Connecticut 2017 Regular Session

Connecticut Senate Bill SB00822 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	General Assembly Raised Bill No. 822
2	2	January Session, 2017 LCO No. 4015
3	3	04015_______GL_
4	4	Referred to Committee on GENERAL LAW
5	5	Introduced by:
6	6	(GL)
7	7
8	8	General Assembly
9	9
10	10	Raised Bill No. 822
11	11
12	12	January Session, 2017
13	13
14	14	LCO No. 4015
15	15
16	16	04015_______GL_
17	17
18	18	Referred to Committee on GENERAL LAW
19	19
20	20	Introduced by:
21	21
22	22	(GL)
23	23
24	24	AN ACT CONCERNING CONSUMER CONTRACTS.
25	25
26	26	Be it enacted by the Senate and House of Representatives in General Assembly convened:
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28	28	Section 1. Section 42-150u of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017):
29	29
30	30	(a) No provision in a written contract for the purchase or lease of goods or services primarily for personal, family or household purposes that provides for the payment of liquidated damages in the event of a breach of the contract shall be enforceable unless (1) the contract contains a statement in boldface type at least twelve points in size immediately following such liquidated damages provision stating "I ACKNOWLEDGE THAT THIS CONTRACT CONTAINS A LIQUIDATED DAMAGES PROVISION", and (2) the person against whom such provision is to be enforced signs such person's name or writes such person's initials next to such statement. Nothing in this section shall validate a clause that is a penalty clause or is otherwise invalid under the law of this state.
31	31
32	32	(b) If a consumer who is sixty years of age or more dies during the term of a consumer contract or consumer lease, the consumer contract or consumer lease shall be deemed terminated upon the consumer's death and any penalty provision contained within the contract or lease regarding early termination shall be unenforceable and unreasonable pursuant to section 42-421.
33	33
34	34	[(b)] (c) The provisions of subsection (a) of this section shall not apply to (1) contracts between a consumer and an agency of the state or any political subdivision of the state or of the federal government, (2) negotiable instruments, (3) contract provisions for late fees, prepayment penalties or default interest rates, (4) contracts originated or held by an institution, or any subsidiary or affiliate of such institution, that is regulated by the Department of Banking or by a federal bank regulatory agency, provided, in the case of a contract originated or held by a subsidiary or affiliate of such institution, the subject matter of the contract is an activity that is financial in nature or incidental to such an activity as described in the Bank Holding Company Act, 12 USC 1843(k)(4), and (5) contracts originated or held by a person, firm or corporation licensed by the Department of Motor Vehicles in accordance with the provisions of section 14-52 or 14-67a.
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36	36	Sec. 2. Section 42-152 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017):
37	37
38	38	(a) Every consumer contract entered into after June 30, 1980, shall be written in plain language. A consumer contract is written in plain language if it: [meets] (1) Meets either the plain language tests of subsection (b) of this section, [or] (2) meets the alternate objective tests of subsection (c) of this section, or (3) for a consumer contract entered into on or after July 1, 2017, with a consumer who is sixty-five years of age or older, meets the requirements of subsection (d) of this section. A consumer contract need not meet the tests of both subsections.
39	39
40	40	(b) A consumer contract is written in plain language if it substantially complies with all of the following tests:
41	41
42	42	(1) It uses short sentences and paragraphs; and
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44	44	(2) It uses everyday words; and
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46	46	(3) It uses personal pronouns, the actual or shortened names of the parties to the contract, or both, when referring to those parties; and
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48	48	(4) It uses simple and active verb forms; and
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50	50	(5) It uses type of readable size; and
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52	52	(6) It uses ink which contrasts with the paper; and
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54	54	(7) It heads sections and other subdivisions with captions which are in boldface type or which otherwise stand out significantly from the text; and
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56	56	(8) It uses layout and spacing which separate the paragraphs and sections of the contract from each other and from the borders of the paper; and
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58	58	(9) It is written and organized in a clear and coherent manner.
59	59
60	60	(c) A consumer contract is also written in plain language if it fully meets all of the following tests, using the procedures described in section 42-158:
61	61
62	62	(1) The average number of words per sentence is less than twenty-two; and
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64	64	(2) No sentence in the contract exceeds fifty words; and
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66	66	(3) The average number of words per paragraph is less than seventy-five; and
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68	68	(4) No paragraph in the contract exceeds one hundred fifty words; and
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70	70	(5) The average number of syllables per word is less than 1.55; and
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72	72	(6) It uses personal pronouns, the actual or shortened names of the parties to the contract, or both, when referring to those parties; and
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74	74	(7) It uses no typeface of less than eight points in size; and
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76	76	(8) It allows at least three-sixteenths of an inch of blank space between each paragraph and section; and
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78	78	(9) It allows at least one-half of an inch of blank space at all borders of each page; and
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80	80	(10) If the contract is printed, each section is captioned in boldface type at least ten points in size. If the contract is typewritten, each section is captioned and the captions are underlined; and
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82	82	(11) It uses an average length of line of no more than sixty-five characters.
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84	84	(d) Senior protection test. A consumer contract for consumers sixty-five years of age or older is written in plain language if it fully meets all of the following tests:
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86	86	(1) The font size is larger than 10 points;
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88	88	(2) The contract expressly allows consumers to receive notifications by mail or electronic mail, at the discretion of the consumer; and
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90	90	(3) The right to cancellation is not less than five days.
91	91
92	92	Sec. 3. Section 42-280 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017):
93	93
94	94	As used in this section and sections [42-280] 42-281 to 42-283, inclusive:
95	95
96	96	(1) "Diet company" means any person, except a hospital, engaged in the business of selling a product or service, the primary purpose of which is to cause weight loss in the person who uses the product or service, but does not include (A) any retailer whose sales of the diet product or service is less than fifty per cent of the total sales of the establishment, or (B) any health club or other business whose primary focus is on fitness;
97	97
98	98	(2) "Weight loss company" means any person, except a hospital, that sells a product or service, the primary purpose of which is to cause weight loss in the person who uses the product or service;
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100	100	[(2)] (3) "Consumer" means a person who uses a diet company to cause weight loss; [and]
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102	102	[(3)] (4) "Diet program" means any service offered by a diet company to a consumer, the purpose of which is to reduce the weight of the consumer primarily through a restricted diet; and
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104	104	(5) "Weight loss program" means any service offered by a diet company or a weight loss company, the purpose of which is to reduce weight of a person through a restricted diet, supplements, additional exercise, electric stimulation or pressure point treatment.
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106	106	Sec. 4. (NEW) (Effective July 1, 2017) No diet company, weight loss company or person advertising or soliciting for any diet program or weight loss program shall make any guarantee, promise or claim that weight loss will occur for a person or a certain number of pounds will be lost by a person, unless the person advertising or soliciting possesses and relies upon competent and reliable scientific evidence substantiating the representation and uses a representative sampling of consumers who have properly used the product or service under the person's direction for more than two weeks, but not including consumers who were unable to use the product or service for the recommended period of time, due to illness, pregnancy or change of residence.
107	107
108	108	Sec. 5. Section 42-321 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017):
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110	110	(a) Each contract for social referral services shall provide that such contract may be cancelled within three business days after the date of receipt by the buyer of a copy of the written contract or three business days after the social referral service is made available to the buyer, whichever is later, by written notice, delivered by certified or registered United States mail to the seller at an address which shall be specified in the contract.
111	111
112	112	(b) (1) In every contract for social referral services, the seller shall furnish to the buyer a fully completed copy of such contract at the time of its execution, which shows the date of the transaction and contains the name and address of the seller, and in the immediate proximity to the space reserved in the contract for the signature of the buyer and in not less than ten-point bold face type, a statement in substantially the following form:
113	113
114	114	"YOU, THE BUYER, MAY CANCEL THIS CONTRACT AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER YOUR RECEIPT OF THIS CONTRACT OR AFTER THE SOCIAL REFERRAL SERVICE HAS BEEN MADE AVAILABLE FOR YOUR USE, WHICHEVER IS LATER. SEE THE ATTACHED NOTICE OF CANCELLATION FOR AN EXPLANATION OF THIS RIGHT."
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116	116	(2) At the time the buyer signs the social referral service contract, a statement captioned "NOTICE OF CANCELLATION" shall be contained in the contract and shall contain, in not less than ten-point bold face type, the following information and statements:
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118	118	"NOTICE OF CANCELLATION
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120	120	.... (Date of Transaction)
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122	122	YOU MAY CANCEL THIS CONTRACT, WITHOUT ANY PENALTY OR OBLIGATION, WITHIN THREE BUSINESS DAYS AFTER YOUR RECEIPT OF THIS CONTRACT OR AFTER THE SOCIAL REFERRAL SERVICE HAS BEEN MADE AVAILABLE FOR YOUR USE, WHICHEVER IS LATER BY MAILING THIS SIGNED AND DATED NOTICE OF CANCELLATION BY CERTIFIED OR REGISTERED UNITED STATES MAIL TO THE SELLER AT THE FOLLOWING ADDRESS: .... . IF YOU CANCEL, ANY PAYMENTS MADE BY YOU UNDER THE CONTRACT WILL BE RETURNED WITHIN TEN BUSINESS DAYS FOLLOWING RECEIPT BY THE SELLER OF YOUR CANCELLATION NOTICE."
123	123
124	124	(3) All moneys paid pursuant to any contract for social referral services shall be refunded within ten business days of receipt of the notice of cancellation.
125	125
126	126	(4) No contract for social referral services shall charge more than the maximum fee established by regulations adopted by the commissioner pursuant to subsection (c) of this section. Services to be rendered to the purchaser under the contract may extend over a period not to exceed two years from the date the contract is entered into.
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128	128	(5) Each contract for social referral services that requires payment by the purchaser of such services of a total amount in excess of twenty-five dollars shall provide that the seller of such services furnish to the purchaser a specified number of social referrals per month.
129	129
130	130	(6) Each contract for social referral services that requires payment by the purchaser of such services of a total amount in excess of twenty-five dollars shall provide that, in the event that the seller of such services does not furnish to the purchaser the specified certain number of social referrals for two or more successive months, the purchaser shall have the option to cancel the contract and to receive a refund of all moneys paid pursuant to the contract and the seller shall be entitled to retain as a cancellation fee fifteen per cent of the cash price of the contract or a pro rata amount for the number of referrals furnished to the purchaser, whichever is greater.
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132	132	(c) The Commissioner of Consumer Protection shall adopt regulations, in accordance with the provisions of chapter 54, to establish maximum fees for social referral services contracts.
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137	137	This act shall take effect as follows and shall amend the following sections:
138	138	Section 1 July 1, 2017 42-150u
139	139	Sec. 2 July 1, 2017 42-152
140	140	Sec. 3 July 1, 2017 42-280
141	141	Sec. 4 July 1, 2017 New section
142	142	Sec. 5 July 1, 2017 42-321
143	143
144	144	This act shall take effect as follows and shall amend the following sections:
145	145
146	146	Section 1
147	147
148	148	July 1, 2017
149	149
150	150	42-150u
151	151
152	152	Sec. 2
153	153
154	154	July 1, 2017
155	155
156	156	42-152
157	157
158	158	Sec. 3
159	159
160	160	July 1, 2017
161	161
162	162	42-280
163	163
164	164	Sec. 4
165	165
166	166	July 1, 2017
167	167
168	168	New section
169	169
170	170	Sec. 5
171	171
172	172	July 1, 2017
173	173
174	174	42-321
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176	176	Statement of Purpose:
177	177
178	178	To protect seniors who enter into consumer contracts and to protect persons who enter into weight loss program and social referral service contracts.
179	179
180	180	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]