HOUSE DOCKET, NO. 1324        FILED ON: 1/20/2011

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1014

The Commonwealth of Massachusetts

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PRESENTED BY:

Timothy R. Madden

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act to prohibit negative option sales and disclosure of financial and personal information without a consumer’s express agreement.

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PETITION OF:

HOUSE DOCKET, NO. 1324        FILED ON: 1/20/2011

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1014

The Commonwealth of Massachusetts

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In the Year Two Thousand Eleven

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An Act to prohibit negative option sales and disclosure of financial and personal information without a consumer’s express agreement.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

Section 1. Chapter 93 of the General Laws, as appearing in the 2008 official edition, is hereby amended by inserting after section 114, the following 3 new sections:-

“Section 115.  Definitions

As used in sections 115 to 117, inclusive, the following words shall, unless the context clearly requires otherwise, have the following meanings:—

“Financial Institution”, an institution (public or private) that collects funds (from the public or other institutions) and invests them in financial assets

“Seller”, any person, firm, corporation, partnership, unincorporated association, franchise, franchisor, or other business enterprise which promotes or exchanges goods or services for money

Section 116. Required disclosures

(a)    Required disclosures to consumers, charges after trial period

In a sale agreed to by a voluntary 2-way communication between a seller and a customer, a seller may not charge a customer for a good or service after a trial period unless, prior to the charge, the customer expressly agrees to be charged for the good or service if the consumer does not cancel the sale. At least 15 days prior to any charge, or 10 days prior to any charge if the good or service for which the customer will be charged is physically delivered to the customer on a weekly or more frequent basis, the seller shall provide a customer with a clearly written description of the agreement, the good or service being purchased, the amount being charged and the calendar date the customer will be charged for the good or service if the customer does not cancel the sale. This notice also must provide the specific steps by which the customer can either expressly agree to, or cancel the agreement by mail or telephone. The seller has the burden of proving that the customer expressly agreed to this arrangement and that the required written notices were provided within the time limits set forth in this section.

(b)   Violations

A seller who violates this section commits an unfair and deceptive act and a violation of chapter 93A.

Section 117.  Prohibited disclosures

(a)      Disclosure of financial and personal information prohibited

Except as otherwise expressly provided in this chapter, a financial institution, its officers, employees, agents and directors shall not disclose any financial or personal information relating to a customer.  Financial institutions shall adopt reasonable procedures to assure compliance with this subchapter.

(b)     Exceptions

This section does not prohibit any of the activities listed in this subsection.  This subsection shall not be construed to require any financial institution to make any disclosure not otherwise required by law.  This subsection shall not be construed to require or encourage any financial institution to alter any procedures or practices not inconsistent with this section.  This subsection shall not be construed to expand or create any authority in any person or entity other than a financial institution.

(1)   Disclosure of information to the customer after proper identification.

(2)   Disclosure authorized by the customer, provided the disclosure is limited to the scope and purpose that the customer authorizes.

(c)    Violations

A financial institution who violates this section commits an unfair and deceptive act and a violation of chapter 93A.