BILL ANALYSIS Ó
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|Hearing Date:April 16, 2012 |Bill No:SB |
| |1444 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Curren D. Price, Jr., Chair
Bill No: SB 1444Author:Anderson
As Amended April 11, 2012 Fiscal: Yes
SUBJECT: Assistive devices: warranty: regulations.
SUMMARY: Provides authorization for the Speech-Language Pathology and
Audiology and Hearing Aid Dispensers Board (Board) to adopt
regulations to specify warranty provisions for assistive devices.
Existing law:
1) Authorizes the Board to license and regulate the practice of
speech-language pathology, audiology and the dispensing of hearing
aid devices pursuant to the Speech Language Pathologists and
Audiologists and Hearing Aid Dispensers Licensure Act. (BPC § 2530)
2)Defines the obligations of retail sellers of assistive devices and
provides warranty/right of return provisions for consumers of
assistive devices including exact language to be included in the
notice to consumers. (CC § 1793.02)
3)Provides definitions of assistive devices, hearing aids and hearing
aid dispensers:
a) Assistive Device is defined as: "Any instrument, apparatus,
or contrivance, including any component or part thereof or
accessory thereto, that it used or intended to be used, to assist
an individual with a disability in the mitigation or treatment of
an injury or disease or to assist or affect or replace the
structure or any function of the body or an individual with a
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disability, except that this term does not include lenses and
ophthalmic goods unless they are sold or dispensed to a blind
person and unless they are intended to assist the limited vision
of the person so disabled." (CC 1791 (o))
b) A hearing aid is defined as any wearable instrument or device
designed for or offered for the purpose of aiding or compensating
for impaired human hearing. (BPC § 2538.10 (d))
c) A hearing aid dispenser is a person engaged in the practice of
fitting or selling hearing aids to an individual with impaired
hearing. (BPC § 2538.14)
d) A hearing aid dispenser who is the owner, manager, or
franchisee at a location where hearing aids are fit or sold,
shall be responsible for the adequacy of the fitting or selling
of any hearing aid fit and sold by any licensee or licensees at
that location. (BPC § 2538.39)
4)Provides that the practice of fitting or selling hearing aids
includes those practices used for the purpose of selection and
adaptation of hearing aids, including direct observation of the ear,
testing of hearing in connection with the fitting and selling of
hearing aids, taking of ear mold impressions, fitting or sale of
hearing aids, and any necessary postfitting counseling.
(BPC § 2538.11(a))
5)Provides that it is unlawful for a licensed hearing aid dispenser to
fit or sell a hearing aid unless he or she first does all of the
following: (BPC § 2538.49)
a) Complies with all provisions of state laws and regulations
relating to the fitting or selling of hearing aids.
b) Conducts a direct observation of the purchaser's ear canals.
c) Informs the purchaser of the address and office hours at which
the licensee shall be available for fitting or postfitting
adjustments and servicing of the hearing aid or aids sold.
6)Requires that a hearing aid dispenser shall, upon the consummation
of a sale of a hearing aid, deliver to the purchaser a written
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receipt, signed by or on behalf of the dispenser, containing all of
the following: (BPC § 2538.25)
a) The date of consummation of the sale.
b) Specifications as to the make, serial number, and model number
of the hearing aid
or aids sold.
c) The address of the principal place of business of the
dispenser, and the address and office hours at which the
dispenser shall be available for fitting or postfitting
adjustments and servicing of the hearing aid or aids sold.
d) A statement to the effect that the aid or aids delivered to
the purchaser are used or reconditioned, as the case may be, if
that is the fact.
e) The number of the dispenser's license and the name and license
number of any other hearing aid dispenser or temporary licensee
who provided any recommendation or consultation regarding the
purchase of the hearing aid.
f) The terms of any guarantee or written warranty, required by
Section 1793.02 of the Civil Code, made to the purchaser with
respect to the hearing aid or hearing aids.
This bill: Authorizes the Board to adopt regulations to specify
warranty provisions for assistive devices.
FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1. Purpose. The bill is sponsored by Hearing Healthcare Providers of
California . This bill would authorize the Board to adopt
regulations to carry out the purposes and objectives of the
warranty provisions, thereby clarifying the consumer's right of
return for hearing aid devices.
According to the Author, the lack of clarity of the Song Beverly
Consumer Warranty Act, as applied to warranty provisions for
hearing aids, is detrimental to both the consumer and the provider
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dispensing the device. The provisions do not clearly define the
terms of the 30-day trial period that the consumer is afforded,
which specifies a guarantee of a full refund for the cost of the
hearing aids and all related services, if the consumer is not
satisfied with the hearing aids.
The Author noted that the Song Beverly Consumer Warranty Act
includes the term,
"completion of fitting," which has been interpreted several ways.
As a result, the burden is placed on the provider in order to
determine when the 30-day warranty period starts. Often, these
subjective interpretations lead to disagreements between the
provider and the consumer as "completion of fitting" implies the
level of consumer satisfaction with the initial fit of the hearing
aid device. Basing the start of the warranty period on consumer
satisfaction is difficult to define and enforce.
According to the Author, the Song Beverly Consumer Warranty Act
does not adequately address the period of time, within the first
30-days, when a hearing aid device is not in the possession of the
consumer due to needed adjustments or repairs.
The Author also indicates that other pertinent issues regarding
hearing aid dispensing are not covered in the Song Beverly Consumer
Warranty Act, including the number of trial devices a consumer is
entitled to, documentation of non-possession of the hearing aid by
the consumer, any non-refundable services provided to the hearing
aid device.
Finally, the Author indicates that the lack of clarity and
specificity in the Song Beverly Consumer Warranty Act provisions
result in disputes between consumers and hearing aid dispensers and
ultimately some form of legal recourse or mediation is initiated.
It can be difficult for the Board to mediate such complaints when
the parties involved have different interpretations of their rights
and responsibilities making the facts difficult to substantiate.
2. Background. The Song Beverly Consumer Warranty Act indicates
that the buyer of a used
assistive device shall have the same rights and remedies as the
buyer of a new assistive device. Further, all new and used
assistive devices shall be accompanied by the retail seller's
written warranty. The warranty shall include the following
language:
"This assistive device is warranted to be specifically fit for the
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particular needs of you the buyer. If the device is not
specifically fit for your particular needs, it may be returned to
the seller within 30 days of the date of actual receipt by you or
completion of fitting by the seller, whichever occurs later. If
you return the device, the seller will either adjust or replace the
device or promptly refund the total amount paid. This warranty
does not affect the protections and remedies you have under other
laws.' In lieu of the words "30 days," the retail seller may
specify any longer period."
3. Comparison With Other States. In other
states, provisions regarding refunds and returns of
hearing aids are mandated by legislation.
Florida (Florida Statutes § 468.1246)
a) The seller must provide the buyer with written notice of a
30-day trial period and money-back guarantee. The guarantee
must permit the purchaser to cancel the purchase for a valid
reason as defined by the Board within 30 days after receiving
the hearing aid, by returning the hearing aid or mailing written
notice of cancellation to the seller. If the hearing aid must
be repaired, remade, or adjusted during the 30-day trial period,
the running of the 30-day trial period is suspended 1 day for
each 24-hour period that the hearing aid is not in the
purchaser's possession. A repaired, remade, or adjusted hearing
aid must be claimed by the purchaser within 3 working days after
notification of availability. The running of the 30-day trial
period resumes on the day the purchaser reclaims the repaired,
remade, or adjusted hearing aid or on the fourth day after
notification of availability.
b) The licensee may retain charges for ear molds, services
provided, and a cancellation fee as prescribed by the Board. If
a rule regarding the above is not set forth by the Board, a
licensee may not charge a cancellation fee which exceeds 5
percent of the total amount available for refund, and this shall
be provided in writing to the purchaser prior to signing the
contract.
c) The seller must provide the refund within 30 days.
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Texas (Texas Administrative Code Title 22, Part 7, Rule §141.16)
a) The buyer must be informed of a 30-day trial period by
written contract including all charges associated with such
trial period.
b) The buyer shall be entitled to a refund of the purchase
price less the agreed-upon amount upon return of the hearing
aid(s) in good condition within the 30-day trial period ending
30 days from the date of delivery. Should the order be
cancelled prior to delivery, the licensee may retain the
agreed-upon charges and fees. Refund is due by the 30th day
after the date the buyer cancels or returns the hearing aid(s).
c) If the hearing aid(s) must be repaired, remade, or adjusted
during the 30-day trial period, the 30-day trial period is
suspended for one day for each 24-hour period that the aid(s)
are not in the buyer's possession. The 30-day trial period
resumes on the day the buyer reclaims the repaired, remade, or
adjusted aid(s) or within five working days of notification.
Oregon (Oregon Revised Statutes § 694.042)
a) In addition to any other rights and remedies the purchaser
may have, the purchaser shall have the right to rescind the
transaction if:
i. The purchaser consults with a physician or
audiologist subsequent to purchasing the hearing aid,
and the licensed physician advises the purchaser
against purchasing or using a hearing aid and in
writing specifies the medical reason.
ii. The seller fails to adhere to the practice
standards provided in the law, or fails to provide the
statement required in the law.
iii. The fitting of the hearing aid failed to
meet current industry standards.
iv. The licensee fails to meet any standard of
conduct prescribed in the law or rules regulating
fitting and dispensing of hearing aids and this failure
affects in any way the transaction which the purchaser
seeks to rescind.
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b) The purchaser of a hearing aid shall have the right to
rescind the transaction, for other than the seller's breach, if
the purchaser returns the product in good condition less normal
wear and tear and gives written notice of the intent to rescind
the transaction by written notice of the intent to rescind sent
by certified mail, return receipt, to the licensee's regular
place of business or returning the product with written notice
of intent to rescind to an authorized representative of the
company from which it was purchased.
c) The notice described above shall state that the transaction
is cancelled pursuant to this section and must be postmarked
within 30 days of the original delivery or within specified time
periods if the 30-day period has been extended in writing by
both parties. The consumer's rescission rights can only be
extended through a written agreement by both parties.
d) If conditions stated above have been met, the seller shall
issue a refund within 10 days after the cancellation. The
licensee may retain a portion of the purchase price as specified
by rule of the Oregon Health Licensing Agency when the sale is
rescinded during the 30-day rescission period. The seller shall
return all goods traded in and the purchaser shall incur no
additional liability for the cancellation.
Illinois (225 Illinois Compiled Statutes § 50)
a) All hearing instruments offered for sale must be
accompanied by a 30-business-day return privilege.
i. At the time of delivery, the licensee must furnish
to the buyer a fully completed receipt or copy of the
contract that contains a statement informing the buyer that
he/she may return the hearing instrument for a refund
within 30 business days and the day by which the refund
period extends in bold 10 point type.
ii. If a nonrefundable fee will be withheld from the
buyer in the event of return, the dollar amount must be
clearly stated in 10-point bold type on the face of the
receipt or contract.
iii. If during the 30-business-day refund period the
hearing instrument and/or accessories are returned for
adjustment or repair, the refund period will be
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extended, affording the buyer the remainder of the refund
period. The extension
shall be provided to the buyer in writing.
1. Attorney General Legal Opinion. According to the Office of the
Attorney General legal opinion No. 97-1208, "The seller may NOT
retain any portion of the total amount paid on the basis that such
part payment was for fitting the device or other ancillary service
or for one or more of the component parts that the seller refuses
to take back." This means that under current law, the hearing aid
dispenser may not retain any fees or other charges in connection
with the purchase, fitting, financing, or return of the device and
no fee should be listed as "non-refundable" on the purchase
agreement. This includes any cancellation fees.
2. Arguments in Support: The California Speech-Language Pathology
and Audiology Board and Hearing Aid Dispensers Board (Board)
indicates that promulgating more specific regulations to address
the return and refund provisions for the purchase of hearing aids
will more effectively protect consumers from financial hardship by
enhancing the Board's authority to take actions against hearing aid
dispensers who employ inappropriate or possibly unethical business
practices.
According to the Board, approximately 40-50% of complaints received
each year are related to issues surrounding disputes over the
refund of monies paid for hearing aids. The Board notes that the
Song Beverly Consumer Warranty Act provisions are vague and open to
interpretation. This makes gathering substantiating evidence and
interviewing witnesses difficult. Often the complainants are
seniors who do not have documentation to submit to the Board and
have spent large sums of money on their hearing aids. The Board
indicates that most hearing aids cost more than $2000.00 per aid.
The Board indicates that due to the difficulty of substantiating
the allegations of fraud or unprofessional conduct many
complainants are only left with the option of pursuing resolution
through Small Claims Court or hiring a private attorney.
3. Policy Issue : Should the Regulatory Authority Granted to the
Board be More Clearly Defined? Committee Staff suggests that the
Author amend the bill language to indicate the specific authority
that the Board desires in crafting regulations in regards to
warranty provisions for assistive devices. In its current form,
the bill would allow the Board to have very broad authority to
craft regulations that would pertain to warranties for all
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assistive devices. Committee staff believes that this authority
should be narrowed and more clearly defined to include only the
authority necessary to promulgate regulations regarding the selling
and buying of hearing aids. These amendments could be made in
Senate Judiciary Committee since there are other concerns to be
addressed within that Committee.
Staff also notes that the Attorney General legal opinion 97-1208
has dealt with his issue, and suggests that, should the Board be
granted the ability to craft regulations regarding warranty
provisions, the Board should take into consideration the Attorney
General's opinion as it relates to the rights of a seller to retain
payment.
NOTE : Double-referral to Judiciary Committee second.
SUPPORT AND OPPOSITION:
Support:
The California Speech-Language Pathology and Audiology
and Hearing Aid Dispensers Board
Opposition:
None on file as of April 11, 2012
Consultant: Le Ondra Clark