82R17939 JE-D
By: Hartnett H.B. No. 972
Substitute the following for H.B. No. 972:
By: Quintanilla C.S.H.B. No. 972
A BILL TO BE ENTITLED
AN ACT
relating to the cancellation of travel club membership agreements;
providing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 12, Business & Commerce Code, is amended by
adding Chapter 601A to read as follows:
CHAPTER 601A. CANCELLATION OF AGREEMENT FOR TRAVEL CLUB MEMBERSHIP
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 601A.001. DEFINITIONS. In this chapter:
(1) "Purchaser" means an individual who enters into an
agreement with a seller to purchase a travel club membership.
(2) "Seller" means a person who offers to sell or sells
a travel club membership.
(3) "Travel club membership" means a membership that
gives its members the right to purchase or obtain travel services
from or through a seller.
(4) "Travel service" means the arranging or booking
of:
(A) a vacation or travel package;
(B) a reservation for rental of a motor vehicle;
(C) a ticket for domestic or foreign travel by
any mode of transportation; or
(D) a hotel or other lodging.
Sec. 601A.002. APPLICABILITY OF CHAPTER. (a) This chapter
applies only to an agreement for the purchase of a travel club
membership in which:
(1) the seller or the seller's agent engages in a
personal solicitation of a sale to an individual; and
(2) the agreement is for consideration that exceeds
$25, payable in installments or in cash.
(b) This chapter does not apply to an agreement relating to:
(1) a timeshare plan that is in compliance with
Chapter 221, Property Code; or
(2) the sale of a product or service or a program
related to, offered in conjunction with, or used to promote the
timeshare plan.
[Sections 601A.003-601A.050 reserved for expansion]
SUBCHAPTER B. PURCHASER'S RIGHT TO CANCEL AGREEMENT; REQUIRED
NOTICES
Sec. 601A.051. PURCHASER'S RIGHT TO CANCEL AGREEMENT FOR
TRAVEL CLUB MEMBERSHIP. (a) In addition to any other rights or
remedies available, a purchaser may cancel an agreement for a
travel club membership not later than midnight of the fifth
business day after the date the purchaser signs the agreement.
(b) A seller may retain payments made by the purchaser for
specific travel services used in connection with a travel club
membership agreement before the date of the cancellation period
prescribed by Subsection (a).
Sec. 601A.052. NOTICE OF PURCHASER'S RIGHT TO CANCEL
REQUIRED. (a) A seller must provide a purchaser with a copy of an
agreement for a travel club membership at the time of the
agreement's execution.
(b) The copy of the agreement provided under Subsection (a)
must:
(1) be in the same language as that principally used in
the oral sales presentation;
(2) contain the date of the agreement;
(3) contain the name and address of the seller; and
(4) contain a statement:
(A) in immediate proximity to the space reserved
in the agreement for the signature of the purchaser; and
(B) in at least 10-point boldfaced font in
substantially the following form:
"YOU, THE PURCHASER, MAY CANCEL THIS AGREEMENT FOR TRAVEL
CLUB MEMBERSHIP AT ANY TIME BEFORE MIDNIGHT OF THE FIFTH BUSINESS
DAY AFTER THE DATE YOU SIGN THIS AGREEMENT. SEE THE ATTACHED NOTICE
OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT."
Sec. 601A.053. COMPLETED CANCELLATION FORM REQUIRED. (a)
A seller must attach to the copy of a travel club membership
agreement a completed notice of cancellation form in duplicate.
The form must:
(1) be easily detachable;
(2) be in the same language as the agreement; and
(3) contain the following information and statements
in at least 10-point boldfaced font:
"NOTICE OF CANCELLATION
_________________
(enter date of agreement)
"YOU MAY CANCEL THIS AGREEMENT FOR TRAVEL CLUB MEMBERSHIP,
WITHOUT ANY PENALTY OR OBLIGATION, WITHIN FIVE BUSINESS DAYS AFTER
THE ABOVE DATE UNLESS YOU HAVE ALREADY USED ANY TRAVEL SERVICES
PROVIDED IN CONNECTION WITH THIS AGREEMENT.
"IF YOU HAVE ALREADY USED ANY TRAVEL SERVICES PROVIDED IN
CONNECTION WITH THIS AGREEMENT, YOU MAY STILL CANCEL THIS
TRANSACTION WITHIN FIVE BUSINESS DAYS AFTER THE DATE OF THE
AGREEMENT, BUT YOU ARE NOT ENTITLED TO A REFUND OF ANY PRIOR
PAYMENTS MADE FOR THE SPECIFIC TRAVEL SERVICES USED.
"IF YOU CANCEL, ANY PAYMENTS MADE BY YOU UNDER THIS AGREEMENT
THAT WERE NOT FOR SPECIFIC TRAVEL SERVICES USED WILL BE RETURNED
WITHIN 10 BUSINESS DAYS FOLLOWING RECEIPT BY THE SELLER OF YOUR
CANCELLATION NOTICE.
"TO CANCEL THIS AGREEMENT, MAIL OR DELIVER A SIGNED AND DATED
COPY OF THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE,
INCLUDING BY E-MAIL OR FACSIMILE, TO (name of seller), AT (address,
e-mail address, and fax number of seller's place of business) NOT
LATER THAN MIDNIGHT OF (date).
I HEREBY CANCEL THIS AGREEMENT.
____
DATE
______________________
PURCHASER'S SIGNATURE."
(b) A seller may not fail to include on both copies of the
form described by Subsection (a):
(1) the name of the seller;
(2) the address, e-mail address, and fax number of the
seller's place of business;
(3) the date of the agreement; and
(4) a date not earlier than the fifth business day
after the date of the agreement by which the purchaser must give
notice of cancellation.
[Sections 601A.054-601A.100 reserved for expansion]
SUBCHAPTER C. PROHIBITED ACTS BY SELLER
Sec. 601A.101. WAIVER OF RIGHTS. A seller may not include
in an agreement for a travel club membership a waiver of any of the
rights to which a purchaser is entitled under this chapter.
Sec. 601A.102. FAILURE TO INFORM OR MISREPRESENTATION OF
RIGHT TO CANCEL. A seller may not:
(1) at the time the purchaser signs the agreement for a
travel club membership fail to inform the purchaser orally of the
right to cancel the agreement; or
(2) misrepresent in any manner the purchaser's right
to cancel.
Sec. 601A.103. FAILURE TO TAKE CERTAIN ACTIONS FOLLOWING
RECEIPT OF NOTICE OF CANCELLATION. A seller may not:
(1) fail or refuse to honor a valid cancellation under
this chapter by a purchaser; or
(2) fail before the end of the 10th business day after
the date the seller receives a valid notice of cancellation to:
(A) refund all payments made under the agreement
that were not for specific travel services used before the
cancellation period; or
(B) cancel and return any negotiable instrument
executed by the purchaser in connection with the agreement for a
travel club membership.
[Sections 601A.104-601A.150 reserved for expansion]
SUBCHAPTER D. ENFORCEMENT
Sec. 601A.151. CERTAIN AGREEMENTS VOID. An agreement
entered into in violation of this chapter is void.
Sec. 601A.152. LIABILITY FOR DAMAGES. A seller who
violates this chapter is liable to the purchaser for:
(1) actual damages suffered by the purchaser as a
result of the violation;
(2) reasonable attorney's fees; and
(3) court costs.
Sec. 601A.153. DECEPTIVE TRADE PRACTICE. A violation of
this chapter is a false, misleading, or deceptive act or practice as
defined by Section 17.46(b). In addition to any remedy under this
chapter, a remedy under Subchapter E, Chapter 17, is also available
for a violation of this chapter.
Sec. 601A.154. INJUNCTION. If the attorney general
believes that a person is violating or about to violate this
chapter, the attorney general may bring an action in the name of the
state to restrain or enjoin the person from violating this chapter.
SECTION 2. The change in law made by this Act applies only
to an agreement for a travel club membership entered into on or
after the effective date of this Act. An agreement for a travel
club membership that is entered into before the effective date of
this Act is governed by the law in effect on the date the agreement
was entered into, and the former law is continued in effect for that
purpose.
SECTION 3. This Act takes effect September 1, 2011.