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Alaska State Representative Kevin Meyer News and Information

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House Passes Consumer Protection Bill
HB 339 Protects Consumers From Fraudulent Marketing Practices
Alaska State Legislature
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Attachments Attachments
 
Released:
April 7, 2004
Suzanne Cunningham
465-6879 (Jan-May)
269-0199 (Jun-Dec)

"Some businesses see the use of opt-out marketing plans and free trial periods as a successful marketing ploy; enabling a business to get a product out to a critical number of people, without fully disclosing the terms and consumer obligations of the plan, and receiving compensation through unwilling and/or uneducated consumers."
- Rep. Meyer

 

(JUNEAU) - The House of Representatives unanimously passed HB 339 relating to Trade Practices today. Sponsored by Rep. Kevin Meyer (R-Anchorage), HB 339 prohibits the use of opt-out marketing plans and free trial period plans unless specific requirements and disclosures are made by the business to the consumer.

"Some businesses see the use of opt-out marketing plans and free trial periods as a successful marketing ploy; enabling a business to get a product out to a critical number of people, without fully disclosing the terms and consumer obligations of the plan, and receiving compensation through unwilling and/or uneducated consumers," said Meyer.

HB 339 establishes clear guidelines for businesses to follow that do not result in consumer deception. The required disclosures include: providing information pertaining to charges, how charges are calculated and collected, a description of the consumer's right to cancel, and any and all consumer obligations under these plans.

Over the past two years, complaints to the Federal Trade Commission (FTC) about unordered merchandise has increased by nearly 60%. Opt-out marketing plans and free trial period scams account for a significant amount of all new reports. Consumers are also turning to state Attorney General Offices' to complain of unfair and deceptive trade practices by businesses engaging in these plans. "Over the past year, there have been a number of high-profile cases in Alaska involving telephone companies, where the State has intervened on behalf of Alaskan consumers," said Meyer.

"HB 339 is an important consumer protection measure, in that it removes any uncertainty of what the role and responsibility is of businesses in protecting consumers and their interests, when using free trial periods and opt-out marketing plans. Businesses will be required to disclose all material terms of these plans, ensuring that consumers can make the best decision possible when accepting goods or services through these introductory type offers," Meyer said.

HB 339 now moves to the Senate for consideration.

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