By: Bernsen, Shapleigh S.B. No. 1637
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to discount cards deceptively marketed as insurance.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subsection (b), Section 17.46, Business &
1-5 Commerce Code, is amended to read as follows:
1-6 (b) Except as provided in Subsection (d) of this section,
1-7 the term "false, misleading, or deceptive acts or practices"
1-8 includes, but is not limited to, the following acts:
1-9 (1) passing off goods or services as those of another;
1-10 (2) causing confusion or misunderstanding as to the
1-11 source, sponsorship, approval, or certification of goods or
1-12 services;
1-13 (3) causing confusion or misunderstanding as to
1-14 affiliation, connection, or association with, or certification by,
1-15 another;
1-16 (4) using deceptive representations or designations of
1-17 geographic origin in connection with goods or services;
1-18 (5) representing that goods or services have
1-19 sponsorship, approval, characteristics, ingredients, uses,
1-20 benefits, or quantities which they do not have or that a person has
1-21 a sponsorship, approval, status, affiliation, or connection which
1-22 he does not;
1-23 (6) representing that goods are original or new if
1-24 they are deteriorated, reconditioned, reclaimed, used, or
1-25 secondhand;
2-1 (7) representing that goods or services are of a
2-2 particular standard, quality, or grade, or that goods are of a
2-3 particular style or model, if they are of another;
2-4 (8) disparaging the goods, services, or business of
2-5 another by false or misleading representation of facts;
2-6 (9) advertising goods or services with intent not to
2-7 sell them as advertised;
2-8 (10) advertising goods or services with intent not to
2-9 supply a reasonable expectable public demand, unless the
2-10 advertisements disclosed a limitation of quantity;
2-11 (11) making false or misleading statements of fact
2-12 concerning the reasons for, existence of, or amount of price
2-13 reductions;
2-14 (12) representing that an agreement confers or
2-15 involves rights, remedies, or obligations which it does not have or
2-16 involve, or which are prohibited by law;
2-17 (13) knowingly making false or misleading statements
2-18 of fact concerning the need for parts, replacement, or repair
2-19 service;
2-20 (14) misrepresenting the authority of a salesman,
2-21 representative or agent to negotiate the final terms of a consumer
2-22 transaction;
2-23 (15) basing a charge for the repair of any item in
2-24 whole or in part on a guaranty or warranty instead of on the value
2-25 of the actual repairs made or work to be performed on the item
2-26 without stating separately the charges for the work and the charge
3-1 for the warranty or guaranty, if any;
3-2 (16) disconnecting, turning back, or resetting the
3-3 odometer of any motor vehicle so as to reduce the number of miles
3-4 indicated on the odometer gauge;
3-5 (17) advertising of any sale by fraudulently
3-6 representing that a person is going out of business;
3-7 (18) selling, advertising, or distributing a card or
3-8 other purchasing device that is not insurance or evidence of
3-9 insurance coverage and that purports to provide a discount or
3-10 access to a discount on the purchase of health care goods or
3-11 services, or making a representation that such a card or purchasing
3-12 device provides such a discount, unless:
3-13 (A) the discount is specifically and expressly
3-14 authorized under a separate contract with a provider of health care
3-15 goods or services; and
3-16 (B) the card or other purchasing device contains
3-17 a notice expressly and conspicuously printed in boldface type that
3-18 the discounts provided are not insurance;
3-19 (19) using or employing a chain referral sales plan in
3-20 connection with the sale or offer to sell of goods, merchandise, or
3-21 anything of value, which uses the sales technique, plan,
3-22 arrangement, or agreement in which the buyer or prospective buyer
3-23 is offered the opportunity to purchase merchandise or goods and in
3-24 connection with the purchase receives the seller's promise or
3-25 representation that the buyer shall have the right to receive
3-26 compensation or consideration in any form for furnishing to the
4-1 seller the names of other prospective buyers if receipt of the
4-2 compensation or consideration is contingent upon the occurrence of
4-3 an event subsequent to the time the buyer purchases the merchandise
4-4 or goods;
4-5 (20) [(19)] representing that a guarantee or warranty
4-6 confers or involves rights or remedies which it does not have or
4-7 involve, provided, however, that nothing in this subchapter shall
4-8 be construed to expand the implied warranty of merchantability as
4-9 defined in Sections 2.314 through 2.318 and Sections 2A.212 through
4-10 2A.216 [of the Business & Commerce Code] to involve obligations in
4-11 excess of those which are appropriate to the goods;
4-12 (21) [(20)] promoting a pyramid promotional scheme, as
4-13 defined by Section 17.461;
4-14 (22) [(21)] representing that work or services have
4-15 been performed on, or parts replaced in, goods when the work or
4-16 services were not performed or the parts replaced;
4-17 (23) [(22)] filing suit founded upon a written
4-18 contractual obligation of and signed by the defendant to pay money
4-19 arising out of or based on a consumer transaction for goods,
4-20 services, loans, or extensions of credit intended primarily for
4-21 personal, family, household, or agricultural use in any county
4-22 other than in the county in which the defendant resides at the time
4-23 of the commencement of the action or in the county in which the
4-24 defendant in fact signed the contract; provided, however, that a
4-25 violation of this subsection shall not occur where it is shown by
4-26 the person filing such suit he neither knew or had reason to know
5-1 that the county in which such suit was filed was neither the county
5-2 in which the defendant resides at the commencement of the suit nor
5-3 the county in which the defendant in fact signed the contract;
5-4 (24) [(23)] failing [the failure] to disclose
5-5 information concerning goods or services which was known at the
5-6 time of the transaction if such failure to disclose such
5-7 information was intended to induce the consumer into a transaction
5-8 into which the consumer would not have entered had the information
5-9 been disclosed;
5-10 (25) [(24)] using the term "corporation,"
5-11 "incorporated," or an abbreviation of either of those terms in the
5-12 name of a business entity that is not incorporated under the laws
5-13 of this state or another jurisdiction; or
5-14 (26) [(25)] taking advantage of a disaster declared by
5-15 the governor under Chapter 418, Government Code, by:
5-16 (A) selling or leasing fuel, food, medicine, or
5-17 another necessity at an exorbitant or excessive price; or
5-18 (B) demanding an exorbitant or excessive price
5-19 in connection with the sale or lease of fuel, food, medicine, or
5-20 another necessity.
5-21 SECTION 2. This Act takes effect September 1, 2001.