Senate File 347 - Introduced





                                       SENATE FILE       
                                       BY  McCOY


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to specified types of business solicitations,
  2    providing an exception from applicability of certain
  3    requirements for sales conducted by mail, the telephone, or
  4    the internet.
  5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  6 TLSB 2566XS 83
  7 rn/rj/8

PAG LIN



  1  1    Section 1.  Section 552A.1, subsection 1, Code 2009, is
  1  2 amended to read as follows:
  1  3    1.  "Buying club" means a corporation, partnership,
  1  4 unincorporated association, or other business enterprise which
  1  5 sells or offers for sale to the general public generally
  1  6 memberships or certificates of membership.
  1  7    Sec. 2.  Section 552A.1, subsection 3, Code 2009, is
  1  8 amended to read as follows:
  1  9    3.  "Membership" means certificates, memberships, shares,
  1 10 bonds, contracts, stocks, or agreements of any kind or
  1 11 character issued upon any plan offered generally to the
  1 12 general public entitling the holder to purchase merchandise,
  1 13 materials, equipment, or service, either from the issuer or
  1 14 another person designated by the issuer, either under a
  1 15 franchise or otherwise, whether it be at a discount, at cost
  1 16 plus a percentage, at cost plus a fixed amount, at a fixed
  1 17 price, or on any other similar basis.
  1 18    Sec. 3.  Section 552A.3, Code 2009, is amended to read as
  1 19 follows:
  1 20    552A.3  RIGHT OF CANCELLATION == REQUIREMENT OF WRITING.
  1 21    The requirements of sections 555A.1 through 555A.5,
  1 22 relating to door=to=door sales, shall apply to sales of buying
  1 23 club memberships, irrespective of the place or manner of sale
  1 24 or the purpose for which they are purchased, except those that
  1 25 are conducted and consummated entirely by mail, the telephone,
  1 26 or the internet and without any other contact between the
  1 27 buyer and the seller or its representative prior to delivery
  1 28 of the goods or performance of the service.  In addition to
  1 29 the requirements of chapter 555A, a contract shall not be
  1 30 enforceable against a person acquiring resulting from any such
  1 31 sale of a membership in a buying club shall not be enforceable
  1 32 against the purchaser unless the contract is in writing and
  1 33 signed by the purchaser.
  1 34    Sec. 4.  Section 555A.1, subsection 3, paragraph a,
  1 35 subparagraph (4), Code 2009, is amended to read as follows:
  2  1    (4)  Conducted and consummated entirely by mail or, the
  2  2 telephone, or the internet and without any other contact
  2  3 between the buyer and the seller or its representative prior
  2  4 to delivery of the goods or performance of the services.
  2  5                           EXPLANATION
  2  6    This bill relates to sales of buying club memberships that
  2  7 are conducted by mail, by telephone, or over the internet
  2  8 rather than sold in person directly between the seller and the
  2  9 purchaser.
  2 10    Code section 552A.3 currently applies the requirements of
  2 11 Code sections 555A.1 through 555A.5, dealing primarily with
  2 12 notice of cancellation rights and contract rescission in
  2 13 door=to=door sales situations, to the sale of buying club
  2 14 memberships.  The bill restricts the applicability of those
  2 15 provisions to sales other than sales conducted and consummated
  2 16 entirely by mail, the telephone, or the internet and without
  2 17 any other contact between the buyer and the seller or its
  2 18 representative prior to delivery or performance.  This change
  2 19 is consistent with Code section 555A.1, subsection 3,
  2 20 paragraph "a", subparagraph (4), which exempts such
  2 21 transactions from the definition of a door=to=door sale.
  2 22    The bill also rephrases a provision in Code section 552A.3
  2 23 regarding lack of nonenforceability of a buying club
  2 24 membership contract unless the contract is in writing and
  2 25 signed by the purchaser, specifying that this provision
  2 26 applies to a purchaser, as opposed to a "person acquiring" a
  2 27 buying club membership contract.
  2 28    The bill adds internet sales to the exemptions from the
  2 29 definition of a door=to=door sale, to promote consistency
  2 30 between the respective chapters.
  2 31 LSB 2566XS 83
  2 32 rn/rj/8