H. B. 2958
(By Delegate Hrutkay (By Request))
[Introduced February 11, 2003; referred to the
Committee on the Judiciary then Finance.]
A BILL to amend and reenact section one hundred two, article six,
chapter forty-six-a of the code of West Virginia, one thousand
nine hundred thirty-one, as amended; and to further amend said
article by adding thereto a new section, designated section
one hundred eleven, all relating to disclosure in credit card
applications and solicitation; and creating a credit card
"do-not-solicit" list.
Be it enacted by the Legislature of West Virginia:
That section one hundred two, article six, chapter forty-six-a
of the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted; and that said article be
further amended by adding thereto a new section, designated section
one hundred eleven, all to read as follows:
ARTICLE 6. GENERAL CONSUMER PROTECTION.
§46A-6-102. Definitions.
When used in this article the following words, terms and
phrases, and any variations thereof required by the context, shall
have the meaning ascribed to them in this article, except where the
context indicates a different meaning:
(a) "Advertisement" means the publication, dissemination or
circulation of any matter, oral or written, including labeling,
which tends to induce, directly or indirectly, any person to enter
into any obligation, sign any contract, or acquire any title or
interest in any goods or services and includes every word device to
disguise any form of business solicitation by using such terms as
"renewal," "invoice," "bill," "statement" or "reminder," to create
an impression of existing obligation when there is none, or other
language to mislead any person in relation to any sought-after
commercial transaction.
(b) "Consumer" means a natural person to whom a sale or lease
is made in a consumer transaction, and a "consumer transaction"
means a sale or lease to a natural person or persons for a
personal, family, household or agricultural purpose.
(c) "Merchantable" means, in addition to the qualities
prescribed in section three hundred fourteen, article two, chapter forty-six of this code, that the goods conform in all material
respects to applicable state and federal statutes and regulations
establishing standards of quality and safety of goods and, in the
case of goods with mechanical, electrical or thermal components,
that the goods are in good working order and will operate properly
in normal usage for a reasonable period of time.
(d) "Sale" includes any sale, offer for sale or attempt to
sell any goods for cash or credit or any services or offer for
services for cash or credit.
(e) "Trade" or "commerce" means the advertising, offering for
sale, sale or distribution of any goods or services and shall
include any trade or commerce, directly or indirectly, affecting
the people of this state.
(f) "Unfair methods of competition and unfair or deceptive
acts or practices" means and includes, but is not limited to, any
one or more of the following:
(1) Passing off goods or services as those of another;
(2) Causing likelihood of confusion or of misunderstanding as
to the source, sponsorship, approval or certification of goods or
services;
(3) Causing likelihood of confusion or of misunderstanding as to affiliation, connection or association with, or certification by
another;
(4) Using deceptive representations or designations of
geographic origin in connection with goods or services;
(5) Representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits or
quantities that they do not have, or that a person has a
sponsorship, approval, status, affiliation or connection that he or
she does not have;
(6) Representing that goods are original or new if they are
deteriorated, altered, reconditioned, reclaimed, used or
secondhand;
(7) Representing that goods or services are of a particular
standard, quality or grade, or that goods are of a particular style
or model, if they are of another;
(8) Disparaging the goods, services or business of another by
false or misleading representation of fact;
(9) Advertising goods or services with intent not to sell them
as advertised;
(10) Advertising goods or services with intent not to supply
reasonably expectable public demand, unless the advertisement discloses a limitation of quantity;
(11) Making false or misleading statements of fact concerning
the reasons for, existence of or amounts of price reductions;
(12) Engaging in any other conduct which similarly creates a
likelihood of confusion or of misunderstanding;
(13) The act, use or employment by any person of any
deception, fraud, false pretense, false promise or
misrepresentation, or the concealment, suppression or omission of
any material fact with intent that others rely upon such
concealment, suppression or omission, in connection with the sale
or advertisement of any goods or services, whether or not any
person has in fact been misled, deceived or damaged thereby;
(14) Advertising, printing, displaying, publishing,
distributing or broadcasting, or causing to be advertised, printed,
displayed, published, distributed or broadcast in any manner, any
statement or representation with regard to the sale of goods or the
extension of consumer credit including the rates, terms or
conditions for the sale of such goods or the extension of such
credit, which is false, misleading, or deceptive, or which omits to
state material information which is necessary to make the
statements therein not false, misleading or deceptive;
(15) Representing that any person has won a prize, one of a
group of prizes or any other thing of value, if receipt of the
prize or thing of value is contingent upon any payment of a service
charge, mailing charge, handling charge or any other similar charge
by the person or upon mandatory attendance by the person at a
promotion or sales presentation at the seller's place of business
or any other location: Provided, That a person may be offered one
item or the choice of several items conditioned on the person
listening to a sales promotion or entering a consumer transaction
if the true retail value and an accurate description of the item or
items are clearly and conspicuously disclosed along with the
person's obligations upon accepting the item or items; such
description and disclosure shall be typewritten or printed in at
least eight point regular type, in upper or lower case, where
appropriate; or
(16) Violating any provision or requirement of article six-b
of this chapter; or
(17) Violating any provision or requirement of section one
hundred eleven of this article.
(g) "Warranty" means express and implied warranties described
and defined in sections three hundred thirteen, three hundred fourteen and three hundred fifteen, article two, chapter forty-six
of this code and expressions or actions of a merchant which assure
the consumer that the goods have described qualities or will
perform in a described manner.
§46A-6-111. Disclosure in credit and charge card applications and
solicitation; and creating "do-not-solicit" list.
(1) Any application to open a credit card account for any
person under a revolving charge account plan, or a solicitation to
open such an account without requiring an application that is
mailed to consumers shall disclose the following information,
subject to subsections (8), (11) and (12) of this section.
(a) Each annual percentage rate applicable to extensions of
credit under such credit plan.
(b) Where an extension of credit is subject to a variable
rate, the fact that the rate is variable, the annual percentage
rate in effect at the time of the mailing, and how the rate is
determined.
(c) Where more than one rate applies, the range of balances to
which each rate applies.
(d) Any annual fee, other periodic fee, or membership fee
imposed for the issuance or availability of a credit card,
including any account maintenance fee or other charge imposed based on activity or inactivity for the account during the billing cycle.
(e) Any minimum finance charge imposed for each period during
which any extension of credit which is subject to a finance charge
is outstanding.
(f) Any transaction charge imposed in connection with use of
the card to purchase goods or services.
(g) The date by which or the period within which any credit
extended under such credit plan for purchases of goods or services
must be repaid to avoid incurring a credit service charge, and, if
no such period is offered, such fact shall be clearly stated.
(h) If the length of such "grace period" varies, the card
issuer may disclose the range of days in the grace period, the
minimum number of days in the grace period, or the average number
of days in the grace period, if the disclosure is identified as
such.
(i) The name of the balance calculation method used in
determining the balance on which the credit service charge is
computed if the method used has been defined by the attorney
general, or a detailed explanation of the balance calculation
method used if the method has not been so defined.
(j) In prescribing rules to carry out the requirement of paragraph (i) of this subsection, the attorney general shall define
and name not more than the five (5) balance calculation methods
determined by the attorney general to be the most commonly used
methods.
(2) In addition to the information required to be disclosed
under subsection (1) of this section each application or
solicitation to which such subsection applies shall disclose
clearly and conspicuously the following information, subject to
subsections (8) and (9) of this section:
(a) Any fee imposed for an extension of credit in the form of
cash;
(b) Any fee imposed for a late payment;
(c) Any fee imposed in connection with an extension of credit
in excess of the amount of credit authorized to be extended with
respect to such account.
(3) (a) In any telephone solicitation to open a credit card
account for any person under a revolving charge account plan, the
person making the solicitation shall orally disclose the
information described in subsection (1) of this section.
(b) Paragraph (a) of this subsection shall not apply to any
telephone solicitation if:
(i) The credit card issuer:
(aa) Does not impose any fee described in paragraph (d),
subsection (1) of this section; or
(bb) Does not impose any fee in connection with telephone
solicitations unless the consumer signifies acceptance by using the
card;
(ii) The card issuer discloses clearly and conspicuously in
writing the information described in subsections (1) and (2) of
this section within thirty days after the consumer requests the
card, but in no event later than the date of delivery of the card;
and
(iii) The card issuer discloses clearly and conspicuously that
the consumer is not obligated to accept the card or account and the
consumer will not be obligated to pay any of the fees or charges
disclosed unless the consumer elects to accept the card or account
by using the card.
(4) (a) Any application to open a credit card account for any
person under a revolving charge account plan, and any solicitation
to open an account without requiring an application, that is made
available to the public or contained in catalogs, magazines or
other publications shall meet the disclosure requirements of paragraph (b), (c) or (d) of this subsection.
(b) An application or solicitation described in paragraph (a)
of this subsection meets the requirement of this paragraph if such
application or solicitation contains:
(i) The information:
(aa) Described in subsection (1) of this section; and
(bb) Described in subsection (2) of this section in a clear
and conspicuous form, subject to subsections (8) and (9) of this
section;
(ii) A statement, in a conspicuous and prominent location on
the application or solicitation, that:
(aa) The information is accurate as of the date the
application or solicitation was printed;
(bb) The information contained in the application or
solicitation is subject to change after such date; and
(cc) The applicant should contact the creditor for information
on any change in the information contained in the application or
solicitation since it was printed;
(iii) A clear and conspicuous disclosure of the date the
application or solicitation was printed; and
(iv) A disclosure, in a conspicuous and prominent location on the application or solicitation, of a toll free telephone number or
a mailing address at which the applicant may contact the creditor
to obtain any change in the information provided in the application
or solicitation since it was printed.
(c) An application or solicitation described in paragraph (a)
of this subsection meets the requirement of this paragraph if such
application or solicitation:
(i) Contains a statement, in a conspicuous and prominent
location on the application or solicitation, that:
(aa) There are costs associated with the use of credit cards;
and
(bb) The applicant may contact the creditor to request
disclosure of specific information of such costs by calling a toll
free telephone number or by writing to an address specified in the
application;
(ii) Contains a disclosure, in a conspicuous and prominent
location on the application or solicitation, of a toll free
telephone number and a mailing address at which the applicant may
contact the creditor to obtain such information; and
(iii) Does not contain any of the items described in
subsections (1) and (2) of this section.
(d) Upon receipt of a request for any of the information
referred to in paragraph (b), (c) or (d) of this subsection, the
card issuer or the agent of such issuer shall promptly disclose all
of the information described in subsections (1) and (2) of this
section.
(5) (a) Any application or solicitation to open a charge card
account shall disclose clearly and conspicuously the following
information subject to subsections (8), (11) and (12) of this
section:
(i) Any annual fee, other periodic fee, or membership fee
imposed for the issuance or availability of the charge card,
including any account maintenance fee or other charge imposed based
on activity or inactivity for the account during the billing cycle.
(ii) Any transaction charge imposed in connection with use of
the card to purchase goods or services.
(iii) A statement that charges incurred by use of the charge
card are due and payable upon receipt of a periodic statement
rendered for such charge card account.
(b) In addition to the information required to be disclosed
under paragraph (a) of this subsection each written application or
solicitation to which such paragraph applies shall disclose clearly and conspicuously the following information, subject to subsections
(8) and (9) of this section:
(i) Any fee imposed for an extension of credit in the form of
cash.
(ii) Any fee imposed for a late payment.
(iii) Any fee imposed in connection with an extension of
credit in excess of the amount of credit authorized to be extended
with respect to such account.
(c) Any application to open a charge card account, and any
solicitation to open such an account without requiring an
application, that is made available to the public or contained in
catalogs, magazines, or other publications shall contain:
(i) The information:
(aa) Described in paragraph (a) of this subsection in the form
subject to subsections (8), (11) and (12) of this section; and
(bb) Described in paragraph (b) of this subsection in a clear
and conspicuous form, subject to subsections (8) and (9) of this
section;
(ii) A statement, in a conspicuous and prominent location on
the application or solicitation, that:
(aa) The information is accurate as of the date the application or solicitation was printed;
(bb) The information contained in the application or
solicitation is subject to change after such date; and
(cc) The applicant should contact the creditor for information
on any change in the information contained in the application or
solicitation since it was printed;
(iii) A clear and conspicuous disclosure of the date the
application or solicitation was printed; and
(iv) A disclosure, in a conspicuous and prominent location on
the application or solicitation, of a toll free telephone number or
a mailing address at which the applicant may contact the creditor
to obtain any change in the information provided in the application
or solicitation since it was printed.
(d) If a charge card permits the card holder to receive an
extension of credit under a revolving charge account plan which is
not maintained by the charge card issuer the charge card issuer may
provide the information described in paragraphs (a) and (b) of this
subsection in the form required by such paragraphs in lieu of the
information required to be provided under subsection (1), (2), (3)
or (4) of this section with respect to any credit extended under
such plan, if the charge card issuer discloses clearly and conspicuously to the consumer in the application or solicitation
that:
(i) The charge card issuer will make an independent decision
as to whether to issue the card;
(ii) The charge card may arrive before the decision is made
with respect to an extension of credit under a revolving charge
account plan; and
(iii) Approval by the charge card issuer does not constitute
approval by the issuer of the extension of credit.
(e) The information required to be disclosed under subsections
(1) and (2) of this section shall be provided to the charge card
holder by the creditor which maintains such revolving charge
account plan before the first extension of credit under such plan.
(f) For the purposes of this subsection, the term "charge
card" means a card, plate, or other single credit device that may
be used from time to time to obtain credit which is not subject to
a finance charge.
(6) The attorney general may, by rule, require the disclosure
of information in addition to that otherwise required by
subsections (1) through (7) of this section, and modify any
disclosure of information required by subsections (1) through (7) of this section, in any application to open a credit card account
for any person under a revolving charge account plan or any
application to open a charge card account for any person, or a
solicitation to open any such account without requiring an
application, if the attorney general determines that such action is
necessary to carry out the purposes of, or prevent evasions of, any
subsection of this section.
(7) (a) Except as provided in paragraph (b) of this
subsection, a card issuer that imposes any fee described in
subsection (1)(d) or (5)(a)(i) of this section shall transmit to a
consumer at least thirty days prior to the scheduled renewal date
of the consumer's credit or charge card account a clear and
conspicuous disclosure of:
(i) The date by which, the month by which, or the billing
period at the close of which, the account will expire if not
renewed;
(ii) The information described in subsection (1) or (5)(a) of
this section that would apply if the account were renewed, subject
to subsection (8) of this section; and
(iii) The method by which the consumer may terminate continued
credit availability under the account.
(b) (i) The disclosures required by this subsection may be
provided:
(aa) Prior to posting a fee described in subsection (1)(d) or
paragraph (a)(i), subsection (5) of this section to the account; or
(bb) With the periodic billing statement first disclosing that
the fee has been posted to the account.
(ii) Disclosures may be provided under subparagraph (i) of
this paragraph only if:
(aa) The consumer is given a thirty-day period to avoid
payment of the fee or to have the fee recredited to the account in
any case where the consumer does not wish to continue the
availability of the credit; and
(bb) The consumer is permitted to use the card during such
period without incurring an obligation to pay such fee.
(c) The attorney general may, by rule, provide for fewer
disclosures than are required by paragraph (a) of this subsection
in the case of an account which is renewable for a period of less
than six months.
(8) (a) If the amount of any fee required to be disclosed
under the previous subsections of this section is determined on the
basis of a percentage of another amount, the percentage used in making such determination and the identification of the amount
against which such percentage is applied shall be disclosed in lieu
of the amount of such fee.
(b) If a credit or charge card issuer does not impose any fee
required to be disclosed under any provision of the previous
subsections of this section, such provision shall not apply with
respect to such issuer.
(9) If the amount of any fee required to be disclosed by a
credit or charge card issuer under subsection (2), (4)(b)(i)(bb),
(5)(b) or (5)(c)(i)(bb) of this section varies from state to state,
the card issuer may disclose the range of such fees for purposes of
subsections (1) through (5) of this section in lieu of the amount
for each applicable state, if such disclosure includes a statement
that the amount of such fee varies from state to state.
(10) (a) Whenever a card issuer that offers any guarantee or
insurance for repayment of all or part of the outstanding balance
of a revolving charge account plan, proposes to change the person
providing that guarantee or insurance, the card issuer shall send
each insured consumer written notice of the proposed change not
less than thirty days prior to the change, including notice of any
increase in the rate or substantial decrease in coverage or service which will result from such change. Such notice may be included on
or with the monthly statement provided to the consumer prior to the
month in which the proposed change would take effect.
(b) In any case in which a proposed change described in
paragraph (a) of this subsection occurs, the insured consumer shall
be given the name and address of the new guarantor or insurer and
a copy of the policy or group certificate containing the basic
terms and conditions, including the premium rate to be charged.
(c) The notices required under paragraphs (a) and (b) of this
subsection shall each include a statement that the consumer has the
option to discontinue the insurance or guarantee.
(d) No provision of this subsection shall be construed as
superseding any provision of West Virginia law which is applicable
to the regulation of insurance.
(e) The attorney general shall define, in rules, what
constitutes a "substantial decrease in coverage or service" for
purposes of paragraph (a) of this subsection.
(11) The information required by this section shall:
(a) Be disclosed in the form and manner which the attorney
general shall prescribe by rule; and
(b) As applicable be placed in a conspicuous and prominent location on or with any written application, solicitation, or other
document or paper with respect to which such disclosure is
required.
(12) In the rules prescribed under paragraph (a) of subsection
(11) of this section, the attorney general shall require that the
disclosure of such information shall, to the extent the attorney
general determines to be practicable and appropriate, be in the
form of a table which:
(a) Contains clear and concise headings for each item of such
information; and
(b) Provides a clear and concise form for stating each item of
information required to be disclosed under each such heading.
(13)
(a) The attorney general shall create and maintain a do-
not-solicit credit card list whereupon a person not wishing to
receive unsolicited applications to open a credit card account may
notify the attorney general and be placed on the list.
(b) The attorney general shall update its do-not-solicit
credit card list quarterly. The attorney general shall provide
the list for a fee of two hundred dollars to credit card issuers
upon request. All fees collected pursuant to this section shall be
deposited in a special fund in the state treasury designated the do-not-solicit list fund, which is hereby created. The fund may
only be used for the administration of this section.
(c) A credit card issuer may not solicit an application for a
credit card account to person on the then-current quarterly listing
published by the attorney general.
Any credit card issuer or other
person who offers for sale any consumer information which includes
residential addresses shall screen and exclude those names and
residential addresses which appear on the attorney general's
then-current do-not-solicit credit card list.
(14) A violation of this section is an unfair and deceptive
act or practice within the meaning of section one hundred two of
this article and is subject to the enforcement and penalty
provisions contained in this article.
NOTE: The purpose of this bill is to require credit card
issuers to provide adequate disclosure to consumers when soliciting
credit card applications. Also a "do-not-solicit" list is created
to allow persons to "opt-out" if they do not wish to receive
solicitations for credit card applications.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
Section one hundred eleven is new; therefore, strike-throughs
and underscoring have been omitted.