June 18, 2008, Introduced by Reps. Dean and Valentine and referred to the Committee on Judiciary.
A bill to amend 1976 PA 331, entitled
"Michigan consumer protection act,"
by amending sections 3, 7, and 8 (MCL 445.903, 445.907, and
445.908), section 3 as amended by 2006 PA 508.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. (1) Unfair, unconscionable, or deceptive methods,
acts, or practices in the conduct of trade or commerce are unlawful
and are defined as follows:
(a) Causing a probability of confusion or misunderstanding as
to the source, sponsorship, approval, or certification of goods or
services.
(b) Using deceptive representations or deceptive designations
of geographic origin in connection with goods or services.
(c) Representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits, or
quantities that they do not have or that a person has sponsorship,
approval, status, affiliation, or connection that he or she does
not have.
(d) Representing that goods are new if they are deteriorated,
altered, reconditioned, used, or secondhand.
(e) 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.
(f) Disparaging the goods, services, business, or reputation
of another by false or misleading representation of fact.
(g) Advertising or representing goods or services with intent
not to dispose of those goods or services as advertised or
represented.
(h) Advertising goods or services with intent not to supply
reasonably expectable public demand, unless the advertisement
discloses a limitation of quantity in immediate conjunction with
the advertised goods or services.
(i) Making false or misleading statements of fact concerning
the reasons for, existence of, or amounts of price reductions.
(j) Representing that a part, replacement, or repair service
is needed when it is not.
(k) Representing to a party to whom goods or services are
supplied that the goods or services are being supplied in response
to a request made by or on behalf of the party, when they are not.
(l) Misrepresenting that because of some defect in a consumer's
home the health, safety, or lives of the consumer or his or her
family are in danger if the product or services are not purchased,
when in fact the defect does not exist or the product or services
would not remove the danger.
(m) Causing a probability of confusion or of misunderstanding
with respect to the authority of a salesperson, representative, or
agent to negotiate the final terms of a transaction.
(n) Causing a probability of confusion or of misunderstanding
as to the legal rights, obligations, or remedies of a party to a
transaction.
(o) Causing a probability of confusion or of misunderstanding
as to the terms or conditions of credit if credit is extended in a
transaction.
(p) Disclaiming or limiting the implied warranty of
merchantability and fitness for use, unless a disclaimer is clearly
and conspicuously disclosed.
(q) Representing or implying that the subject of a consumer
transaction will be provided promptly, or at a specified time, or
within a reasonable time, if the merchant knows or has reason to
know it will not be so provided.
(r) Representing that a consumer will receive goods or
services "free" or "without charge", or using words of similar
import in the representation, without clearly and conspicuously
disclosing with equal prominence in immediate conjunction with the
use of those words the conditions, terms, or prerequisites to the
use or retention of the goods or services advertised.
(s) Failing to reveal a material fact, the omission of which
tends to mislead or deceive the consumer, and which fact could not
reasonably be known by the consumer.
(t) Entering into a consumer transaction in which the consumer
waives or purports to waive a right, benefit, or immunity provided
by law, unless the waiver is clearly stated and the consumer has
specifically consented to it.
(u) Failing, in a consumer transaction that is rescinded,
canceled, or otherwise terminated in accordance with the terms of
an agreement, advertisement, representation, or provision of law,
to promptly restore to the person or persons entitled to it a
deposit, down payment, or other payment, or in the case of property
traded in but not available, the greater of the agreed value or the
fair market value of the property, or to cancel within a specified
time or an otherwise reasonable time an acquired security interest.
(v) Taking or arranging for the consumer to sign an
acknowledgment, certificate, or other writing affirming acceptance,
delivery, compliance with a requirement of law, or other
performance, if the merchant knows or has reason to know that the
statement is not true.
(w) Representing that a consumer will receive a rebate,
discount, or other benefit as an inducement for entering into a
transaction, if the benefit is contingent on an event to occur
subsequent to the consummation of the transaction.
(x) Taking advantage of the consumer's inability reasonably to
protect his or her interests by reason of disability, illiteracy,
or inability to understand the language of an agreement presented
by the other party to the transaction who knows or reasonably
should know of the consumer's inability.
(y) Gross discrepancies between the oral representations of
the seller and the written agreement covering the same transaction
or failure of the other party to the transaction to provide the
promised benefits.
(z) Charging the consumer a price that is grossly in excess of
the price at which similar property or services are sold. It is
prima facie evidence that a price violates this subdivision if
either of the following applies:
(i) The amount charged represents a gross disparity between the
price of the property or service that is the subject of the
transaction and the average price at which that property or service
was rented, leased, sold, or provided in the usual course of
business during the preceding 30 days, and the increase in the
amount charged is not attributable to additional costs incurred in
connection with the rental, lease, or sale of the property or with
providing the service or attributable to national or international
market trends.
(ii) The amount charged grossly exceeds the average price at
which the same or a similar property or service was readily
obtainable in the trade area during the preceding 30 days, and the
increase in the amount charged is not attributable to additional
costs incurred in connection with the rental, lease, or sale of the
property or with providing the service or attributable to national
or international market trends.
(aa) Causing coercion and duress as the result of the time and
nature of a sales presentation.
(bb) Making a representation of fact or statement of fact
material to the transaction such that a person reasonably believes
the represented or suggested state of affairs to be other than it
actually is.
(cc) Failing to reveal facts that are material to the
transaction in light of representations of fact made in a positive
manner.
(dd) Subject to subdivision (ee), representations by the
manufacturer of a product or package that the product or package is
1 or more of the following:
(i) Except as provided in subparagraph (ii), recycled,
recyclable, degradable, or is of a certain recycled content, in
violation of guides for the use of environmental marketing claims,
16 CFR part 260.
(ii) For container holding devices regulated under part 163 of
the natural resources and environmental protection act, 1994 PA
451, MCL 324.16301 to 324.16303, representations by a manufacturer
that the container holding device is degradable contrary to the
definition provided in that act.
(ee) Representing that a product or package is degradable,
biodegradable, or photodegradable unless it can be substantiated by
evidence that the product or package will completely decompose into
elements found in nature within a reasonably short period of time
after consumers use the product and dispose of the product or the
package in a landfill or composting facility, as appropriate.
(ff) Offering a consumer a prize if in order to claim the
prize the consumer is required to submit to a sales presentation,
unless a written disclosure is given to the consumer at the time
the consumer is notified of the prize and the written disclosure
meets all of the following requirements:
(i) Is written or printed in a bold type that is not smaller
than 10-point.
(ii) Fully describes the prize, including its cash value, won
by the consumer.
(iii) Contains all the terms and conditions for claiming the
prize, including a statement that the consumer is required to
submit to a sales presentation.
(iv) Fully describes the product, real estate, investment,
service, membership, or other item that is or will be offered for
sale, including the price of the least expensive item and the most
expensive item.
(gg) Violating 1971 PA 227, MCL 445.111 to 445.117, in
connection with a home solicitation sale or telephone solicitation,
including, but not limited to, having an independent courier
service or other third party pick up a consumer's payment on a home
solicitation sale during the period the consumer is entitled to
cancel the sale.
(hh) Except as provided in subsection (3), requiring a
consumer to disclose his or her social security number as a
condition to selling or leasing goods or providing a service to the
consumer, unless any of the following apply:
(i) The selling, leasing, providing, terms of payment, or
transaction includes an application for or an extension of credit
to the consumer.
(ii) The disclosure is required or authorized by applicable
state or federal statute, rule, or regulation.
(iii) The disclosure is requested by a person to obtain a
consumer report for a permissible purpose described in section 604
of the fair credit reporting act, 15 USC 1681b.
(iv) The disclosure is requested by a landlord, lessor, or
property manager to obtain a background check of the individual in
conjunction with the rent or leasing of real property.
(v) The disclosure is requested from an individual to effect,
administer or enforce a specific telephonic or other electronic
consumer transaction that is not made in person but is requested or
authorized by the individual if it is to be used solely to confirm
the identity of the individual through a fraud prevention service
database. The consumer good or service shall still be provided to
the consumer upon verification of his or her identity if he or she
refuses to provide his or her social security number but provides
other information or documentation that can be used by the person
to verify his or her identity. The person may inform the consumer
that verification through other means than use of the social
security number may cause a delay in providing the service or good
to the consumer.
(ii) If a credit card or debit card is used for payment in a
consumer transaction, issuing or delivering a receipt to the
consumer that displays any part of the expiration date of the card
or more than the last 4 digits of the consumer's account number.
This subdivision does not apply if the only receipt issued in a
consumer transaction is a credit card or debit card receipt on
which the account number or expiration date is handwritten,
mechanically imprinted, or photocopied. This subdivision applies to
any consumer transaction that occurs on or after March 1, 2005,
except that if a credit or debit card receipt is printed in a
consumer transaction by an electronic device, this subdivision
applies to any consumer transaction that occurs using that device
only after 1 of the following dates, as applicable:
(i) If the electronic device is placed in service after March
1, 2005, July 1, 2005 or the date the device is placed in service,
whichever is later.
(ii) If the electronic device is in service on or before March
1, 2005, July 1, 2006.
(jj) Violating section 11 of the identity theft protection
act, 2004 PA 452, MCL 445.71.
(kk) Advertising or conducting a live musical performance or
production in this state through the use of a false, deceptive, or
misleading affiliation, connection, or association between a
performing group and a recording group. This subdivision does not
apply if any of the following are met:
(i) The performing group is the authorized registrant and owner
of a federal service mark for that group registered in the United
States patent and trademark office.
(ii) At least 1 member of the performing group was a member of
the recording group and has a legal right to use the recording
group's name, by virtue of use or operation under the recording
group's name without having abandoned the name or affiliation with
the recording group.
(iii) The live musical performance or production is identified
in all advertising and promotion as a salute or tribute and the
name of the vocal or instrumental group performing is not so
closely related or similar to that used by the recording group that
it would tend to confuse or mislead the public.
(iv) The advertising does not relate to a live musical
performance or production taking place in this state.
(v) The performance or production is expressly authorized by
the recording group.
(2) The attorney general may promulgate rules to implement
this act under the administrative procedures act of 1969, 1969 PA
306, MCL 24.201 to 24.328. The rules shall not create an additional
unfair trade practice not already enumerated by this section.
However, to assure national uniformity, rules shall not be
promulgated to implement subsection (1)(dd) or (ee).
(3) Subsection (1)(hh) does not apply to either of the
following:
(a) Providing a service related to the administration of
health-related or dental-related benefits or services to patients,
including provider contracting or credentialing. This subdivision
is intended to limit the application of subsection (1)(hh) and is
not intended to imply that this act would otherwise apply to
health-related or dental-related benefits.
(b) An employer providing benefits or services to an employee.
Sec.
7. (1) Upon the ex parte application of the attorney
general
to the circuit court in the county where the defendant is
established
or conducts business or, if the defendant is not
established
in this state, in Ingham county, the circuit court, if
it
finds probable cause to believe a person has engaged, is
engaging,
or is about to engage in a method, act, or practice which
is
unlawful under this act, may, after an ex parte hearing, issue a
subpoena
compelling a person to appear before the attorney general
and
answer under oath questions relating to an alleged violation of
this
act. A person served with a subpoena may be accompanied by
counsel
when he appears before the attorney general. The subpoena
may
compel a person to produce the books, records, papers,
documents,
or things relating to an alleged violation of this act.
During
the examination of documentary material under the subpoena,
the
court may require a person having knowledge of the documentary
material
or the matters contained therein to attend and give
testimony
under oath or acknowledgment with respect to the
documentary
material.
(2)
The subpoena shall include the notice of the time, place,
and
cause of the taking of testimony, the examination, or the
attendance
and shall allow not less than 10 days before the date of
the
taking of testimony or examination, unless for good cause shown
the
court shortens that period of time.
(3)
Service of the notice shall be in the manner provided and
subject
to the provisions that apply to service of process upon a
defendant
in a civil action commenced in the circuit court.
(4)
The notice shall:
(a)
State the time and place for the taking of testimony or
the
examination and the name and address of the person to be
examined.
If the name is not known, the notice shall give a general
description
sufficient to identify the person or the particular
class
or group to which the person belongs.
(b)
State a reference to this section and the general subject
matter
under investigation.
(c)
Describe the documentary material to be produced with
reasonable
specificity so as to indicate fairly the material
demanded.
(d)
Prescribe a return date within which the documentary
material
shall be produced.
(e)
Identify the members of the attorney general's staff to
whom
the documentary material shall be made available for
inspection
and copying.
(5)
At any time before the date specified in the notice, upon
motion
for good cause shown, the court may extend the reporting
date
or modify or set aside the notice and subpoena.
(6)
The documentary material or other information obtained by
the
attorney general pursuant to an investigation under this
section
shall be confidential records of the office of the attorney
general
and shall not be available for public inspection or copying
or
divulged to any person except as provided in this section. The
attorney
general may disclose documentary material or other
information
as follows:
(a)
To other law enforcement officials.
(b)
In connection with an enforcement action brought pursuant
to
this act.
(c)
Upon order of the court, to a party in a private action
brought
pursuant to this act.
(7)
A person who discloses information designated confidential
by
this section, except as permitted by subsection (6) or under
court
order, is guilty of a misdemeanor and may be fined not more
than
$2,500.00, or imprisoned for not more than 1 year, or both.
(1) If the attorney general has reasonable cause to believe that a
person has information or is in possession, custody, or control of
any document or other tangible object relevant to an investigation
for violation of this act, the attorney general may serve on the
person, before bringing any action in the circuit court, a written
demand to appear and be examined under oath, and to produce the
document or object for inspection and copying. The demand must meet
all of the following:
(a) Be served on the person in the manner required for service
of process in this state.
(b) Describe the nature of the conduct constituting the
violation under investigation.
(c) Describe the document or object with sufficient
definiteness to permit it to be fairly identified.
(d) If demanded, contain a copy of the written
interrogatories.
(e) Prescribe a reasonable time at which the person must
appear to testify, within which to answer the written
interrogatories, and within which the document or object must be
produced, and advise the person that objections to or reasons for
not complying with the demand may be filed with the attorney
general on or before that time.
(f) Specify a place for the taking of testimony or for
production and designate the person who shall be custodian of the
document or object.
(g) Contain a copy of subsection (2).
(2) If a person objects to or otherwise fails to comply with
the written demand served upon him or her under subsection (1), the
attorney general may file a petition to enforce the demand in the
circuit court of the county in this state in which the person
resides, in which the person maintains a principal place of
business, or in which the person conducts business or in the
circuit court of Ingham county if the person is not a resident of
this state or does not maintain a principal office or conduct
business in this state. The attorney general shall serve notice of
the hearing on the petition and a copy of all pleadings on the
person, who may appear in opposition. If the court finds that the
demand is proper, that there is reasonable cause to believe that
there may have been or is presently occurring a violation of this
act, and that the information sought or document or object demanded
is relevant to the investigation, the court shall order the person
to comply with the demand, subject to any modification prescribed
by the court. Upon motion by the person and for good cause shown,
the court may make any further order in the proceedings that
justice requires to protect the person from unreasonable annoyance,
embarrassment, oppression, burden, or expense.
(3) The attorney general shall keep any procedure, testimony
taken, or material produced pursuant to a demand under subsection
(1) confidential before bringing an action against a person under
this act for the violation under investigation, unless
confidentiality is waived by the person being investigated and the
person who has testified, answered interrogatories, or produced
material or disclosure is authorized by the court.
Sec.
8. (1) A person upon whom a notice on which a written
demand
is served pursuant to under section
7 shall comply with the
terms
of the notice demand unless otherwise provided by the
directed by an order of the circuit court.
(2)
A person who that does any of the following shall be
assessed
a civil penalty is subject to
a civil fine of not more
than
$5,000.00: .
(a) Knowingly and without good cause fails to appear when
served
with a notice written
demand under section 7 or to comply
with that demand.
(b) Knowingly avoids, evades, or prevents compliance, in whole
or in part, with an investigation, including the removal from any
place, concealment, destruction, mutilation, alteration, or
falsification of documentary material in the possession, custody,
or
control of a person subject to the notice a written demand under
section 7.
(c) Knowingly conceals relevant information.
(3)
The If a person violates
this section, the attorney
general may file a petition in the circuit court of the county in
which the person is established, resides, maintains a principal
office, or conducts business or, if the person is not
established
does not reside, maintain a principal office, or conduct business
in this state, in the circuit court of Ingham county for an order
to
enforce compliance with a subpoena or this section.
(4) A violation of a final order entered pursuant to
this
section
shall be punished as under
subsection (3) or section 7(2)
is considered civil contempt.
(5) (4)
Upon the petition of the attorney
general, the a
circuit court may enjoin a person from doing business in this state
if the person persistently and knowingly evades or prevents
compliance
with an injunction issued pursuant to under this act.