HOUSE BILL No. 6173 June 5, 2002, Introduced by Reps. Bernero, Spade, Gieleghem, Daniels, Basham, Stallworth, Quarles, Rison, Garza, Zelenko, Lipsey and Lemmons and referred to the Committee on Commerce. A bill to amend 1976 PA 331, entitled "Michigan consumer protection act," by amending section 3 (MCL 445.903), as amended by 2000 PA 14. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 3. (1) Unfair, unconscionable, or deceptive methods, 2 acts, or practices in the conduct of trade or commerce are unlaw- 3 ful and are defined as follows: 4 (a) Causing a probability of confusion or misunderstanding 5 as to the source, sponsorship, approval, or certification of 6 goods or services. 7 (b) Using deceptive representations or deceptive designa- 8 tions of geographic origin in connection with goods or services. 9 (c) Representing that goods or services have sponsorship, 10 approval, characteristics, ingredients, uses, benefits, or 11 quantities that they do not have or that a person has 06621'02 DAM 2 1 sponsorship, approval, status, affiliation, or connection that he 2 or she does not have. 3 (d) Representing that goods are new if they are deterio- 4 rated, altered, reconditioned, used, or secondhand. 5 (e) Representing that goods or services are of a particular 6 standard, quality, or grade, or that goods are of a particular 7 style or model, if they are of another. 8 (f) Disparaging the goods, services, business, or reputation 9 of another by false or misleading representation of fact. 10 (g) Advertising or representing goods or services with 11 intent not to dispose of those goods or services as advertised or 12 represented. 13 (h) Advertising goods or services with intent not to supply 14 reasonably expectable public demand, unless the advertisement 15 discloses a limitation of quantity in immediate conjunction with 16 the advertised goods or services. 17 (i) Making false or misleading statements of fact concerning 18 the reasons for, existence of, or amounts of price reductions. 19 (j) Representing that a part, replacement, or repair service 20 is needed when it is not. 21 (k) Representing to a party to whom goods or services are 22 supplied that the goods or services are being supplied in 23 response to a request made by or on behalf of the party, when 24 they are not. 25 (l) Misrepresenting that because of some defect in a 26 consumer's home the health, safety, or lives of the consumer or 27 his or her family are in danger if the product or services are 06621'02 3 1 not purchased, when in fact the defect does not exist or the 2 product or services would not remove the danger. 3 (m) Causing a probability of confusion or of misunderstand- 4 ing with respect to the authority of a salesperson, representa- 5 tive, or agent to negotiate the final terms of a transaction. 6 (n) Causing a probability of confusion or of misunderstand- 7 ing as to the legal rights, obligations, or remedies of a party 8 to a transaction. 9 (o) Causing a probability of confusion or of misunderstand- 10 ing as to the terms or conditions of credit if credit is extended 11 in a transaction. 12 (p) Disclaiming or limiting the implied warranty of mer- 13 chantability and fitness for use, unless a disclaimer is clearly 14 and conspicuously disclosed. 15 (q) Representing or implying that the subject of a consumer 16 transaction will be provided promptly, or at a specified time, or 17 within a reasonable time, if the merchant knows or has reason to 18 know it will not be so provided. 19 (r) Representing that a consumer will receive goods or serv- 20 ices "free",OR "without charge", or USING words of similar 21 import IN THE REPRESENTATION, without clearly and conspicuously 22 disclosing with equal prominence in immediate conjunction with 23 the use of those words the conditions, terms, or prerequisites to 24 the use or retention of the goods or services advertised. 25 (s) Failing to reveal a material fact, the omission of which 26 tends to mislead or deceive the consumer, and which fact could 27 not reasonably be known by the consumer. 06621'02 4 1 (t) Entering into a consumer transaction in which the 2 consumer waives or purports to waive a right, benefit, or immu- 3 nity provided by law, unless the waiver is clearly stated and the 4 consumer has specifically consented to it. 5 (u) Failing, in a consumer transaction that is rescinded, 6 canceled, or otherwise terminated in accordance with the terms of 7 an agreement, advertisement, representation, or provision of law, 8 to promptly restore to the person or persons entitled to it a 9 deposit, down payment, or other payment, or in the case of prop- 10 erty traded in but not available, the greater of the agreed value 11 or the fair market value of the property, or to cancel within a 12 specified time or an otherwise reasonable time an acquired secur- 13 ity interest. 14 (v) Taking or arranging for the consumer to sign an acknowl- 15 edgment, certificate, or other writing affirming acceptance, 16 delivery, compliance with a requirement of law, or other per- 17 formance, if the merchant knows or has reason to know that the 18 statement is not true. 19 (w) Representing that a consumer will receive a rebate, dis- 20 count, or other benefit as an inducement for entering into a 21 transaction, if the benefit is contingent on an event to occur 22 subsequent to the consummation of the transaction. 23 (x) Taking advantage of the consumer's inability reasonably 24 to protect his or her interests by reason of disability, illiter- 25 acy, or inability to understand the language of an agreement 26 presented by the other party to the transaction who knows or 27 reasonably should know of the consumer's inability. 06621'02 5 1 (y) Gross discrepancies between the oral representations of 2 the seller and the written agreement covering the same transac- 3 tion or failure of the other party to the transaction to provide 4 the promised benefits. 5 (z) Charging the consumer a price that is grossly in excess 6 of the price at which similar property or services are sold. 7 (aa) Causing coercion and duress as the result of the time 8 and nature of a sales presentation. 9 (bb) Making a representation of fact or statement of fact 10 material to the transaction such that a person reasonably 11 believes the represented or suggested state of affairs to be 12 other than it actually is. 13 (cc) Failing to reveal facts that are material to the trans- 14 action in light of representations of fact made in a positive 15 manner. 16 (dd) Subject to subdivision (ee), representations by the 17 manufacturer of a product or package that the product or package 18 is 1 or more of the following: 19 (i) Except as provided in subparagraph (ii), recycled, recy- 20 clable, degradable, or is of a certain recycled content, in vio- 21 lation of guides for the use of environmental marketing claims, 22published by the federal trade commission, 57 F.R. p 3636323(August 13, 1992)16 C.F.R. PART 260. 24 (ii) For container holding devices regulated under part 163 25 of the natural resources and environmental protection act, 1994 26 PA 451, MCL 324.16301 to 324.16303, representations by a 06621'02 6 1 manufacturer that the container holding device is degradable 2 contrary to the definition provided in that act. 3 (ee) Representing that a product or package is degradable, 4 biodegradable, or photodegradable unless it can be substantiated 5 by evidence that the product or package will completely decompose 6 into elements found in nature within a reasonably short period of 7 time after consumers use the product and dispose of the product 8 or the package in a landfill or composting facility, as 9 appropriate. 10 (ff) Offering a consumer a prize if in order to claim the 11 prize the consumer is required to submit to a sales presentation, 12 unless a written disclosure is given to the consumer at the time 13 the consumer is notified of the prize and the written disclosure 14 meets all of the following requirements: 15 (i) Is written or printed in a bold type that is not smaller 16 than 10-point. 17 (ii) Fully describes the prize, including its cash value, 18 won by the consumer. 19 (iii) Contains all the terms and conditions for claiming the 20 prize, including a statement that the consumer is required to 21 submit to a sales presentation. 22 (iv) Fully describes the product, real estate, investment, 23 service, membership, or other item that is or will be offered for 24 sale, including the price of the least expensive item and the 25 most expensive item. 26 (gg) Having an independent courier service or other third 27 party pick up a consumer's payment on a home solicitation sale 06621'02 7 1 during the period the consumer is entitled to cancel the sale 2 under 1971 PA 227, MCL 445.111 to 445.117. 3 (HH) FOR A PERSON ENGAGED IN THE RETAIL SALE OF GOODS, DOING 4 ANY OF THE FOLLOWING IN CONNECTION WITH A GIFT CERTIFICATE FOR 5 RETAIL GOODS: 6 (i) ISSUING A GIFT CERTIFICATE TO A CONSUMER THAT EXPIRES 7 WITHIN A PERIOD OF LESS THAN 1 YEAR. 8 (ii) FAILING TO HONOR A GIFT CERTIFICATE POSSESSED BY A CON- 9 SUMER THAT WAS ISSUED WITHIN 1 YEAR OR THE TIME PERIOD SPECIFIED 10 IN THE GIFT CERTIFICATE, WHICHEVER IS GREATER. 11 (iii) ISSUING A GIFT CERTIFICATE TO A CONSUMER ON OR AFTER 12 THE DATE OF FILING OF A BANKRUPTCY PETITION BY THE ISSUER OR THE 13 CREDITORS OF THE ISSUER. 14 (iv) ISSUING A GIFT CERTIFICATE TO A CONSUMER AFTER THE 15 ISSUER HAS DECIDED TO GO OUT OF BUSINESS, OR KNOWS IT IS LIKELY 16 THAT THE ISSUER WILL GO OUT OF BUSINESS, WITHIN 1 YEAR OR THE 17 TIME PERIOD SPECIFIED IN THE GIFT CERTIFICATE, WHICHEVER IS 18 GREATER. 19 (II) FOR A PERSON WHO ACQUIRES ALL OR SUBSTANTIALLY ALL OF 20 THE ASSETS LOCATED IN THIS STATE OF A PERSON ENGAGED IN THE 21 RETAIL SALE OF GOODS AND WHO ENGAGES IN THE RETAIL SALE OF GOODS 22 IN THIS STATE, FAILING TO HONOR AN UNEXPIRED GIFT CERTIFICATE FOR 23 RETAIL GOODS ISSUED BY THE ASSET TRANSFEROR AND TENDERED TO THE 24 PERSON BY A CONSUMER. 25 (2) The attorney general may promulgate rules to implement 26 this act under the administrative procedures act of 1969, 1969 27 PA 306, MCL 24.201 to 24.328. The rules shall not create an 06621'02 8 1 additional unfair trade practice not already enumerated by this 2 section. However, to assure national uniformity, rules shall not 3 be promulgated to implement subsection (1)(dd) or (ee). 06621'02 Final page. DAM