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A BILL TO BE ENTITLED
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AN ACT
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relating to the cancellation of travel club membership agreements; |
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providing a civil penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 12, Business & Commerce Code, is amended by |
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adding Chapter 601A to read as follows: |
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CHAPTER 601A. CANCELLATION OF AGREEMENT FOR TRAVEL CLUB MEMBERSHIP |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 601A.001. DEFINITIONS. In this chapter: |
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(1) "Purchaser" means an individual who enters into an |
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agreement with a seller to purchase a travel club membership. |
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(2) "Seller" means a person who offers to sell or sells |
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a travel club membership. |
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(3) "Travel club membership" means a membership that |
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gives its members the right to purchase or obtain travel services |
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from or through a seller. |
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(4) "Travel service" means the arranging or booking |
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of: |
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(A) a vacation or travel package; |
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(B) a reservation for rental of a motor vehicle; |
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(C) a ticket for domestic or foreign travel by |
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any mode of transportation; or |
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(D) a hotel or other lodging. |
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Sec. 601A.002. APPLICABILITY OF CHAPTER. (a) This chapter |
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applies only to an agreement for the purchase of a travel club |
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membership in which: |
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(1) the seller or the seller's agent engages in a |
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personal solicitation of a sale to an individual; and |
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(2) the agreement is for consideration that exceeds |
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$25, payable in installments or in cash. |
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(b) This chapter does not apply to an agreement relating to: |
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(1) a timeshare plan that is in compliance with |
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Chapter 221, Property Code; or |
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(2) the sale of a product or service or a program |
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related to, offered in conjunction with, or used to promote the |
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timeshare plan. |
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[Sections 601A.003-601A.050 reserved for expansion] |
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SUBCHAPTER B. PURCHASER'S RIGHT TO CANCEL AGREEMENT; REQUIRED |
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NOTICES |
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Sec. 601A.051. PURCHASER'S RIGHT TO CANCEL AGREEMENT FOR |
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TRAVEL CLUB MEMBERSHIP. (a) In addition to any other rights or |
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remedies available, a purchaser may cancel an agreement for a |
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travel club membership not later than midnight of the fifth |
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business day after the date the purchaser signs the agreement. |
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(b) A seller may retain payments made by the purchaser for |
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specific travel services used in connection with a travel club |
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membership agreement before the date of the cancellation period |
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prescribed by Subsection (a). |
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Sec. 601A.052. NOTICE OF PURCHASER'S RIGHT TO CANCEL |
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REQUIRED. (a) A seller must provide a purchaser with a copy of an |
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agreement for a travel club membership at the time of the |
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agreement's execution. |
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(b) The copy of the agreement provided under Subsection (a) |
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must: |
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(1) be in the same language as that principally used in |
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the oral sales presentation; |
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(2) contain the date of the agreement; |
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(3) contain the name and address of the seller; and |
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(4) contain a statement: |
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(A) in immediate proximity to the space reserved |
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in the agreement for the signature of the purchaser; and |
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(B) in at least 10-point boldfaced font in |
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substantially the following form: |
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"YOU, THE PURCHASER, MAY CANCEL THIS AGREEMENT FOR TRAVEL |
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CLUB MEMBERSHIP AT ANY TIME BEFORE MIDNIGHT OF THE FIFTH BUSINESS |
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DAY AFTER THE DATE YOU SIGN THIS AGREEMENT. SEE THE ATTACHED NOTICE |
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OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT." |
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Sec. 601A.053. COMPLETED CANCELLATION FORM REQUIRED. (a) |
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A seller must attach to the copy of a travel club membership |
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agreement a completed notice of cancellation form in duplicate. |
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The form must: |
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(1) be easily detachable; |
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(2) be in the same language as the agreement; and |
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(3) contain the following information and statements |
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in at least 10-point boldfaced font: |
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"NOTICE OF CANCELLATION |
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_________________ |
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(enter date of agreement) |
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"YOU MAY CANCEL THIS AGREEMENT FOR TRAVEL CLUB MEMBERSHIP, |
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WITHOUT ANY PENALTY OR OBLIGATION, WITHIN FIVE BUSINESS DAYS AFTER |
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THE ABOVE DATE UNLESS YOU HAVE ALREADY USED ANY TRAVEL SERVICES |
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PROVIDED IN CONNECTION WITH THIS AGREEMENT. |
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"IF YOU HAVE ALREADY USED ANY TRAVEL SERVICES PROVIDED IN |
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CONNECTION WITH THIS AGREEMENT, YOU MAY STILL CANCEL THIS |
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TRANSACTION WITHIN FIVE BUSINESS DAYS AFTER THE DATE OF THE |
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AGREEMENT, BUT YOU ARE NOT ENTITLED TO A REFUND OF ANY PRIOR |
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PAYMENTS MADE FOR THE SPECIFIC TRAVEL SERVICES USED. |
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"IF YOU CANCEL, ANY PAYMENTS MADE BY YOU UNDER THIS AGREEMENT |
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THAT WERE NOT FOR SPECIFIC TRAVEL SERVICES USED WILL BE RETURNED |
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WITHIN 10 BUSINESS DAYS FOLLOWING RECEIPT BY THE SELLER OF YOUR |
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CANCELLATION NOTICE. |
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"TO CANCEL THIS AGREEMENT, MAIL OR DELIVER A SIGNED AND DATED |
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COPY OF THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE, |
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INCLUDING BY E-MAIL OR FACSIMILE, TO (name of seller), AT (address, |
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e-mail address, and fax number of seller's place of business) NOT |
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LATER THAN MIDNIGHT OF (date). |
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I HEREBY CANCEL THIS AGREEMENT. |
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DATE |
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______________________ |
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PURCHASER'S SIGNATURE." |
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(b) A seller may not fail to include on both copies of the |
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form described by Subsection (a): |
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(1) the name of the seller; |
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(2) the address, e-mail address, and fax number of the |
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seller's place of business; |
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(3) the date of the agreement; and |
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(4) a date not earlier than the fifth business day |
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after the date of the agreement by which the purchaser must give |
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notice of cancellation. |
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[Sections 601A.054-601A.100 reserved for expansion] |
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SUBCHAPTER C. PROHIBITED ACTS BY SELLER |
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Sec. 601A.101. WAIVER OF RIGHTS. A seller may not include |
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in an agreement for a travel club membership a waiver of any of the |
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rights to which a purchaser is entitled under this chapter. |
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Sec. 601A.102. FAILURE TO INFORM OR MISREPRESENTATION OF |
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RIGHT TO CANCEL. A seller may not: |
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(1) at the time the purchaser signs the agreement for a |
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travel club membership fail to inform the purchaser orally of the |
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right to cancel the agreement; or |
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(2) misrepresent in any manner the purchaser's right |
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to cancel. |
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Sec. 601A.103. FAILURE TO TAKE CERTAIN ACTIONS FOLLOWING |
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RECEIPT OF NOTICE OF CANCELLATION. A seller may not: |
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(1) fail or refuse to honor a valid cancellation under |
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this chapter by a purchaser; or |
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(2) fail before the end of the 10th business day after |
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the date the seller receives a valid notice of cancellation to: |
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(A) refund all payments made under the agreement |
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that were not for specific travel services used before the |
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cancellation period; or |
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(B) cancel and return any negotiable instrument |
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executed by the purchaser in connection with the agreement for a |
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travel club membership. |
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[Sections 601A.104-601A.150 reserved for expansion] |
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SUBCHAPTER D. ENFORCEMENT |
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Sec. 601A.151. CERTAIN AGREEMENTS VOID. An agreement |
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entered into in violation of this chapter is void. |
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Sec. 601A.152. LIABILITY FOR DAMAGES. A seller who |
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violates this chapter is liable to the purchaser for: |
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(1) actual damages suffered by the purchaser as a |
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result of the violation; |
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(2) reasonable attorney's fees; and |
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(3) court costs. |
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Sec. 601A.153. DECEPTIVE TRADE PRACTICE. A violation of |
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this chapter is a false, misleading, or deceptive act or practice as |
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defined by Section 17.46(b). In addition to any remedy under this |
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chapter, a remedy under Subchapter E, Chapter 17, is also available |
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for a violation of this chapter. |
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Sec. 601A.154. INJUNCTION. If the attorney general |
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believes that a person is violating or about to violate this |
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chapter, the attorney general may bring an action in the name of the |
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state to restrain or enjoin the person from violating this chapter. |
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SECTION 2. The change in law made by this Act applies only |
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to an agreement for a travel club membership entered into on or |
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after the effective date of this Act. An agreement for a travel |
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club membership that is entered into before the effective date of |
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this Act is governed by the law in effect on the date the agreement |
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was entered into, and the former law is continued in effect for that |
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purpose. |
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SECTION 3. This Act takes effect September 1, 2011. |