Citations Affected: IC 24-4.7-3-6; IC 24-5-0.5.
Synopsis: Unsolicited facsimile advertisements. Provides that the
transmission of an unsolicited facsimile advertisement is actionable as
a deceptive consumer sale. Authorizes the attorney general to recover
civil penalties up to $1,500 for the transmission of an unsolicited
facsimile advertisement. Deposits the civil penalties in the consumer
protection division telephone solicitation fund.
Effective: January 1, 2007.
January 10, 2006, read first time and referred to Committee on Corrections, Criminal, and
A BILL FOR AN ACT to amend the Indiana Code concerning trade
to the state general fund. However, if the amount of money in the fund
at the end of a particular state fiscal year exceeds two hundred
thousand dollars ($200,000), the treasurer of state shall transfer the
excess from the fund to the state general fund.
transaction to which the act relates to conform to the
reasonable expectations of the consumer generated by such
deceptive act and to perform such offer if accepted by the
(B) to offer in writing to rescind such consumer transaction and to perform such offer if accepted by the consumer.
The term includes an offer in writing of one (1) or more items of value, including monetary compensation, that the supplier delivers to a consumer or a representative of the consumer if accepted by the consumer.
(6) "Offer to cure" as applied to a deceptive act is a cure that:
(A) is reasonably calculated to remedy a loss claimed by the consumer; and
(B) includes a minimum additional amount that is the greater of:
(i) ten percent (10%) of the value of the remedy under clause (A), but not more than four thousand dollars ($4,000); or
(ii) five hundred dollars ($500);
as compensation for attorney's fees, expenses, and other costs that a consumer may incur in relation to the deceptive act.
(7) "Uncured deceptive act" means a deceptive act:
(A) with respect to which a consumer who has been damaged by such act has given notice to the supplier under section 5(a) of this chapter; and
(i) no offer to cure has been made to such consumer within thirty (30) days after such notice; or
(ii) the act has not been cured as to such consumer within a reasonable time after the consumer's acceptance of the offer to cure.
(8) "Incurable deceptive act" means a deceptive act done by a supplier as part of a scheme, artifice, or device with intent to defraud or mislead. The term includes a failure of a transferee of structured settlement payment rights to timely provide a true and complete disclosure statement to a payee as provided under IC 34-50-2 in connection with a direct or indirect transfer of structured settlement payment rights.
(9) "Pyramid promotional scheme" means any program utilizing a pyramid or chain process by which a participant in the program gives a valuable consideration exceeding one hundred dollars ($100) for the opportunity or right to receive compensation or
other things of value in return for inducing other persons to
become participants for the purpose of gaining new participants
in the program. The term does not include ordinary sales of goods
or services to persons who are not purchasing in order to
participate in such a scheme.
(10) "Promoting a pyramid promotional scheme" means:
(A) inducing or attempting to induce one (1) or more other persons to become participants in a pyramid promotional scheme; or
(B) assisting another in promoting a pyramid promotional scheme.
(11) "Elderly person" means an individual who is at least sixty-five (65) years of age.
(12) "Unsolicited facsimile advertisement" means material that:
(A) advertises the commercial availability or the quality of any property, good, or service; and
(B) is transmitted to a person without the person's prior express invitation or permission by equipment that has the capacity to transcribe text or images, or both, from:
(i) paper into an electronic signal and to transmit that signal over a regular telephone line; or
(ii) an electronic signal received over a regular telephone line onto paper.
(b) As used in section 3(a)(15) of this chapter:
(1) "Directory assistance" means the disclosure of telephone number information in connection with an identified telephone service subscriber by means of a live operator or automated service.
(2) "Local telephone directory" refers to a telephone classified advertising directory or the business section of a telephone directory that is distributed by a telephone company or directory publisher to subscribers located in the local exchanges contained in the directory. The term includes a directory that includes listings of more than one (1) telephone company.
(3) "Local telephone number" refers to a telephone number that has the three (3) number prefix used by the provider of telephone service for telephones physically located within the area covered by the local telephone directory in which the number is listed. The term does not include long distance numbers or 800-, 888-, or 900- exchange numbers listed in a local telephone directory.
FOLLOWS [EFFECTIVE JANUARY 1, 2007]: Sec. 3. (a) The
following acts or representations as to the subject matter of a consumer
either orally, or in writing, or by electronic
communication, by a supplier, are deceptive acts:
(1) That such subject of a consumer transaction has sponsorship, approval, performance, characteristics, accessories, uses, or benefits it does not have which the supplier knows or should reasonably know it does not have.
(2) That such subject of a consumer transaction is of a particular standard, quality, grade, style, or model, if it is not and if the supplier knows or should reasonably know that it is not.
(3) That such subject of a consumer transaction is new or unused, if it is not and if the supplier knows or should reasonably know that it is not.
(4) That such subject of a consumer transaction will be supplied to the public in greater quantity than the supplier intends or reasonably expects.
(5) That replacement or repair constituting the subject of a consumer transaction is needed, if it is not and if the supplier knows or should reasonably know that it is not.
(6) That a specific price advantage exists as to such subject of a consumer transaction, if it does not and if the supplier knows or should reasonably know that it does not.
(7) That the supplier has a sponsorship, approval, or affiliation in such consumer transaction
he the supplier does not have, and
which the supplier knows or should reasonably know that he the
supplier does not have.
(8) That such consumer transaction involves or does not involve a warranty, a disclaimer of warranties, or other rights, remedies, or obligations, if the representation is false and if the supplier knows or should reasonably know that the representation is false.
(9) That the consumer will receive a rebate, discount, or other benefit as an inducement for entering into a sale or lease in return for giving the supplier the names of prospective consumers or otherwise helping the supplier to enter into other consumer transactions, if earning the benefit, rebate, or discount is contingent upon the occurrence of an event subsequent to the time the consumer agrees to the purchase or lease.
(10) That the supplier is able to deliver or complete the subject of the consumer transaction within a stated period of time, when the supplier knows or should reasonably know
he the supplier could
not. If no time period has been stated by the supplier, there is a
presumption that the supplier has represented that
he the supplier
will deliver or complete the subject of the consumer transaction
within a reasonable time, according to the course of dealing or the
usage of the trade.
(11) That the consumer will be able to purchase the subject of the consumer transaction as advertised by the supplier, if the supplier does not intend to sell it.
(12) That the replacement or repair constituting the subject of a consumer transaction can be made by the supplier for the estimate the supplier gives a customer for the replacement or repair, if the specified work is completed and:
(A) the cost exceeds the estimate by an amount equal to or greater than ten percent (10%) of the estimate;
(B) the supplier did not obtain written permission from the customer to authorize the supplier to complete the work even if the cost would exceed the amounts specified in clause (A);
(C) the total cost for services and parts for a single transaction is more than seven hundred fifty dollars ($750); and
(D) the supplier knew or reasonably should have known that the cost would exceed the estimate in the amounts specified in clause (A).
(13) That the replacement or repair constituting the subject of a consumer transaction is needed, and that the supplier disposes of the part repaired or replaced earlier than seventy-two (72) hours after both:
(A) the customer has been notified that the work has been completed; and
(B) the part repaired or replaced has been made available for examination upon the request of the customer.
(14) Engaging in the replacement or repair of the subject of a consumer transaction if the consumer has not authorized the replacement or repair, and if the supplier knows or should reasonably know that it is not authorized.
(15) The act of misrepresenting the geographic location of the supplier by listing a fictitious business name or an assumed business name (as described in IC 23-15-1) in a local telephone directory if:
(A) the name misrepresents the supplier's geographic location;
(B) the listing fails to identify the locality and state of the supplier's business;
(C) calls to the local telephone number are routinely forwarded or otherwise transferred to a supplier's business location that
is outside the calling area covered by the local telephone
(D) the supplier's business location is located in a county that is not contiguous to a county in the calling area covered by the local telephone directory.
(16) The act of listing a fictitious business name or assumed business name (as described in IC 23-15-1) in a directory assistance database if:
(A) the name misrepresents the supplier's geographic location;
(B) calls to the local telephone number are routinely forwarded or otherwise transferred to a supplier's business location that is outside the local calling area; and
(C) the supplier's business location is located in a county that is not contiguous to a county in the local calling area.
(17) That the supplier violated IC 24-3-4 concerning cigarettes for import or export.
(18) That a supplier knowingly sells or resells a product to a consumer if the product has been recalled, whether by the order of a court or a regulatory body, or voluntarily by the manufacturer, distributor, or retailer unless the product has been repaired or modified to correct the defect that was the subject of the recall.
(19) That the supplier violated 47 U.S.C. 227, including any rules or regulations issued under 47 U.S.C. 227.
(b) Any representations on or within a product or its packaging or in advertising or promotional materials which would constitute a deceptive act shall be the deceptive act both of the supplier who places such representation thereon or therein, or who authored such materials, and such other suppliers who shall state orally or in writing that such representation is true if such other supplier shall know or have reason to know that such representation was false.
(c) If a supplier shows by a preponderance of the evidence that an act resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid the error, such act shall not be deceptive within the meaning of this chapter.
(d) It shall be a defense to any action brought under this chapter that the representation constituting an alleged deceptive act was one made in good faith by the supplier without knowledge of its falsity and in reliance upon the oral or written representations of the manufacturer, the person from whom the supplier acquired the product, any testing organization, or any other person provided that the source thereof is disclosed to the consumer.
damages awarded to a person under this section have priority over any
civil penalty imposed under this chapter.
(b) Any person who is entitled to bring an action under subsection (a) on the person's own behalf against a supplier for damages for a deceptive act may bring a class action against such supplier on behalf of any class of persons of which that person is a member and which has been damaged by such deceptive act, subject to and under the Indiana Rules of Trial Procedure governing class actions, except as herein expressly provided. Except as provided in subsection (j), the court may award reasonable attorney fees to the party that prevails in a class action under this subsection, provided that such fee shall be determined by the amount of time reasonably expended by the attorney and not by the amount of the judgment, although the contingency of the fee may be considered. Any money or other property recovered in a class action under this subsection which cannot, with due diligence, be restored to consumers within one (1) year after the judgment becomes final shall be returned to the party depositing the same. This subsection does not apply to a consumer transaction in real property, except for purchases of time shares and camping club memberships. Actual damages awarded to a class have priority over any civil penalty imposed under this chapter.
(c) The attorney general may bring an action to enjoin a deceptive act. However, the attorney general may seek to enjoin patterns of incurable deceptive acts with respect to consumer transactions in real property. In addition, the court may:
(1) issue an injunction;
(2) order the supplier to make payment of the money unlawfully received from the aggrieved consumers to be held in escrow for distribution to aggrieved consumers;
(3) order the supplier to pay to the state the reasonable costs of the attorney general's investigation and prosecution related to the action; and
(4) provide for the appointment of a receiver.
(d) In an action under subsection (a), (b), or (c), the court may void or limit the application of contracts or clauses resulting from deceptive acts and order restitution to be paid to aggrieved consumers.
(e) In any action under subsection (a) or (b), upon the filing of the complaint or on the appearance of any defendant, claimant, or any other party, or at any later time, the trial court, the supreme court, or the court of appeals may require the plaintiff, defendant, claimant, or any other party or parties to give security, or additional security, in such sum as the court shall direct to pay all costs, expenses, and
disbursements that shall be awarded against that party or which that
party may be directed to pay by any interlocutory order by the final
judgment or on appeal.
(f) Any person who violates the terms of an injunction issued under subsection (c) shall forfeit and pay to the state a civil penalty of not more than fifteen thousand dollars ($15,000) per violation. For the purposes of this section, the court issuing an injunction shall retain jurisdiction, the cause shall be continued, and the attorney general acting in the name of the state may petition for recovery of civil penalties. Whenever the court determines that an injunction issued under subsection (c) has been violated, the court shall award reasonable costs to the state.
(g) If a court finds any person has knowingly violated section 3 or 10 of this chapter, other than section 3(a)(19) of this chapter, the attorney general, in an action pursuant to subsection (c), may recover from the person on behalf of the state a civil penalty of a fine not exceeding five thousand dollars ($5,000) per violation.
(h) If a court finds that a person has violated section 3(a)(19) of this chapter, the attorney general, in an action under subsection (c), may recover from the person on behalf of the state a civil penalty as follows:
(1) For a knowing or intentional violation, one thousand five hundred dollars ($1,500).
(2) For a violation other than a knowing or intentional violation, five hundred dollars ($500).
A civil penalty recovered under this subsection shall be deposited in the consumer protection division telephone solicitation fund established by IC 24-4.7-3-6 to be used for the administration and enforcement of section 3(a)(19) of this chapter.
(h) (i) An elderly person relying upon an uncured or incurable
deceptive act, including an act related to hypnotism, may bring an
action to recover treble damages, if appropriate.
(i) (j) An offer to cure is:
(1) not admissible as evidence in a proceeding initiated under this section unless the offer to cure is delivered by a supplier to the consumer or a representative of the consumer before the supplier files the supplier's initial response to a complaint; and
(2) only admissible as evidence in a proceeding initiated under this section to prove that a supplier is not liable for attorney's fees under subsection
If the offer to cure is timely delivered by the supplier, the supplier may submit the offer to cure as evidence to prove in the proceeding in
accordance with the Indiana Rules of Trial Procedure that the supplier
made an offer to cure.
(j) (k) A supplier may not be held liable for the attorney's fees and
court costs of the consumer that are incurred following the timely
delivery of an offer to cure as described in subsection (i) (j) unless the
actual damages awarded, not including attorney's fees and costs, exceed
the value of the offer to cure.