HLS 12RS-415 ORIGINAL
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are additions.
Regular Session, 2012
HOUSE BILL NO. 604
BY REPRESENTATIVE HARRISON
COMMERCE: Makes it an unfair trade practice to automatically bill a consumer, enter into
automatic renewal contracts with a consumer, or bill a consumer for a third party
without express written authorization
AN ACT1
To enact R.S. 51:1422 and to repeal R.S. 9:2716, relative to unfair and deceptive trade2
practices; to prohibit automatic billing, automatic contract renewal, and third-party3
billing without express authorization; to repeal provisions relative to contracts with4
automatic renewal clauses; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 51:1422 is hereby enacted to read as follows: 7
ยง1422. Unfair or deceptive trade practices; automatic billing; automatic contract8
renewal; third-party billing; express authorization; violations9
A. For purposes of this Section, the following terms shall have the following10
meanings:11
(1) "Automatic renewal contract" means any contract that automatically12
renews unless the consumer cancels the contract.13
(2) "Billing service provider" means any person or entity offering or14
providing products or services for compensation or monetary gain and who, in15
addition to its own billing, bills a consumer for services of a third-party service16
provider.17
(3) "Consumer" means any person or entity who uses, purchases, or leases18
products or services.19 HLS 12RS-415 ORIGINAL
HB NO. 604
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(4) "Express authorization" means affirmative action by a consumer in the1
form of a written authorization.2
(5) "Product or service provider" means any person or entity selling, leasing,3
providing, or offering to sell, lease, or provide any product or service to a consumer4
for compensation or monetary gain.5
(6) "Third-party service provider" means a person or entity, other than the6
billing service provider, that offers or provides products or services for monetary7
gain and who originates the charge or charges that are billed to the consumer through8
the billing service provider.9
(7) "Written authorization" means authorization in the form of a letter or a10
signed contract.11
B. It shall be unlawful for any product or service provider to automatically12
bill a consumer, to enter into an automatic renewal contract with a consumer, or to13
act as a billing service provider for a third-party service provider without first14
obtaining the express authorization from the consumer.15
C. All disputed charges by a product or service provider or by a third-party16
service provider on a consumer's account for which no express authorization is17
available are presumed to be unauthorized.18
D. The express authorization of the customer shall be maintained by the19
product or service provider, the billing service provider, and the third-party service20
provider for a minimum of two years or for the duration of the contract, whichever21
is longer.22
E. Every billing service provider shall provide a method at no charge to the23
consumer to allow the consumer to place restrictions on the consumer's account that24
block billing by third-party service providers and shall inform the consumer of the25
option to block billing. Such blocking method shall allow the consumer to add or26
remove the block quickly and easily.27 HLS 12RS-415 ORIGINAL
HB NO. 604
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are additions.
F. Any violation of this Section shall be a deceptive and unfair trade practice1
and shall subject the violator to any and all actions and penalties provided for in this2
Chapter.3
G. This Section shall not apply to:4
(1) The Louisiana Rental-Purchase Agreement Act as provided in R.S.5
9:3351 through 3362.6
(2) Banks, trust companies, savings and loan associations, savings banks,7
credit unions, finance and credit companies, industrial loan companies, or any other8
financial institution licensed or organized under the laws of any state or the United9
States, or any foreign bank maintaining a branch or agency licensed under the laws10
of the United States, or any subsidiary or affiliate thereof.11
(3) Insurers licensed under Title 22 of the Louisiana Revised Statutes of12
1950.13
Section 2. R.S. 9:2716 is hereby repealed in its entirety.14
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Harrison HB No. 604
Abstract: Prohibits any product or service provider from automatically billing, entering
into an automatic renewal contract, or billing a consumer for a third-party service
provider without the written express authorization of the consumer.
Proposed law prohibits any product or service provider from automatically billing, entering
into an automatic renewal contract, or billing a consumer for a third-party service provider
without first obtaining the written authorization of the consumer through either a letter or
a signed contract.
Proposed law specifies that charges from a third-party service provider placed on a
consumer's account without written authorization are presumed to be unauthorized. Requires
the written authorization to be maintained by the billing provider and the third-party service
provider the longer of two years or the duration of the contract.
Proposed law requires billing service providers to provide a method to the consumer for
blocking third-party billing at no cost to the consumer. Requires that the consumer be
informed of the option to block billing and requires that the consumer be allowed to add or
remove the block quickly and easily.
Proposed law subjects violators to present law actions and penalties enforceable by the
attorney general (and district attorneys) for deceptive and unfair trade practices, including HLS 12RS-415 ORIGINAL
HB NO. 604
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but not limited to restraining prohibited actions, compensation or restitution for aggrieved
consumers, suspension of licenses or franchise agreements, and imposition of civil penalties.
Proposed law provides exceptions for rental-purchase agreements, financial institutions, and
licensed insurers.
Proposed law repeals present law allowing automatic renewal clauses in contracts unless
the automatic renewal clause is disclosed clearly and conspicuously and specifies how to
cancel. Repeals exceptions for contracts with automatic renewal clauses entered into before
Jan. 1, 2011, and those that allow for cancellation by written notice within 30 days or within
one month after the initial period has expired.
(Adds R.S. 51:1422; Repeals R.S. 9:2716)