January 27, 2009, Introduced by Senators CHERRY, SWITALSKI and JACOBS and referred to the Committee on Commerce and Tourism.
A bill to amend 1976 PA 331, entitled
"Michigan consumer protection act,"
by amending sections 3 and 11 (MCL 445.903 and 445.911), section 3
as amended by 2008 PA 310, and by adding section 3i.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. (1) Unfair, unconscionable, or deceptive methods,
acts, or practices in the conduct of trade or commerce are unlawful
and are defined as follows:
(a) Causing a probability of confusion or misunderstanding as
to the source, sponsorship, approval, or certification of goods or
services.
(b) Using deceptive representations or deceptive designations
of geographic origin in connection with goods or services.
(c) Representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits, or
quantities that they do not have or that a person has sponsorship,
approval, status, affiliation, or connection that he or she does
not have.
(d) Representing that goods are new if they are deteriorated,
altered, reconditioned, used, or secondhand.
(e) Representing that goods or services are of a particular
standard, quality, or grade, or that goods are of a particular
style or model, if they are of another.
(f) Disparaging the goods, services, business, or reputation
of another by false or misleading representation of fact.
(g) Advertising or representing goods or services with intent
not to dispose of those goods or services as advertised or
represented.
(h) Advertising goods or services with intent not to supply
reasonably expectable public demand, unless the advertisement
discloses a limitation of quantity in immediate conjunction with
the advertised goods or services.
(i) Making false or misleading statements of fact concerning
the reasons for, existence of, or amounts of price reductions.
(j) Representing that a part, replacement, or repair service
is needed when it is not.
(k) Representing to a party to whom goods or services are
supplied that the goods or services are being supplied in response
to a request made by or on behalf of the party, when they are not.
(l) Misrepresenting that because of some defect in a consumer's
home the health, safety, or lives of the consumer or his or her
family are in danger if the product or services are not purchased,
when in fact the defect does not exist or the product or services
would not remove the danger.
(m) Causing a probability of confusion or of misunderstanding
with respect to the authority of a salesperson, representative, or
agent to negotiate the final terms of a transaction.
(n) Causing a probability of confusion or of misunderstanding
as to the legal rights, obligations, or remedies of a party to a
transaction.
(o) Causing a probability of confusion or of misunderstanding
as to the terms or conditions of credit if credit is extended in a
transaction.
(p) Disclaiming or limiting the implied warranty of
merchantability and fitness for use, unless a disclaimer is clearly
and conspicuously disclosed.
(q) Representing or implying that the subject of a consumer
transaction will be provided promptly, or at a specified time, or
within a reasonable time, if the merchant knows or has reason to
know it will not be so provided.
(r) Representing that a consumer will receive goods or
services "free" or "without charge", or using words of similar
import in the representation, without clearly and conspicuously
disclosing with equal prominence in immediate conjunction with the
use of those words the conditions, terms, or prerequisites to the
use or retention of the goods or services advertised.
(s) Failing to reveal a material fact, the omission of which
tends to mislead or deceive the consumer, and which fact could not
reasonably be known by the consumer.
(t) Entering into a consumer transaction in which the consumer
waives or purports to waive a right, benefit, or immunity provided
by law, unless the waiver is clearly stated and the consumer has
specifically consented to it.
(u) Failing, in a consumer transaction that is rescinded,
canceled, or otherwise terminated in accordance with the terms of
an agreement, advertisement, representation, or provision of law,
to promptly restore to the person or persons entitled to it a
deposit, down payment, or other payment, or in the case of property
traded in but not available, the greater of the agreed value or the
fair market value of the property, or to cancel within a specified
time or an otherwise reasonable time an acquired security interest.
(v) Taking or arranging for the consumer to sign an
acknowledgment, certificate, or other writing affirming acceptance,
delivery, compliance with a requirement of law, or other
performance, if the merchant knows or has reason to know that the
statement is not true.
(w) Representing that a consumer will receive a rebate,
discount, or other benefit as an inducement for entering into a
transaction, if the benefit is contingent on an event to occur
subsequent to the consummation of the transaction.
(x) Taking advantage of the consumer's inability reasonably to
protect his or her interests by reason of disability, illiteracy,
or inability to understand the language of an agreement presented
by the other party to the transaction who knows or reasonably
should know of the consumer's inability.
(y) Gross discrepancies between the oral representations of
the seller and the written agreement covering the same transaction
or failure of the other party to the transaction to provide the
promised benefits.
(z) Charging the consumer a price that is grossly in excess of
the price at which similar property or services are sold.
(aa) Causing coercion and duress as the result of the time and
nature of a sales presentation.
(bb) Making a representation of fact or statement of fact
material to the transaction such that a person reasonably believes
the represented or suggested state of affairs to be other than it
actually is.
(cc) Failing to reveal facts that are material to the
transaction in light of representations of fact made in a positive
manner.
(dd) Subject to subdivision (ee), representations by the
manufacturer of a product or package that the product or package is
1 or more of the following:
(i) Except as provided in subparagraph (ii), recycled,
recyclable, degradable, or is of a certain recycled content, in
violation of guides for the use of environmental marketing claims,
16 CFR part 260.
(ii) For container holding devices regulated under part 163 of
the natural resources and environmental protection act, 1994 PA
451, MCL 324.16301 to 324.16303, representations by a manufacturer
that the container holding device is degradable contrary to the
definition provided in that act.
(ee) Representing that a product or package is degradable,
biodegradable, or photodegradable unless it can be substantiated by
evidence that the product or package will completely decompose into
elements found in nature within a reasonably short period of time
after consumers use the product and dispose of the product or the
package in a landfill or composting facility, as appropriate.
(ff) Offering a consumer a prize if in order to claim the
prize the consumer is required to submit to a sales presentation,
unless a written disclosure is given to the consumer at the time
the consumer is notified of the prize and the written disclosure
meets all of the following requirements:
(i) Is written or printed in a bold type that is not smaller
than 10-point.
(ii) Fully describes the prize, including its cash value, won
by the consumer.
(iii) Contains all the terms and conditions for claiming the
prize, including a statement that the consumer is required to
submit to a sales presentation.
(iv) Fully describes the product, real estate, investment,
service, membership, or other item that is or will be offered for
sale, including the price of the least expensive item and the most
expensive item.
(gg) Violating 1971 PA 227, MCL 445.111 to 445.117, in
connection with a home solicitation sale or telephone solicitation,
including, but not limited to, having an independent courier
service or other third party pick up a consumer's payment on a home
solicitation sale during the period the consumer is entitled to
cancel the sale.
(hh) Except as provided in subsection (3), requiring a
consumer to disclose his or her social security number as a
condition to selling or leasing goods or providing a service to the
consumer, unless any of the following apply:
(i) The selling, leasing, providing, terms of payment, or
transaction includes an application for or an extension of credit
to the consumer.
(ii) The disclosure is required or authorized by applicable
state or federal statute, rule, or regulation.
(iii) The disclosure is requested by a person to obtain a
consumer report for a permissible purpose described in section 604
of the fair credit reporting act, 15 USC 1681b.
(iv) The disclosure is requested by a landlord, lessor, or
property manager to obtain a background check of the individual in
conjunction with the rent or leasing of real property.
(v) The disclosure is requested from an individual to effect,
administer or enforce a specific telephonic or other electronic
consumer transaction that is not made in person but is requested or
authorized by the individual if it is to be used solely to confirm
the identity of the individual through a fraud prevention service
database. The consumer good or service shall still be provided to
the consumer upon verification of his or her identity if he or she
refuses to provide his or her social security number but provides
other information or documentation that can be used by the person
to verify his or her identity. The person may inform the consumer
that verification through other means than use of the social
security number may cause a delay in providing the service or good
to the consumer.
(ii) If a credit card or debit card is used for payment in a
consumer transaction, issuing or delivering a receipt to the
consumer that displays any part of the expiration date of the card
or more than the last 4 digits of the consumer's account number.
This subdivision does not apply if the only receipt issued in a
consumer transaction is a credit card or debit card receipt on
which the account number or expiration date is handwritten,
mechanically imprinted, or photocopied. This subdivision applies to
any consumer transaction that occurs on or after March 1, 2005,
except that if a credit or debit card receipt is printed in a
consumer transaction by an electronic device, this subdivision
applies to any consumer transaction that occurs using that device
only after 1 of the following dates, as applicable:
(i) If the electronic device is placed in service after March
1, 2005, July 1, 2005 or the date the device is placed in service,
whichever is later.
(ii) If the electronic device is in service on or before March
1, 2005, July 1, 2006.
(jj) Violating section 11 of the identity theft protection
act, 2004 PA 452, MCL 445.71.
(kk) Advertising or conducting a live musical performance or
production in this state through the use of a false, deceptive, or
misleading affiliation, connection, or association between a
performing group and a recording group. This subdivision does not
apply if any of the following are met:
(i) The performing group is the authorized registrant and owner
of a federal service mark for that group registered in the United
States patent and trademark office.
(ii) At least 1 member of the performing group was a member of
the recording group and has a legal right to use the recording
group's name, by virtue of use or operation under the recording
group's name without having abandoned the name or affiliation with
the recording group.
(iii) The live musical performance or production is identified
in all advertising and promotion as a salute or tribute and the
name of the vocal or instrumental group performing is not so
closely related or similar to that used by the recording group that
it would tend to confuse or mislead the public.
(iv) The advertising does not relate to a live musical
performance or production taking place in this state.
(v) The performance or production is expressly authorized by
the recording group.
(ll) Violating section 3e, 3f, 3g, or 3h.
(mm) Violating section 3i.
(2) The attorney general may promulgate rules to implement
this act under the administrative procedures act of 1969, 1969 PA
306, MCL 24.201 to 24.328. The rules shall not create an additional
unfair trade practice not already enumerated by this section.
However, to assure national uniformity, rules shall not be
promulgated to implement subsection (1)(dd) or (ee).
(3) Subsection (1)(hh) does not apply to either of the
following:
(a) Providing a service related to the administration of
health-related or dental-related benefits or services to patients,
including provider contracting or credentialing. This subdivision
is intended to limit the application of subsection (1)(hh) and is
not intended to imply that this act would otherwise apply to
health-related or dental-related benefits.
(b) An employer providing benefits or services to an employee.
Sec. 3i. (1) During an emergency period and in an emergency
area, a person or that person's agent or employee shall not rent or
sell or offer to rent or sell at an unconscionable price any
essential commodity, including, but not limited to, supplies,
services, provisions, or equipment, that is necessary for
consumption or use as a direct result of the emergency or impose an
unconscionable price for the rental or lease of any dwelling unit
or self-storage facility.
(2) A price increase approved by an appropriate governmental
agency is not a violation of this section.
(3) This section does not apply to a sale by a grower,
producer, or processor of a raw or processed food product, except
for a retail sale of that product to an ultimate consumer within
the emergency area.
(4) For purposes of this section, it is prima facie evidence
that a price is unconscionable if either of the following applies:
(a) The amount charged represents a gross disparity between
the price of the commodity or rental or lease of any dwelling unit
or self-storage facility that is the subject of the offer or
transaction and the average price at which that commodity or
dwelling unit or self-storage facility was rented, leased, sold, or
offered for rent or sale in the usual course of business during the
30 days immediately preceding a declaration of a state of
emergency, and the increase in the amount charged is not
attributable to additional costs incurred in connection with the
rental or sale of the commodity or rental or lease of any dwelling
unit or self-storage facility or national or international market
trends.
(b) The amount charged grossly exceeds the average price at
which the same or a similar commodity was readily obtainable in the
trade area during the 30 days immediately preceding a declaration
of a state of emergency, and the increase in the amount charged is
not attributable to additional costs incurred in connection with
the rental or sale of the commodity or rental or lease of any
dwelling unit or self-storage facility or national or international
market trends.
(5) As used in this section:
(a) "Commodity" means any goods, services, materials,
merchandise, supplies, provisions, equipment, resources, or other
article of commerce and includes, without limitation, food, water,
ice, chemicals, petroleum products, and lumber necessary for
consumption or use as a direct result of an emergency.
(b) "Emergency area" means an area of this state subject to a
state of emergency declared by the governor under the emergency
management act, 1976 PA 390, MCL 30.401 to 30.421, or under 1945 PA
302, MCL 10.31 to 10.33, or a state of energy emergency declared by
the governor under 1982 PA 191, MCL 10.81 to 10.89.
(c) "Emergency period" means the period during which a state
of emergency declared by the governor is effective under the
emergency management act, 1976 PA 390, MCL 30.401 to 30.421, or
under 1945 PA 302, MCL 10.31 to 10.33, or a state of energy
emergency declared by the governor under 1982 PA 191, MCL 10.81 to
10.89.
Sec. 11. (1) Whether or not he or she seeks damages or has an
adequate remedy at law, a person may bring an action to do either
or both of the following:
(a) Obtain a declaratory judgment that a method, act, or
practice is unlawful under section 3.
(b) Enjoin in accordance with the principles of equity a
person who is engaging or is about to engage in a method, act, or
practice which is unlawful under section 3.
(2) Except in a class action, a person who suffers loss as a
result of a violation of this act may bring an action to recover
actual damages or $250.00, whichever is greater, together with
reasonable
attorneys' attorney fees.
(3) A person who suffers loss as a result of a violation of
this act may bring a class action on behalf of persons residing or
injured in this state for the actual damages caused by any of the
following:
(a) A method, act, or practice in trade or commerce defined as
unlawful under section 3.
(b) A method, act, or practice in trade or commerce declared
to be unlawful under section 3(1) by a final judgment of the
circuit court or an appellate court of this state which is either
reported officially or made available for public dissemination
pursuant to section 9 by the attorney general not less than 30 days
before the method, act, or practice on which the action is based
occurs.
(c) A method, act, or practice in trade or commerce declared
by a circuit court of appeals or the supreme court of the United
States to be an unfair or deceptive act or practice within the
meaning of section 5(a)(1) of the federal trade commission act, 15
U.S.C.
USC 45(a)(1), in a decision which affirms or directs the
affirmance of a cease and desist order issued by the federal trade
commission if the order is final within the meaning of section 5(g)
of
the federal trade commission act, 15 U.S.C. USC 45(g),
and which
is officially reported not less than 30 days before the method,
act, or practice on which the action is based occurs. For purposes
of this subdivision, a method, act, or practice shall not be deemed
to be unfair or deceptive within the meaning of section 5(a)(1) of
the federal trade commission act solely because the method, act, or
practice is made unlawful by another federal statute that refers to
or incorporates section 5(a)(1) of the federal trade commission
act.
(4) On motion of a person and without bond in an action
brought under subsection (3), the court may make an appropriate
order: to reimburse persons who have suffered damages; to carry out
a transaction in accordance with the aggrieved persons' reasonable
expectations; to strike or limit the application of unconscionable
clauses of contracts to avoid an unconscionable result; or to grant
other appropriate relief. The court after a hearing may appoint a
receiver or order sequestration of the defendant's assets if it
appears to the satisfaction of the court that the defendant
threatens or is about to remove, conceal, or dispose of his or her
assets to the detriment of members of the class.
(5) If at any stage of proceedings brought under subsection
(3) the court requires that notice be sent to the class, a person
may petition the court to require the defendant to bear the cost of
notice. In determining whether to impose the cost on the defendant
or the plaintiff, the court shall consider the probability that the
person will succeed on the merits of his or her action.
(6) If the defendant shows by a preponderance of the evidence
that a violation of this act resulted from a bona fide error
notwithstanding the maintenance of procedures reasonably adapted to
avoid the error, the amount of recovery shall be limited to actual
damages.
(7) An action under this section shall not be brought more
than 6 years after the occurrence of the method, act, or practice
which
is the subject of the action nor or more than 1 year after
the last payment in a transaction involving the method, act, or
practice which is the subject of the action, whichever period of
time ends at a later date. However, when a person commences an
action against another person, the defendant may assert, as a
defense or counterclaim, any claim under this act arising out of
the transaction on which the action is brought.
(8) This section does not apply to a violation of section
3(1)(mm).