by a voluntary two-way communication between a person and a consumer with an exchange of consideration on the basis of the consumer's purchase from or transaction with the person within the eighteen (18) months immediately preceding the date of a free offer; and
2.  "Free offer" means an offer of a rebate or of products or services without cost to a consumer by a person under which, as a result of accepting the rebate, products or services, the consumer is required to contact the person to avoid incurring a financial obligation for receiving additional products or services.
B.  A person shall not make a free offer to a consumer in this state unless, at the time the consumer agrees to the free offer: 
1.  The person obtains directly from the consumer information necessary for billing the consumer; and 
2.  The person provides the consumer with clear and conspicuous information regarding the terms of the free offer, including any additional financial obligations that may be incurred as a result of accepting the free offer.
C.  This section shall not apply to a free offer when the person and the consumer have an established business relationship.  The consumer’s established business relationship with the person does not extend to affiliates of the person, unless the consumer would reasonably expect an affiliate to be included given the nature and type of goods or services offered by the affiliate and the identity of the affiliate.
D.  A person violating this section shall commit an unfair or deceptive trade practice and be subject to action by the Attorney General or a district attorney as described in Section 756.1 of Title 15 of the Oklahoma Statutes.
SECTION 3.  This act shall become effective November 1, 2011.

53-1-5325	EK	01/17/11