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PAG LIN
1 1 Section 1. NEW SECTION. 714F.1 DEFINITIONS.
1 2 For the purposes of this chapter:
1 3 1. "Advertisement" means the same as defined in section
1 4 714.16, subsection 1.
1 5 2. "Deception" means the same as defined in section
1 6 714.16, subsection 1.
1 7 3. "Merchandise" means the same as defined in section
1 8 714.16, subsection 1.
1 9 4. "On sale" means an advertisement that states or implies
1 10 that a seller's retail price for merchandise has been reduced,
1 11 including but not limited to advertisements including terms
1 12 such as "sale", "now on sale", "reduced", or "special".
1 13 5. "Person" means the same as defined in section 714.16,
1 14 subsection 1.
1 15 6. "Price comparison" means the direct or implied
1 16 comparison in any advertisement of the seller's current price
1 17 for merchandise with any other price or statement of value for
1 18 the merchandise or the making of other claims of price
1 19 reduction or savings with respect to that merchandise in
1 20 comparison to other merchandise.
1 21 7. "Regular price" means the actual, good faith price at
1 22 which the seller openly and actively offered the merchandise
1 23 to the public on a regular basis, for a reasonable period of
1 24 time in the recent, regular course of the seller's business.
1 25 8. "Seller" means a person who advertises merchandise for
1 26 sale.
1 27 Sec. 2. NEW SECTION. 714F.2 DETERMINATION OF REGULAR
1 28 PRICE.
1 29 In determining whether merchandise was openly and actively
1 30 offered to the public on a regular basis whether a period of
1 31 time was reasonable, or whether a price was in good faith, the
1 32 following factors shall be considered, as applicable: the
1 33 particular merchandise or industry, the season, the number
1 34 sold at the higher price, shelf life, and other material
1 35 factors. If a seller has actively offered a good faith price
2 1 for the fourteen selling days immediately before a price
2 2 reduction, it is presumed that the higher price was offered
2 3 for a reasonable period of time in the recent course of
2 4 business. A seller may use a shorter period of time to
2 5 establish a regular price, but the seller has the burden of
2 6 showing that the shorter time was reasonable and that the
2 7 higher price was a good faith price.
2 8 Sec. 3. NEW SECTION. 714F.3 BASIS FOR COMPARISON –
2 9 DISCLOSURE.
2 10 In any price comparison advertisement, the seller shall
2 11 disclose in the same advertisement the basis for the
2 12 comparison by a clear and conspicuous reference to the
2 13 seller's regular, former, or future price, to a competitor's
2 14 selling price, or to the suggested retail price of the
2 15 manufacturer of the merchandise, as applicable.
2 16 1. SELLER'S REGULAR OR FORMER PRICE.
2 17 a. In any price comparison advertisement of the seller's
2 18 current price to the seller's regular or former price, the
2 19 regular or former price shall be the regular price as defined
2 20 in section 714F.1, subsection 7.
2 21 b. A seller shall not advertise merchandise as being on
2 22 sale or otherwise reduced in price from the seller's regular
2 23 price if, in fact, the price at which the merchandise is
2 24 advertised as being on sale or otherwise reduced in price from
2 25 the seller's regular price is the price for which the
2 26 merchandise was actually sold by the seller for more than six
2 27 months out of any twelve-month period in which the
2 28 advertisement was circulated, broadcast, or posted on an
2 29 internet web site, or, in the case of seasonal merchandise,
2 30 for more than one-half of the time the seasonal merchandise is
2 31 offered for sale by the seller unless the price is permanently
2 32 reduced to sell out the merchandise. An advertisement in
2 33 which the seller clearly and conspicuously discloses the
2 34 period of time when the seller's regular price was in effect
2 35 meets the requirements of this paragraph.
3 1 2. SELLER'S FUTURE PRICE. In any price comparison
3 2 advertisement of a seller's current price to the price at
3 3 which the merchandise will be offered by the seller in the
3 4 future, the seller shall clearly and conspicuously disclose in
3 5 the same advertisement all of the following:
3 6 a. That the price comparison is based on a future price
3 7 increase.
3 8 b. The effective date of the future price increase, if
3 9 more than ninety days after the price comparison, is first
3 10 stated in an advertisement.
3 11 In addition, the future increase to the higher price must
3 12 take effect on the date disclosed in the advertisement or, if
3 13 not disclosed in the advertisement, within ninety days after
3 14 the price comparison is stated in the advertisement, except
3 15 where compliance becomes impossible because of circumstances
3 16 beyond the seller's control, and the seller continues to offer
3 17 the merchandise at the higher price for at least as long as
3 18 the period of time for which the merchandise was advertised at
3 19 the lower comparison price.
3 20 3. COMPETITOR'S SELLING PRICE. In any price comparison
3 21 advertisement of a seller's current price to the price at
3 22 which the seller states or implies a competitor offers the
3 23 merchandise, the higher comparison price shall be one at which
3 24 a competitor located within the retail selling market in which
3 25 the advertisement is circulated or broadcast has actively and
3 26 openly offered the merchandise for sale within ninety days
3 27 prior to the earlier of the dates upon which the seller begins
3 28 circulating or broadcasting the advertisement. A seller which
3 29 advertises current prices in comparison to those of
3 30 competitors specifically named in the advertisement must prove
3 31 that each competitor named actively and openly offered the
3 32 merchandise for sale within ninety days prior to the earlier
3 33 of the dates upon which the seller begins circulating or
3 34 broadcasting the advertisement.
3 35 4. SUGGESTED RETAIL PRICE OF THE MANUFACTURER. In any
4 1 price comparison advertisement of a seller's current price to
4 2 the suggested retail price of the manufacturer of the
4 3 merchandise, the suggested retail price of the manufacturer
4 4 shall be one at which the seller or a competitor or
4 5 competitors located within the retail selling market in which
4 6 the advertisement is circulated or broadcast have actively and
4 7 openly offered the merchandise for sale within ninety days
4 8 prior to the earlier of the dates upon which the seller begins
4 9 circulating or broadcasting the advertisement.
4 10 Sec. 4. NEW SECTION. 714F.4 BURDEN OF PROOF.
4 11 In any action pursuant to this chapter, the burden shall be
4 12 on the seller to prove that a price comparison meets the
4 13 requirements of this chapter.
4 14 Sec. 5. NEW SECTION. 714F.5 CIVIL ENFORCEMENT.
4 15 A violation of this chapter is a violation of section
4 16 714.16, subsection 2, paragraph "a". The remedies and
4 17 penalties provided by section 714.16, including but not
4 18 limited to injunctive relief and civil penalties, apply to
4 19 violations of this chapter. All investigative and enforcement
4 20 authority granted to the attorney general pursuant to section
4 21 714.16 shall be available to the attorney general to enforce
4 22 this chapter, including but not limited to the authority to
4 23 issue subpoenas, compel testimony, hold public hearings, adopt
4 24 rules, and investigate violations. In seeking reimbursement
4 25 pursuant to section 714.16, subsection 7, from a person who
4 26 has committed a violation of this chapter, the attorney
4 27 general may seek an order from the court that the person pay
4 28 to the attorney general on behalf of consumers the amounts for
4 29 which the person would be liable under section 714F.6, for
4 30 each consumer who has a cause of action pursuant to section
4 31 714F.6. Section 714.16, as it relates to consumer
4 32 reimbursement, applies to amounts recovered by the attorney
4 33 general as reimbursement under this chapter. However, a
4 34 consumer who is awarded monetary damages pursuant to section
4 35 714F.6 is not eligible for monetary relief under this section
5 1 for the same unlawful practice.
5 2 Sec. 6. NEW SECTION. 714F.6 PRIVATE ACTION.
5 3 In addition to any other remedy, a consumer who has lost
5 4 money as a result of a violation of this chapter may bring an
5 5 action against the person who committed the violation to
5 6 recover from the person all of the following:
5 7 1. The amount of any moneys or property acquired by the
5 8 person from the consumer by means of a violation of this
5 9 chapter, or two hundred dollars, whichever is greater.
5 10 2. Costs and reasonable attorney fees.
5 11 EXPLANATION
5 12 This bill establishes new Code chapter 714F, which relates
5 13 to comparison price advertising. The new Code chapter sets
5 14 out definitions, including "on sale", meaning an advertisement
5 15 that states or implies that a seller's retail price for
5 16 merchandise has been reduced; "price comparison", meaning the
5 17 direct or implied comparison in any advertisement of the
5 18 seller's current price for merchandise with any other price or
5 19 statement of value or claim of price reduction or savings; and
5 20 "regular price", meaning the actual, good faith price at which
5 21 the seller openly and actively offered the merchandise to the
5 22 public on a regular basis, for a reasonable period of time in
5 23 the recent, regular course of the seller's business.
5 24 The bill provides that a seller shall disclose the basis
5 25 for comparison in any comparison advertisement by a clear and
5 26 conspicuous reference to the seller's regular or former price,
5 27 the seller's future price, a competitor's price, or the
5 28 suggested retail price of the manufacturer, and sets out the
5 29 specifics of disclosure in each circumstance.
5 30 The bill provides that the burden of proof is on the seller
5 31 to prove that a price comparison meets the requirements of the
5 32 Code chapter.
5 33 The bill provides that a violation of the new Code chapter
5 34 constitutes a violation of Code section 714.16, subsection 2,
5 35 paragraph "a", that provides that the act of an unfair
6 1 practice, deception, fraud, false promise, or the
6 2 misrepresentation, concealment, suppression or omission of a
6 3 material fact with the intent to induce the reliance of others
6 4 is an unlawful practice. Under Code chapter 714, a conviction
6 5 ranges from a first degree to a fifth degree fraudulent
6 6 practice, depending on the amount of money, or value of
6 7 property or services involved. The attorney general is
6 8 granted authority to enforce the new Code chapter as an
6 9 equitable action as provided in Code section 714.16, including
6 10 the authority to issue subpoenas, compel testimony, hold
6 11 public hearings, adopt rules, and investigate violations. The
6 12 attorney general may seek reimbursement on behalf of consumers
6 13 from a person who has committed a violation of this Code
6 14 chapter. A consumer may alternatively bring a private action
6 15 against the person who committed the violation to recover the
6 16 amount of moneys or property acquired by means of a violation
6 17 of the Code chapter, or $200, whichever is greater, plus
6 18 attorney fees and costs. A consumer who recovers monetary
6 19 damages by private action is not eligible for any share of
6 20 monetary damages recovered by the attorney general for the
6 21 same unlawful practice.
6 22 LSB 2516HH 79
6 23 vl/pj/5
Text: HF00630 Text: HF00632 Text: HF00600 - HF00699 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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