HB516INTRODUCED
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HB516
ENNJ229-1
By Representatives Chestnut, Shaw, Lipscomb, Moore (P), Gray,
Robbins, Rigsby
RFD: Commerce and Small Business
First Read: 03-Apr-25
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6 ENNJ229-1 12/06/2024 THR (L)THR 2024-3048
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First Read: 03-Apr-25
SYNOPSIS:
Under existing law, the Legislature has declared
numerous deceptive acts or practices in the conduct of
any trade or commerce to be unlawful.
This bill would further provide that the use of
a computer to interact with a consumer as part of a
commercial transaction in a manner that would deceive
the consumer into reasonably believing that the
consumer is interacting with a human is also an
unlawful deceptive trade practice.
A BILL
TO BE ENTITLED
AN ACT
Relating to deceptive trade practices; to amend Section
8-19-5, Code of Alabama 1975, to provide that the use of a
computer to interact with a consumer in a manner that deceives
the consumer into believing that the interaction is with a
human is an unlawful trade practice.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 8-19-5, Code of Alabama 1975, is
amended to read as follows:
"§8-19-5
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"§8-19-5
The following deceptive acts or practices in the
conduct of any trade or commerce are hereby declared to be
unlawful:
(1) Passing off goods or services as those of another,
provided that this section shall not prohibit the private
labeling of goods or services.
(2) Causing confusion or misunderstanding as to the
source, sponsorship, approval, or certification of goods or
services.
(3) Causing confusion or misunderstanding as to the
affiliation, connection, or association with, or certification
by another, provided that this section shall not prohibit the
private labeling of goods or services.
(4) Using deceptive representations or designations of
geographic origin in connection with goods or services.
(5) Representing that goods or services have
sponsorship, approval, characteristics, ingredients, uses,
benefits, or qualities that they do not have or that a person
has sponsorship, approval, status, affiliation, or connection
that he or she does not have.
(6) Representing that goods are original or new if they
are deteriorated, reconditioned, reclaimed, used, secondhand,
or altered to the point of decreasing their value or rendering
the goods unfit for the ordinary purpose for which they were
purchased, provided that this subdivision shall not apply to
new goods which have been reconditioned, reclaimed, or
repaired and such fact is disclosed to the purchaser.
(7) Representing that goods or services are of a
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(7) 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.
(8) Disparaging the goods, services, or business of
another by false or misleading representation of fact.
(9) Advertising goods or services with intent not to
sell them as advertised.
(10) Advertising goods or services with intent not to
supply reasonably expectable public demand unless the
advertisement discloses a limitation of quantity.
(11) Making a false or misleading statement of fact
concerning the reasons for, existence of, or amounts of , price
reductions.
(12) Knowingly failing to identify flood, water, fire,
or accidentally damaged goods as damaged goods if they are
damaged to the point of decreasing their value or rendering
the goods unfit for the ordinary purpose for which they were
purchased,; provided, that this subdivision shall not apply to
accidentally damaged new goods where the goods are
reconditioned, reclaimed, or repaired to substantially their
original condition and such fact is disclosed to the
purchaser.
(13) Knowingly making false or misleading statements of
fact concerning the need for parts, replacement, or repair
service.
(14) Misrepresenting the authority of a salesperson,
representative, or agent to negotiate the final terms of a
transaction.
(15) Disconnecting, turning back, replacing, or
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(15) Disconnecting, turning back, replacing, or
resetting the odometer of any motor vehicle so as to reduce
the number of miles indicated on the odometer gauge with the
intent of deception.
(16) Advertising of any sale by falsely representing
that a person is going out of business.
(17) After receipt of payment for goods or services,
failing to ship the goods or furnish such services within the
time advertised or otherwise represented or, if no specific
time is advertised or represented, failing to ship the goods
or furnish such services within 30 days, unless within the
applicable time period the seller provides the buyer with the
option to either cancel the sales agreement and receive a
refund of all previous payments to the seller or to extend the
date to a specific date proposed by the seller. Any refund
shall be mailed or delivered to the buyer within 10 business
days after the seller receives written notification from the
buyer of the buyer's option to cancel the sales agreement and
receive the refund.
(18) Using or employing a chain referral sales plan in
connection with the sale or offering for sale of goods,
merchandise, or anything of value, involving a sales
technique, plan, arrangement, or agreement in which the buyer
or prospective buyer is offered the opportunity to purchase
merchandise or goods and in connection with the purchase
receives the seller's promise or representation that the buyer
shall have the right to receive compensation or consideration
in any form for furnishing to the seller the names of other
prospective buyers, if the receipt of the compensation or
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prospective buyers, if the receipt of the compensation or
consideration is contingent upon the occurrence of an event
subsequent to the time the buyer purchased the goods,
merchandise, or anything of value.
(19) Establishing, promoting, or operating a pyramid
promotional scheme.
a. Nothing in this subdivision may be construed to
prohibit a plan or operation, or to define a plan or
operation, where the participants in the plan or operation
give consideration in return for the right to receive
compensation based upon purchases of goods, services, or
intangible property for personal use, consumption, or resale
if the plan or operation does not cause inventory loading and
the plan or operation implements a bona fide inventory
repurchase program.
b. A bona fide inventory repurchase program under this
subdivision is subject to the following requirements:
1. The program shall be clearly described in its
recruiting literature, sales manual, or contracts.
2. The recruiting literature, sales manual, or
contracts shall disclose any inventory that is not eligible
for repurchase under the program, including inventory that is
beyond the commercially reasonable use or shelf life period or
has been used or opened.
c. Before a repurchase of inventory is made, the entity
operating the repurchase program shall clearly describe the
inventory that is excluded from the entity's bona fide
repurchase program as seasonal, discontinued, or special
promotion products and the inventory that is not subject to
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promotion products and the inventory that is not subject to
the entity's bona fide inventory repurchase program.
(20) In connection with any seller-assisted marketing
plan, either misrepresenting the amount or extent of earnings
to result therefrom, or misrepresenting the extent or nature
of the market for the goods or services, or both, sold or
delivered in connection with the plan, or misrepresenting that
the seller of the plan will repurchase all or part of the
goods or services, or both, sold or delivered in connection
with the plan, or failing to deliver goods or services, or
both, within the time represented. As used herein,
"seller-assisted marketing plan" includes any plan, scheme, or
system in which for a consideration a buyer acquires goods or
services, or both, together with a plan, scheme, or system for
the resale of the goods or services, or both.
(21) Intentionally misrepresenting that a warranty or
guarantee confers or involves certain rights or remedies.
(22) In selling a new motor vehicle, failing to
disclose material damage to the motor vehicle as prescribed
hereafter:
a. Each manufacturer, importer, or distributor of new
motor vehicles sold or transferred to a motor vehicle dealer
in this state, shall notify the motor vehicle dealer in
writing prior to delivery of the vehicle of any material
damage to the vehicle which is known to the manufacturer,
importer, or distributor, and which was sustained or incurred
by the motor vehicle at any time after the manufacturing
process is complete but prior to delivery of the vehicle to
the dealer.
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the dealer.
b. In selling a new motor vehicle, each motor vehicle
dealer in this state shall notify the purchaser in writing at
the time of sale of any material damage to the vehicle which
is known to the motor vehicle dealer and which was sustained
or incurred by the motor vehicle at any time after the
manufacturing process is complete, but prior to delivery of
the vehicle to the purchaser.
c. For purposes of this section, "material damage"
means damage sustained or incurred by a motor vehicle, whether
corrected or uncorrected, which cost to repair exceeds three
percent of the manufacturer's suggested retail price of the
vehicle based upon the dealer's retail repair cost or the sum
of five hundred dollars ($500), whichever is greater. Damage
to tires, glass, bumpers, and in-dash audio equipment shall
not be considered in determining the cost of repair if those
components are replaced by identical manufacturer's original
equipment. The failure of a manufacturer, importer,
distributor, or motor vehicle dealer to give notice of damage
below the threshold constituting material damage shall not
provide grounds for revocation of the sale nor shall such
failure constitute a material misrepresentation or omission of
fact.
d. Each manufacturer, importer, or distributor of new
motor vehicles shall indemnify and hold harmless the motor
vehicle dealer obtaining a vehicle from the manufacturer,
importer, or distributor from and against any liability,
including reasonable attorneys' attorney fees, which the motor
vehicle dealer may have to the purchaser of the vehicle as a
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vehicle dealer may have to the purchaser of the vehicle as a
result of damage to the new motor vehicle which was known to
the manufacturer, importer, or distributor, which occurred
prior to delivery of the vehicle to the dealer, and which was
not disclosed in writing to the dealer prior to delivery of
the vehicle. This indemnity obligation of the manufacturer,
importer, or distributor shall apply regardless of whether the
damage constitutes material damage.
(23) Affixing an Alabama revenue stamp, including local
municipal or county stamps, to, or upon, any package of
cigarettes, or selling or holding for sale any package of
cigarettes to which an Alabama revenue stamp, including local
municipal or county stamps, has been affixed, if:
a. The package differs in any respect with the
requirements of the Federal Cigarette Labeling and Advertising
Act (15 U.S.C. § 1331, et seq.), for the placement of labels,
warnings, or any other information upon a package of
cigarettes that is to be sold within the United States;
b. The package is labeled "For Export Only", "U.S. Tax
Exempt," "For Use Outside U.S.," or similar wording indicating
that the manufacturer did not intend that the product be sold
in the United States;
c. The package, or a package containing individually
stamped packages, has been altered by adding or deleting the
wording, labels, or warnings described in paragraph a. or b.
of this subdivision;
d. With respect to the cigarettes, any person is not in
compliance with 15 U.S.C. § 1335a (relating to submission of
ingredient information to federal authorities), 19 U.S.C. §
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ingredient information to federal authorities), 19 U.S.C. §
1681-1681b (relating to imports of certain cigarettes), 26
U.S.C. § 5754 (relating to previously exported tobacco
products), or any other federal law or implementing federal
regulations; or
e. The package in any way violates federal trademark or
copyright laws.
For the purposes of this subdivision, the term
"package" means a pack, carton, or container of any kind in
which cigarettes are offered for sale, sold, or otherwise
distributed, or intended for distribution, to consumers. Also
for the purposes of this subdivision, the term "Alabama
revenue stamp" means the stamp or stamps by the use of which
the tax levied under Article 1 of Chapter 25 of Title 40 , is
paid.
(24) Engaging in the sale, distribution, possession,
acquisition, importation, or transportation of any cigarettes
that do not comply with all applicable requirements imposed by
or pursuant to federal law and federal implementing
regulations.
(25) Engaging in a scheme or artifice to defraud by
telephone communication. For purposes of this subdivision, a
"scheme or artifice to defraud" means a systematic, ongoing
course of conduct with the specific intent to defraud one or
more persons in order to obtain property from that person by a
telephone communication; and "telephone communication" means
the transmission of information by the use of the telephone,
with the specific intent of defrauding a person by a material
misrepresentation and obtaining property from that person as a
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misrepresentation and obtaining property from that person as a
result of the fraud. Puffing or puffery does not constitute a
scheme or artifice to defraud.
(26) Making any communication by telephone directly to
another person which offers to the other person a gift, award,
or prize, where the person making the communication has actual
knowledge at the time of making the communication that the
communication was materially false and the person making the
communication specifically intended to deprive the other
person of real or personal property as a result of the false
communication.
(27) Engaging in a commercial transaction or trade
practice with a consumer in which the consumer communicates or
otherwise interacts with a chatbot, artificial intelligence
agent, avatar, or any other computer technology that engages
in a textual or aural conversation with the consumer and that
may mislead or deceive a reasonable person to believe that
they are communicating or interacting with a human and either
of the following:
a. The consumer is not notified in a clear and
conspicuous manner that the consumer is communicating or
interacting with a non-human.
b. The consumer may otherwise reasonably believe that
they are communicating or interacting with a human.
(27)(28) Engaging in any other unconscionable, false,
misleading, or deceptive act or practice in the conduct of
trade or commerce."
Section 2. This act shall become effective on October
1, 2025.
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