AN ACT LIMITING USE OF CHECKS TO CREATE BINDING AGREEMENTS ON CONSUMERS.

This bill sets conditions certain consumer agreements must meet to be binding, valid, and enforceable. The bill applies to agreements to purchase, lease, or rent goods or services when the consumer makes the agreement by endorsing a check from a marketer. Specifically, the agreement is valid only if the consumer signed a separate written document that contains certain required provisions and notices and fully discloses the terms of the agreement, including the payment method, in plain language. According to the bill, any check sent to a consumer by a marketer without such written contract is an unconditional gift to the consumer without any obligation by the consumer to the marketer. The marketer must provide the consumer with a copy of the contract for use as proof of the terms of the agreement. A violation of the bill is an unfair and deceptive trade practice under the Connecticut Unfair Trade Practices Act.

According to the bill, (1) a consumer is an actual or prospective purchaser, lessee, or recipient of goods or services; (2) a marketer is any person who initiates the sale, lease, or rental by use of a written notice, such as an advertisement; and (3) a person is a natural person or a legal entity.

1. the marketer's name, address, and telephone number and a telephone number or email address for the consumer to opt out of future solicitations;

2. a detailed description of the goods or services being sold, leased, or rented and a list of all prices or fees being charged, including those for handling, shipping, and delivery;

3. the transaction date;

4. in 10-point boldface type, in a space immediately preceding the space allotted for the consumer's signature, the following statement: “YOU ARE NOT OBLIGATED TO PAY ANY MONEY UNLESS YOU SIGN THIS CONTRACT AND RETURN IT TO THE ADDRESS CONTAINED IN THIS CONTRACT; ” and

5. all other material terms and conditions.

Additionally, if the transaction involves a trial offer or introductory rate, the contract must include a clear and conspicuous written notice that the recipient may cancel when the offer or rate ends. The notice must include the procedure for cancelling. If the transaction involves an automatic renewal, the contract must contain a clear and conspicuous notice that the recipient may cancel and must include the procedure for doing so.

The law prohibits businesses from engaging in unfair and deceptive acts or practices. CUTPA allows the Department of Consumer Protection commissioner to issue regulations defining what constitutes an unfair trade practice, investigate complaints, issue cease and desist orders, order restitution in cases involving less than $ 5,000, enter into consent agreements, ask the attorney general to seek injunctive relief, and accept voluntary statements of compliance. The act also allows individuals to sue. Courts may issue restraining orders; award actual and punitive damages, costs, and reasonable attorneys fees; and impose civil penalties of up to $ 5,000 for willful violations and $ 25,000 for violation of a restraining order.

The law requires all consumer contracts, defined as those having a value of $ 25,000 or less or to lease a residence, to be written in plain language and establishes two alternative tests for determining if the requirement has been satisfied. The subjective test requires the contracts to meet nine standards, such as using short sentences and paragraphs, everyday words, and readable type. The objective test has 11 standards, such as limiting the number of words per sentence to 50 and words per paragraph to 150, limiting the average number of syllables per word to less than 1. 55, and prohibiting type face smaller than eight points (CGS § 42-152).

Yea

Nay

(03/04/2008)