1-1 By: Bernsen S.B. No. 1637
1-2 (In the Senate - Filed March 9, 2001; March 14, 2001, read
1-3 first time and referred to Committee on Business and Commerce;
1-4 March 29, 2001, reported favorably by the following vote: Yeas 7,
1-5 Nays 0; March 29, 2001, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to discount cards deceptively marketed as insurance.
1-9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10 SECTION 1. Subsection (b), Section 17.46, Business &
1-11 Commerce Code, is amended to read as follows:
1-12 (b) Except as provided in Subsection (d) of this section,
1-13 the term "false, misleading, or deceptive acts or practices"
1-14 includes, but is not limited to, the following acts:
1-15 (1) passing off goods or services as those of another;
1-16 (2) causing confusion or misunderstanding as to the
1-17 source, sponsorship, approval, or certification of goods or
1-18 services;
1-19 (3) causing confusion or misunderstanding as to
1-20 affiliation, connection, or association with, or certification by,
1-21 another;
1-22 (4) using deceptive representations or designations of
1-23 geographic origin in connection with goods or services;
1-24 (5) representing that goods or services have
1-25 sponsorship, approval, characteristics, ingredients, uses,
1-26 benefits, or quantities which they do not have or that a person has
1-27 a sponsorship, approval, status, affiliation, or connection which
1-28 he does not;
1-29 (6) representing that goods are original or new if
1-30 they are deteriorated, reconditioned, reclaimed, used, or
1-31 secondhand;
1-32 (7) representing that goods or services are of a
1-33 particular standard, quality, or grade, or that goods are of a
1-34 particular style or model, if they are of another;
1-35 (8) disparaging the goods, services, or business of
1-36 another by false or misleading representation of facts;
1-37 (9) advertising goods or services with intent not to
1-38 sell them as advertised;
1-39 (10) advertising goods or services with intent not to
1-40 supply a reasonable expectable public demand, unless the
1-41 advertisements disclosed a limitation of quantity;
1-42 (11) making false or misleading statements of fact
1-43 concerning the reasons for, existence of, or amount of price
1-44 reductions;
1-45 (12) representing that an agreement confers or
1-46 involves rights, remedies, or obligations which it does not have or
1-47 involve, or which are prohibited by law;
1-48 (13) knowingly making false or misleading statements
1-49 of fact concerning the need for parts, replacement, or repair
1-50 service;
1-51 (14) misrepresenting the authority of a salesman,
1-52 representative or agent to negotiate the final terms of a consumer
1-53 transaction;
1-54 (15) basing a charge for the repair of any item in
1-55 whole or in part on a guaranty or warranty instead of on the value
1-56 of the actual repairs made or work to be performed on the item
1-57 without stating separately the charges for the work and the charge
1-58 for the warranty or guaranty, if any;
1-59 (16) disconnecting, turning back, or resetting the
1-60 odometer of any motor vehicle so as to reduce the number of miles
1-61 indicated on the odometer gauge;
1-62 (17) advertising of any sale by fraudulently
1-63 representing that a person is going out of business;
1-64 (18) selling, advertising, or distributing a card or
2-1 other purchasing device that is not insurance or evidence of
2-2 insurance coverage and that purports to provide a discount or
2-3 access to a discount on the purchase of health care goods or
2-4 services, or making a representation that such a card or purchasing
2-5 device provides such a discount, unless:
2-6 (A) the discount is specifically and expressly
2-7 authorized under a separate contract with a provider of health care
2-8 goods or services; and
2-9 (B) the card or other purchasing device contains
2-10 a notice expressly and conspicuously printed in boldface type that
2-11 the discounts provided are not insurance;
2-12 (19) using or employing a chain referral sales plan in
2-13 connection with the sale or offer to sell of goods, merchandise, or
2-14 anything of value, which uses the sales technique, plan,
2-15 arrangement, or agreement in which the buyer or prospective buyer
2-16 is offered the opportunity to purchase merchandise or goods and in
2-17 connection with the purchase receives the seller's promise or
2-18 representation that the buyer shall have the right to receive
2-19 compensation or consideration in any form for furnishing to the
2-20 seller the names of other prospective buyers if receipt of the
2-21 compensation or consideration is contingent upon the occurrence of
2-22 an event subsequent to the time the buyer purchases the merchandise
2-23 or goods;
2-24 (20) [(19)] representing that a guarantee or warranty
2-25 confers or involves rights or remedies which it does not have or
2-26 involve, provided, however, that nothing in this subchapter shall
2-27 be construed to expand the implied warranty of merchantability as
2-28 defined in Sections 2.314 through 2.318 and Sections 2A.212 through
2-29 2A.216 [of the Business & Commerce Code] to involve obligations in
2-30 excess of those which are appropriate to the goods;
2-31 (21) [(20)] promoting a pyramid promotional scheme, as
2-32 defined by Section 17.461;
2-33 (22) [(21)] representing that work or services have
2-34 been performed on, or parts replaced in, goods when the work or
2-35 services were not performed or the parts replaced;
2-36 (23) [(22)] filing suit founded upon a written
2-37 contractual obligation of and signed by the defendant to pay money
2-38 arising out of or based on a consumer transaction for goods,
2-39 services, loans, or extensions of credit intended primarily for
2-40 personal, family, household, or agricultural use in any county
2-41 other than in the county in which the defendant resides at the time
2-42 of the commencement of the action or in the county in which the
2-43 defendant in fact signed the contract; provided, however, that a
2-44 violation of this subsection shall not occur where it is shown by
2-45 the person filing such suit he neither knew or had reason to know
2-46 that the county in which such suit was filed was neither the county
2-47 in which the defendant resides at the commencement of the suit nor
2-48 the county in which the defendant in fact signed the contract;
2-49 (24) [(23)] failing [the failure] to disclose
2-50 information concerning goods or services which was known at the
2-51 time of the transaction if such failure to disclose such
2-52 information was intended to induce the consumer into a transaction
2-53 into which the consumer would not have entered had the information
2-54 been disclosed;
2-55 (25) [(24)] using the term "corporation,"
2-56 "incorporated," or an abbreviation of either of those terms in the
2-57 name of a business entity that is not incorporated under the laws
2-58 of this state or another jurisdiction; or
2-59 (26) [(25)] taking advantage of a disaster declared by
2-60 the governor under Chapter 418, Government Code, by:
2-61 (A) selling or leasing fuel, food, medicine, or
2-62 another necessity at an exorbitant or excessive price; or
2-63 (B) demanding an exorbitant or excessive price
2-64 in connection with the sale or lease of fuel, food, medicine, or
2-65 another necessity.
2-66 SECTION 2. This Act takes effect September 1, 2001.
2-67 * * * * *