GREEN SHEET REDIGEST
HB 340 2016 Regular Session Stokes
(KEYWORD, SUMMARY, AND DIGEST as amended by Senate committee
amendments)
CONSUMERS/PROTECTION: Provides relative to unsolicited offers to sell an
extended service agreement relative to a motor vehicle
DIGEST
Proposed law provides relative to an unsolicited offer, made by mail or common carrier, to
sell to another an extended service agreement relative to a motor vehicle.
Proposed law provides that if the unsolicited offer is in writing, it shall state at the top of
each page "THIS IS AN ADVERTISEMENT TO PURCHASE AN EXTENDED SERVICE
AGREEMENT ON A MOTOR VEHICLE. IT IS NOT AN OFFICIAL DOCUMENT." The
statement shall be in conspicuous and legible type that is not smaller than fourteen-point font
and is in contrast by typography, layout, or color with any other printing on the writing.
Proposed law provides that if the unsolicited offer is oral, it shall begin and end with the
statement: "THIS IS AN ADVERTISEMENT TO PURCHASE AN EXTENDED SERVICE
AGREEMENT ON A MOTOR VEHICLE. IT IS NOT AN OFFICIAL NOTIFICATION OR
DEMAND FOR ACTION."
Proposed law provides that a violation of its provisions shall constitute a deceptive and
unfair trade practice and subject the violator to any and all actions and penalties authorized
for such violations. Further provides that each offer in violation of the proposed law shall be
considered a separate offense.
Proposed law defines "extended service agreement" to include any vehicle mechanical
breakdown insurance policy, vehicle service contract sold by an independent payment
provider or their agent, or vehicle component coverage contract. "Unsolicited offer" shall not
include an offer made subsequent to a prior personal contact that included a meaningful
exchange between the offeror and offeree.
Proposed law provides exception from its provisions for any manufacturer, distributor, or
dealer of motor vehicles as defined in R.S. 32:1252, any vehicle mechanical breakdown
insurer licensed pursuant to R.S. 22:362, any person acting pursuant to an agreement of and
on behalf of such manufacturer, distributor, dealer, or licensed vehicle mechanical
breakdown insurer, any entity licensed pursuant to R.S. 6:969.37, or any FDIC insured
depository financial institution operating with a main office or one or more branches in this
state, or their subsidiaries or affiliates.
(Adds R.S. 51:1422)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Commerce to the
original bill
1. Delete references to "warranties" thereby making "extended service agreements"
the sole focus of proposed law.
2. Add the prohibitions to sell or solicit for sale by mail or telephone any vehicle
mechanical breakdown insurance policy or vehicle component coverage contract.
Page 1 of 2
Prepared by Jerry G. Jones. 3. Exempt from proposed law motor vehicle distributors, vehicle mechanical
breakdown insurers, and those acting on behalf of a manufacturer, distributor,
dealer, or vehicle mechanical breakdown insurer.
The House Floor Amendments to the engrossed bill
1. Exempt from proposed law any entity licensed pursuant to present law, or any
FDIC insured depository financial institution operating with a main office or one
or more branches in this state, or their subsidiaries or affiliates.
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Commerce, Consumer
Protection, and International Affairs to the reengrossed bill
1. Revised language to provide requirements for unsolicited offers to sell an
extended service agreement relative to a motor vehicle.
Page 2 of 2
Prepared by Jerry G. Jones.