SENATE BILL No. 413

 

 

June 5, 2013, Introduced by Senators HOOD, ANDERSON and YOUNG and referred to the Committee on Regulatory Reform.

 

 

 

     A bill to amend 1976 PA 331, entitled

 

"Michigan consumer protection act,"

 

by amending section 3 (MCL 445.903), as amended by 2010 PA 195.

 

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) Selling, or offering or advertising for sale, a mattress

 

as new or custom-made if that mattress is made from a used mattress

 

or includes materials or components from a used mattress.

 

     (mm) (ll) Violating section 3e, 3f, 3g, 3h, or 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.