SENATE, No. 1701
STATE OF NEW JERSEY
INTRODUCED NOVEMBER 25, 1996
By Senator CIESLA
An Act concerning commercial telephone solicitations and supplementing P.L.1960, c.69 (C.56:8-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "New Jersey Commercial Telephone Solicitation Consumer Protection Act."
2. As used in this act:
"Commercial telephone solicitation" means an unsolicited telephone call to a person offering or selling merchandise.
"Commercial telephone seller" means any person who engages in the business of offering or selling merchandise through a commercial telephone solicitation.
"Director" means the Director of the Division of Consumer Affairs in the Department of Law and Public Safety.
3. a. No person shall engage in commercial telephone solicitations unless registered with the Division of Consumer Affairs in the Department of Law and Public Safety in accordance with the provisions of this act.
b. Every commercial telephone seller, including any person whose residence or principal place of business is located outside of this State, shall annually register with the director. Application for registration shall be on a form provided by the director and shall include the name and address of the applicant and any other information which the director shall prescribe by rule. The application shall be accompanied by a reasonable fee, set by the director in an amount sufficient to defray the division's expenses incurred in administering and enforcing this act.
4. The provisions of this act shall not apply to:
a. A person engaging in commercial telephone solicitation in which the solicitation is an isolated transaction and not done in the course of a pattern of repeated transactions of a similar nature.
b. A person properly registered with the Division of Consumer Affairs pursuant to the "Charitable Registration and Investigation Act," P.L.1994, c.16 (C.45:17A-18 et seq.).
c. A person who does not make the major sales presentation during the commercial telephone solicitation and who does not intend to, and does not actually, complete or obtain provisional acceptance of a sale during the commercial telephone solicitation. However, if a seller, directly following a commercial telephone solicitation, causes an individual whose primary purpose it is to go to the prospective purchaser to collect the payment or deliver any merchandise purchased, this exemption does not apply.
d. Any licensed securities, commodities or investment broker, dealer or investment adviser, when soliciting within the scope of his license. As used in this section, "licensed securities, commodities or investment broker, dealer or investment adviser" means a person subject to registration as such by the Securities and Exchange Commission, by the National Association of Securities Dealers or other self-regulatory organization, as defined in paragraph (26) of section 3 of the Securities Exchange Act of 1934 (15 U.S.C. §78c), or by an official or agency of this State or of any state of the United States.
e. Any licensed associated person of a securities, commodities or investment adviser, when soliciting within the scope of practice of his license. As used in this section, "licensed associated person of a securities, commodities or investment broker, dealer or investment adviser" means any associated person registered or licensed by the National Association of Securities Dealers or other self-regulatory organization, as defined in paragraph (26) of section 3 of the Securities Exchange Act of 1934 (15 U.S.C. §78c), or by an official or agency of this State or any state of the United States.
f. A person primarily soliciting the sale of a newspaper of general circulation.
g. Any supervised financial institution. As used in this section, "supervised financial institution" means any bank, trust company, savings and loan association, savings bank, credit union, industrial loan company, consumer finance lender, or insurer subject to supervision by an official or agency of this State or of the United States.
h. Any person licensed pursuant to the "New Jersey Insurance Producer Licensing Act," P.L.1987, c.293 (C.17:22A-1 et seq.).
i. A person soliciting the sale of services provided by a cable television system operating under authority of a franchise or certificate of approval issued pursuant to the provisions of the "Cable Television Act," P.L.1972, c.186 (C.48:5A-1 et seq.).
j. A business-to-business sale in which:
(1) The commercial telephone seller has been operating continuously for at least three years under the same business name and has at least 50 percent of its dollar volume consisting of repeat sales to existing businesses;
(2) The purchaser intends to resell or offer for purposes of advertisement or as a promotional item the property or goods purchased; or
(3) The purchaser intends to use the property or goods purchased in a recycling, reuse, remanufacturing or manufacturing process.
k. A person who solicits sales by periodically publishing and delivering a catalog of the seller's merchandise to prospective purchasers, if the catalog:
(1) Contains a written description or illustration of each item offered for sale;
(2) Includes the business address or home office address of the seller;
(3) Includes at least 20 pages of written material and illustrations and is distributed in more than one state; and
(4) Has an annual circulation of not less than 150,000.
l. A person who solicits contracts for the maintenance or repair of goods previously purchased from the person making the solicitation or on whose behalf the solicitation is made.
m. An issuer or a subsidiary of an issuer that has a class of securities which is subject to section 12 of the Securities Exchange Act of 1934 (15 U.S.C. §78l), and which is either registered or exempt from registration under paragraph (A), paragraph (B), paragraph (C), paragraph (E), paragraph (F), paragraph (G), or paragraph (H) of subsection (g)(2) of that section.
n. A person soliciting a transaction regulated by the Commodity Futures Trading Commission if the person is registered or temporarily licensed for this activity with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. §1 et seq.) and the registration or license has not expired or been suspended or revoked.
o. A person soliciting business from prospective consumers who have an existing business relationship with or have previously made purchases from the person, if the person is operating under the same business name.
p. A person who has been operating, for at least one year, a retail business establishment under the same name as that used in connection with a commercial telephone solicitation, and the following occur on a continuing basis:
(1) Merchandise is offered for sale and provided at the business establishment; and
(2) A majority of the seller's business involves the purchaser obtaining such merchandise at the seller's location.
q. Any person which has been providing sales services from commercial telephone solicitations continuously for at least five years under the same ownership and control and which derives 75 percent of its gross sales revenues in commercial telephone solicitations from contracts with persons exempted in this section.
r. A person who is a licensed real estate salesperson, broker-salesperson or broker pursuant to P.L.1953, c.229 (C.45:15-1 et seq.) and who is acting within the scope of practice of his profession.
s. A publisher, or an agent of a publisher by written agreement, who solicits the sale of his periodical or magazine of general, paid circulation. The term "paid circulation" shall not include magazines that are only circulated as part of a membership package or that are given as a free gift or prize from the publisher by written agreement.
t. A person soliciting, on behalf of a book, video, or record club, contractual arrangements under which the seller provides the consumer with a form which the consumer may use to instruct the seller not to ship the offered merchandise.
u. A telephone company subject to the provisions of chapter 17 of Title 48 of the Revised Statutes or its subsidiary or agents, or a business which is regulated by the New Jersey Board of Public Utilities, or a Federal Communications Commission licensed cellular telephone company or any other bona fide radio telecommunication services provider.
v. Any person licensed pursuant to P.L.1964, c.273 (C.17:15B-1 et seq.) when soliciting within the scope of his license.
w. Any person with a certificate of authority issued pursuant to R.S.17:15-1 et seq.when soliciting within the scope of his authority.
x. A person soliciting the sale of perishable food, seeds or plants when a sale does not involve an amount in excess of $100 directed to a single address.
5. In addition to any other procedure, condition or information required by this act:
a. Every applicant shall file a disclosure statement with the director stating whether the applicant has been convicted of any crime, which for the purposes of this act shall mean a violation of any of the following provisions of the "New Jersey Code of Criminal Justice," Title 2C of the New Jersey Statutes, or the equivalent under the laws of any other jurisdiction:
(1) Any crime of the first degree;
(2) Any crime which is a second or third degree crime and is a violation of chapter 20 or 21 of Title 2C of the New Jersey Statutes; or
(3) Any other crime which is a violation of N.J.S.2C:5-1, 2C:5-2,
2C:11-2 through 2C:11-4, 2C:12-1, 2C:12-3, 2C:13-1, 2C:14-2, 2C:15-1, subsection a. or b. of 2C:17-1, subsection a. or b. of 2C:17-2, 2C:18-2, 2C:20-4, 2C:20-5, 2C:20-7, 2C:20-9, 2C:21-2 through 2C:21-4, 2C:21-6, 2C:21-7, 2C:21-12, 2C:21-14, 2C:21-15, or 2C:21-19, chapter 27 or 28 of Title 2C of the New Jersey Statutes, N.J.S.2C:30-2, 2C:30-3, 2C:35-5, 2C:35-10, 2C:37-1 through 2C:37-4.
b. Each disclosure statement may be reviewed and used by the director as grounds for denying, suspending or revoking registration, except that in cases in which the provisions of P.L.1968, c.282 (2A:168A-1 et seq.) apply, the director shall comply with the requirements of that act.
c. An applicant whose registration is denied, suspended or revoked pursuant to this section shall, upon a written request transmitted to the director within 30 calendar days of that action, be afforded an opportunity for a hearing in a manner provided for contested cases pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
d. An applicant shall have the continuing duty to provide any assistance or information requested by the director, and to cooperate in any inquiry, investigation or hearing conducted by the director.
e. If any of the information required to be included in the disclosure statement changes, or if additional information should be added after the filing of the statement, the applicant shall provide that information to the director, in writing, within 30 calendar days of the change or addition.
6. a. The director may refuse to issue or renew, and may revoke, any registration for failure to comply with, or violation of, the provisions of this act or for any other good cause shown within the meaning and purpose of this act. A refusal or revocation shall not be made except upon reasonable notice to, and opportunity to be heard by, the applicant or registrant.
b. The director, in lieu of revoking a registration, may suspend the registration for a reasonable period of time, or assess a penalty in lieu of suspension, or both, and may issue a new registration, notwithstanding the revocation of a prior registration, if the applicant is found to have become entitled to the new registration.
7. All registrants shall prominently display their registration numbers within their places of business, and in all advertisements, business documents and correspondence.
8. a. Any registration number issued by the director shall remain the property of the State and shall be immediately returned to the director upon its suspension, non-renewal or revocation pursuant to this act.
b. The issuance of a registration to an applicant who is a nonresident of this State shall be deemed to be his irrevocable consent that service of process in any action or proceeding may be made upon him by service upon the director.
9. Any material change in any information filed with the director pursuant to this act shall be reported in writing to the director within 10 business days of the change.
10. a. Any person required to be registered pursuant to this act shall maintain a bond issued by a surety authorized to transact business in this State. The principal sum of the bond shall not be less than $50,000, which amount the director may adjust by regulation. The bond shall be filed or deposited with the director for the use of any person who is damaged or suffers any loss for any violation of this act. Any person claiming against the bond may maintain an action at law against the surety or director, as the case may be. The aggregate liability of the surety or director to all persons for all breaches of the conditions of the bond held by the director shall not exceed the amount of the bond held by the director.
b. The commercial telephone seller shall file a copy of the bond with the director and a certificate by the surety that the surety will notify the director at least 10 days in advance of the date of any cancellation or material change in the bond.
11. a. Within the first 30 seconds of a telephone call, a commercial telephone seller shall identify himself by stating his name, the person on whose behalf the solicitation is being made, and the merchandise being sold.
b. If a sale or an agreement to purchase is completed, the commercial telephone seller shall inform the purchaser of his cancellation rights as provided in this act, state the registration number issued by the director for the commercial telephone seller, give the street address of the commercial telephone seller, and provide any other disclosure as prescribed by the director by rule.
c. All oral disclosures required by this section shall be made in a clear and intelligible manner.
12. a. A purchase of merchandise ordered as a result of a commercial telephone solicitation, if not followed by a signed written contract, is not final. If a contract is not made in compliance with this section, it is not valid and enforceable against the purchaser. The contract made pursuant to a commercial telephone solicitation shall:
(1) Be in writing and signed by the purchaser;
(2) Match the description of the merchandise described in the commercial telephone solicitation;
(3) Contain the name, address, telephone number, and registration number of the commercial telephone seller, the total price of the contract, and a detailed description of the merchandise being sold;
(4) Contain the disclosures required by section 11 of this act;
(5) Contain, in at least 12-point type, immediately preceding the signature, the following statement: "YOU ARE NOT OBLIGATED TO PAY ANY MONEY UNLESS YOU SIGN THIS CONTRACT AND RETURN IT TO THE COMMERCIAL TELEPHONE SELLER;"
(6) Include any oral representations made by the commercial telephone seller to the purchaser in connection with the transaction; and
(7) Contain any other information as may be prescribed by the director by rule.
b. A commercial telephone seller shall not make or submit any charge to the purchaser's credit card account or make or cause to be made any electronic transfer of funds until after the commercial telephone seller receives from the purchaser a copy of the contract, signed by the purchaser, which is in compliance with the provisions of this section. Upon receipt of the contract, the commercial telephone seller shall send the purchaser a written confirmation of the sale.
c. The written contract shall contain an explanation of the purchaser's rights under this section and a statement indicating when notice of cancellation should be sent. The purchaser may give notice of cancellation to the commercial telephone seller in writing within three business days after receipt of the confirmation. If the commercial telephone seller has not provided an address for receipt of such notice, cancellation is effective by mailing the notice to the director.
d. Notice of cancellation by the commercial telephone seller shall be given by certified mail, return receipt requested, and shall be effective when mailed. Notice of cancellation given by the purchaser need not take a particular form and is sufficient if it indicates, by any form of written expression, the name and address of the purchaser and the purchaser's stated intention not to be bound by the sale.
e. If a commercial telephone seller violates the provisions of this act in making a sale, or fails to deliver an item within 30 calendar days, the contract is voidable by giving notice to the commercial telephone seller, and the purchaser is entitled to a return from the seller, within 14 days, of all consideration paid. Notice of cancellation given by the purchaser need not take a particular form and is sufficient given orally or in writing. Upon receipt by the purchaser of the consideration paid to the commercial telephone seller, the purchaser shall return to the commercial telephone seller the merchandise received by the purchaser. Any cost of returning the merchandise received by the purchaser shall be borne by the commercial telephone seller, by providing or guaranteeing payment for return shipping. If such payment is not provided or guaranteed, the purchaser may keep, without further obligation, the merchandise received.
f. A person who purchases merchandise pursuant to a commercial telephone solicitation shall be given a refund, credit or replacement, at his option, if:
(1) The merchandise is defective, is not as represented, or if any merchandise is not received as promised; or
(2) The person returns the merchandise or makes a written request for the refund, credit or replacement within seven days after receiving the merchandise, whichever is received later.
g. If a purchaser of merchandise returns only a portion of the merchandise, the refund, credit or replacement required by this section may be prorated accordingly.
h. Any refund, credit or replacement required by this section shall be guaranteed by the commercial telephone seller who made the sale, regardless of whether payment for the merchandise is made to that person.
i. Any contract, agreement to purchase, or written confirmation executed by a commercial telephone seller which purports to waive the purchaser's rights under this act is against public policy and shall be unenforceable, provided that an agreement between a purchaser and commercial telephone seller to extend the delivery time of any merchandise to more than 30 days shall be enforceable if the commercial telephone seller has a reasonable basis to expect that he will be unable to ship the merchandise within 30 days and if the agreement is included in the terms of the written confirmation.
j. If a contract or agreement to purchase confers on a purchaser greater rights to cancellation, refund or return than those enumerated in this act, such contract shall be enforceable and not in violation of this act, provided that all rights under such a contract or agreement to purchase are specifically stated in a written confirmation sent pursuant to the provisions of this section.
k. The provisions of this section shall not reduce, restrict or eliminate any existing rights or remedies available to purchasers.
l. The requirements pursuant to subsections a. through e. of this section shall not apply to any sale in which the purchaser is given a full refund for the return of undamaged and unused merchandise or a cancellation notice is given to the commercial telephone seller, within seven days after receipt of the merchandise by the purchaser, and the commercial telephone seller processes the refund within 30 days after receipt of the returned merchandise by the purchaser.
13. It is an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) to violate any provision of this act.
14. The director, pursuant to the provisions of the "Administrative Procedure Act," P.L.1968, c.140 (C.52:14B-1 et seq.), shall promulgate rules and regulations to effectuate the purposes of this act.
15. This act shall take effect 180 days following enactment.
STATEMENT
This bill requires registration of persons who engage in the business of offering or selling merchandise through a commercial telephone solicitation with the Director of the Division of Consumer Affairs in the Department of Law and Public Safety.
Under the bill's provisions, every commercial telephone seller, including any person whose residence or principal place of business is located outside of this State, shall annually register with the director to do business in this State. The bill also makes violators of this bill subject to the provisions of the consumer fraud law, P.L.1960, c.39 (C.56:8-1 et seq.). In addition, the bill authorizes the director to refuse to issue or renew, or to suspend or revoke the registration of any person who violates the bill's provisions.
The bill further requires those registered as commercial telephone sellers to maintain a bond of not less than $50,000, to be filed or deposited with the Director of the Division of Consumer Affairs for the use of any person who is damaged or suffers any loss for any violation of the bill.
Another stipulation of this bill is that within the first 30 seconds of a telephone call, a commercial telephone seller shall identify himself by stating his name, the person on whose behalf the solicitation is being made, and the merchandise being sold; if a sale or an agreement to purchase is completed, the commercial telephone seller shall inform the purchaser of his cancellation rights as provided in the bill, state the registration number issued by the director for the commercial telephone seller, give the street address of the commercial telephone seller, and provide any other disclosure as prescribed by the director. The bill also enumerates the cancellation, refund, credit and replacement provisions available to a purchaser of merchandise as a result of a telephone solicitation and also establishes that before a purchase of merchandise following a telephone solicitation is final, there must be a signed written contract which contains various disclosures of information and explanation of a purchaser's rights as stipulated in this bill.
"New Jersey Commercial Telephone Solicitation Consumer Protection Act."