California Consumer Protection Amendment


	CHAPTER   785

	FILED WITH SECRETARY OF STATE   SEPTEMBER 23, 1996

	APPROVED BY GOVERNOR   SEPTEMBER 21, 1996

	PASSED THE ASSEMBLY   AUGUST 28, 1996

	PASSED THE SENATE   AUGUST 20, 1996

	AMENDED IN SENATE   AUGUST 5, 1996

	AMENDED IN SENATE   JULY 2, 1996

	AMENDED IN SENATE   JUNE 17, 1996

	AMENDED IN ASSEMBLY   MAY 13, 1996

	AMENDED IN ASSEMBLY   MAY 2, 1996

	AMENDED IN ASSEMBLY   MARCH 28, 1996



INTRODUCED BY  Assembly Member Speier



                        FEBRUARY 23, 1996



   An act to amend Section 17538 of the Business and Professions

Code, relating to sales.





	LEGISLATIVE COUNSEL'S DIGEST





   AB 3320, Speier.  Telephone, mail order, and catalog sales:

Internet.

   Existing law regulates the sale, lease, or offering for sale or

lease of goods or services by telephone, mail order, or catalog.

   This bill would expand those provisions to apply to sales or

leases conducted using the Internet.  The bill would require a vendor

conducting business through the Internet or any other electronic

means of communication to make specified disclosures to a buyer.  A

violation of these provisions would be a misdemeanor, thus the bill

would impose a state-mandated local program.

  The California Constitution requires the state to reimburse local

agencies and school districts for certain costs mandated by the

state.  Statutory provisions establish procedures for making that

reimbursement.

   This bill would provide that no reimbursement is required by this

act for a specified reason.





THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:





  SECTION 1.  Section 17538 of the Business and Professions Code is

amended to read:

   17538.  (a) It is unlawful in the sale or lease or offering for

sale or lease of goods or services, for any person conducting sales

or leases by telephone, Internet or other electronic means of

communication, mail order, or catalog in this state, including, but

not limited to, the offering for sale or lease on television, radio,

Internet, or other electronic means of communication or

telecommunications device of goods or services which may be ordered

by mail, telephone, Internet, or other electronic means of

communication or telecommunications device, or for any person

advertising in connection with those sales, leases, or advertisements

a mailing address, telephone number, or Internet or other electronic

address, to accept payment from or for a buyer, for the purchase or

lease of goods or services ordered by mail, telephone, Internet, or

other electronic means of communication or telecommunications device,

whether payment to the vendor is made directly, through the mails,

by means of a transfer of funds from an account of the buyer or any

other person, or by any other means, and then permit 30 days, unless

otherwise conspicuously stated in the offering or advertisement, or

unless a shorter time is clearly communicated by the person

conducting the sale or lease, to elapse without doing any one of the

following things:

   (1) Shipping, mailing, or providing the goods or services ordered.



   (2) Mailing a full refund or, if payment was made by means of a

transfer from an account, (A) crediting the account in the full

amount of the debit, or (B) if a third party is the creditor, issuing

a credit memorandum to the third party who shall promptly credit the

account in the full amount of the debit.

   (3) Sending the buyer a letter or other written notice (A)

advising the buyer of the duration of an expected delay expressed as

a specific number of days or weeks, or proposing the substitution of

goods or services of equivalent or superior quality, and (B) offering

to make a full refund, in accordance with paragraph (2), within one

week if the buyer so requests.  The vendor shall provide to the buyer

in that letter or written notice a toll-free telephone number or

other cost-free method to communicate the buyer's request for a full

refund.  If the vendor proposes to substitute goods or services, the

vendor shall describe the substitute goods or services in detail,

indicating fully how the substitute differs from the goods or

services ordered.

   (4) (A) Shipping, mailing, or providing substitute goods or

services of equivalent or superior quality, if the buyer is extended

the opportunity to return the substitute goods or services and the

vendor promises to refund to the buyer (i) the cost of returning the

substitute goods or services and (ii) any portion of the purchase

price previously paid by the buyer.

   (B) Except as provided in subparagraph (C), a notice to the buyer

shall accompany the mailing, shipping, or providing of the substitute

goods or services which informs the buyer of the substitution;

describes fully how the substitute differs from the goods or services

ordered, except that obvious nontechnical differences, such as

color, need not be described; and discloses the buyer's right to

reject the substitute goods or services and obtain a full refund of

the amount paid, plus the cost of returning the substitute goods or

services.

   (C) The vendor may omit from the notice required by subparagraph

(B) a description of how the substitute goods or services differ from

the ordered goods or services if the notice otherwise complies with

subparagraph (B), and if all the following requirements are complied

with:

   (i) The vendor maintains at least 100 retail outlets located in at

least 20 counties in this state that are open to the public

regularly during normal business hours where buyers can order catalog

goods, pick them up, and return them for refunds.

   (ii) The vendor maintains a toll-free telephone number and

provides to each buyer, at the time of the buyer's call, a full

description of how substitute goods or services differ from ordered

goods or services.  The toll-free telephone number shall operate and

be staffed at all times during which goods or services normally are

available for pick up from the vendor's retail outlets.

   (iii) If the buyer picks up substitute goods or services from the

vendor's retail outlet, the notice required by subparagraph (B) as

modified by this subparagraph is placed on, or attached to, the

exterior of the package or wrapping containing the substitute, or is

handed to the buyer at the time the buyer picks up the substitute.

   (iv) The notice contains a reference number or some other means of

identifying the ordered goods or services and the substitute goods

or services.

   (v) The notice contains the vendor's toll-free telephone number

and instructions to the buyer that the buyer may call that number to

obtain a full description of how the substitute differs from the

ordered goods.

   (b) For purposes of paragraphs (3) and (4) of subdivision (a),

goods or services shall be considered of "equivalent or superior

quality" only if they are (1) substantially similar to the goods or

services ordered, (2) fit for the usual purposes for which the goods

or services ordered are used, and (3) normally offered by the vendor

at a price equal to or greater than the price of the goods or

services ordered.

   (c) When a buyer makes an initial application for an open-end

credit plan, as defined in the Federal Consumer Credit Protection Act

(15 U.S.C. Sec.  1682), at the same time the goods or services are

ordered, and the goods or services are to be purchased on credit, the

person conducting the business shall have 50 days, rather than 30

days, to perform the actions specified in this section.

   (d) A vendor conducting business through the Internet or any other

electronic means of communication shall do  all of the following

when the transaction involves a buyer located in California:

   (1) Before accepting any payment or processing any debit or credit

charge or funds transfer, the vendor shall disclose to the buyer in

writing or by electronic means of communication, such as E-mail or an

on-screen notice, the vendor's return and refund policy, the legal

name under which the business is conducted and, except as provided in

paragraph (3), the complete street address from which the business

is actually conducted.

   (2) If the disclosure of the vendor's legal name and address

information required by this subdivision is made by on-screen notice,

all of the following shall apply:

   (A) The disclosure of the legal name and address information shall

appear on any of the following:  (i) the first screen displayed when

the vendor's electronic site is accessed, (ii) on the screen on

which goods or services are first offered, (iii) on the screen on

which a buyer may place the order for goods or services or (iv) on

the screen on which the buyer may enter payment information, such as

a credit card account number.  The communication of that disclosure

shall not be structured to be smaller or less legible than the text

of the offer of the goods or services.

   (B) The disclosure of the legal name and address information shall

be accompanied by an adjacent statement describing how the buyer may

receive the information at the buyer's E-mail address.  The vendor

shall provide the disclosure information to the buyer at the buyer's

E-mail address within five days of receiving the buyer's request.

   (C) Until the vendor complies with subdivision (a) in connection

with all buyers of the vendor's goods or services, the vendor shall

make available to a buyer and any person or entity who may enforce

this section pursuant to Section 17535 on-screen access to the

information required to be disclosed under this subdivision.

   (3) The complete street address need not be disclosed as required

by paragraph (1) if the vendor utilizes a private mailbox receiving

service and  all of the following conditions are met:  (A) the vendor

satisfies the conditions described in paragraph (2) of subdivision

(b) of Section 17538.5, (B) the vendor discloses the actual street

address of the private mailbox receiving service in the manner

prescribed by this subdivision for the disclosure of the vendor's

actual street address, and (C) the vendor and the private mailbox

receiving service comply with all of the requirements of subdivisions

(c) to (f), inclusive, of Section 17538.5.

   (e) As used in this section and Section 17538.3, the following

words have the following meanings:

   (1) "Goods" means tangible chattels, including certificates or

coupons exchangeable for those goods, and including goods which, at

the time of the sale or subsequently, are to be so affixed to real

property as to become a part of that real property, whether or not

severable therefrom.

   (2) "Person" means an individual, partnership, corporation,

association, or other group, however organized.

   (3) "Buyer" means a person who seeks or acquires, by purchase or

lease, any goods or services for any purpose.

   (4) "Services" means work, labor, and services, including services

furnished in connection with the sale or repair of goods.

   (5) "Vendor" means a person who, as described in subdivision (a),

vends, sells, leases, supplies, or ships goods or services, who

conducts sales or leases of goods or services, or who offers goods or

services for sale or lease.  "Vendor" does not include a person

responding to an electronic agent in connection with providing goods

or services to a buyer if the aggregate amount of all transactions

with the buyer does not exceed ten dollars ($10).

   (6) "Internet" means the global information system that is

logically linked together by a globally unique address space based on

the Internet Protocol (IP), or its subsequent extensions; and is

able to support communications using the Transmission Control

Protocol/Internet Protocol (TCP/IP) suite, or its subsequent

extensions, or other IP-compatible protocols; and provides, uses, or

makes accessible, either publicly or privately, high level services

layered on the communications and related infrastructure described

herein.

   (7) "Electronic agent" means a computer program designed,

selected, or programmed to initiate or respond to electronic messages

or performances without review by an individual.

   (f) Any violation of the provisions of this section is a

misdemeanor punishable by imprisonment in the county jail not

exceeding six months, or by a fine not exceeding one thousand dollars

($1,000), or by both.

  SEC. 2.  No reimbursement is required by this act pursuant to

Section 6 of Article XIIIB of the California Constitution because the

only costs that may be incurred by a local agency or school district

will be incurred because this act creates a new crime or infraction,

eliminates a crime or infraction, or changes the penalty for a crime

or infraction, within the meaning of Section 17556 of the Government

Code, or changes the definition of a crime within the meaning of

Section 6 of Article XIIIB of the California Constitution.

   Notwithstanding Section 17580 of the Government Code, unless

otherwise specified, the provisions of this act shall become

operative on the same date that the act takes effect pursuant to the

California Constitution.