BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
SB 1444 (Anderson)
As Amended April 23, 2012
Hearing Date: May 1, 2012
Fiscal: No
Urgency: No
TW
SUBJECT
Assistive Devices: Warranty
DESCRIPTION
Existing law, the Song-Beverly Consumer Warranty Act
(Song-Beverly), provides warranty requirements for the sale of
new and used assistive devices, which include hearing aids.
This bill would provide separate warranty requirements for
hearing aids.
BACKGROUND
In 1979, the Song-Beverly Consumer Warranty Act (Song-Beverly)
established warranty provisions for assistive devices, including
hearing aids. At that time, hearing aids were analog and
amplified all sounds equally, and a completed fitting of the
hearing aid primarily involved turning the hearing aid sound up
or down.
Since 1979, analog hearing aids have been slowly phased out in
favor of digital hearing aids, which utilize computer chips to
convert incoming sounds into a digital code. The computer chips
are adjusted based on each individual's hearing loss and
listening needs. As such, a successful fitting of digital
hearing aids may take a year or more, and each fitting may
require a consumer to return the digital hearing aids to the
provider for additional adjustments.
Under Song-Beverly, hearing aid purchasers have 30 days from
actual receipt by the purchaser or completion of fitting by the
seller, whichever occurs later, to return the hearing aid for a
(more)
SB 1444 (Anderson)
Page 2 of ?
replacement or for a full refund. (Civ. Code Sec. 1793.02(a).)
With the advent of digital hearing aids and extended time frames
for fittings, and because Song-Beverly qualifies that the
warranty begins at the time of completion of fitting or actual
possession of the hearing aid by the buyer, whichever is later,
hearing aid consumers and providers have become uncertain as to
when the warranty begins. Further, consumers may or may not
recall or have documentation to support the purchase or return
dates over the course of the fitting process.
This bill, sponsored by the Hearing Healthcare Providers of
California, would revise the warranty provisions for hearing
aids under Song-Beverly. This bill was heard by the Senate
Business Professions and Economic Development Committee on April
16, 2012 and passed out on a vote of 9-0.
CHANGES TO EXISTING LAW
1. Existing law , the Song-Beverly Consumer Warranty Act
(Song-Beverly) provides implied warranties and remedies
relating to new and used assistive devices. (Civ. Code Secs.
1793, 1793.02.)
Existing law requires all new and used assistive devices sold
in California to contain the retail seller's written warranty,
in at least 10-point bold type and delivered to the buyer at
the time of sale, as follows:
the assistive device is warranted to be specifically fit
for the particular needs of the buyer;
the device may be returned to the seller within 30 days,
or a longer period if specified by the seller, of the date
of actual receipt by the buyer or completion of fitting by
the seller, whichever occurs later, if the device is not
specifically fit for the buyer's particular needs; and
the seller must either adjust or replace the device or
promptly refund the total amount paid by the buyer if the
buyer returns the device to the seller. (Civ. Code Sec.
1793.02(a), (b).)
Existing law provides that if the buyer returns the assistive
device within the written warranty period, the seller shall,
without charge and within a reasonable time, adjust the device
or replace it with a device that is specifically fit for the
particular needs of the buyer. (Civ. Code Sec. 1793.02(c).)
Existing law provides that if the seller does not adjust or
replace the device so that it is specifically fit for the
SB 1444 (Anderson)
Page 3 of ?
particular needs of the buyer, the seller must promptly refund
to the buyer the total amount paid for the assistive device
and any other consideration exchanged as part of the
transaction, and the sale is rescinded. (Id.)
Existing law provides that if a sale of assistive devices is
rescinded, the seller may not charge, penalize, or impose any
other fee on the buyer in connection with the purchase,
fitting, financing, or return of the device. (Id.)
This bill would provide a new hearing aid warranty under
Song-Beverly, which would provide that the hearing aid may be
returned to the seller within 30 days from the date the buyer
is fitted with the hearing aid and takes possession of it.
2. Existing law provides that a warranty period is tolled for the
period from the date upon which the buyer either delivers
nonconforming goods to the seller for warranty repairs or
service or notifies the seller of the nonconformity of the
goods until the date upon which the repaired or serviced goods
are delivered to the buyer, the buyer is notified the goods
are repaired or serviced and are available, or the buyer is
notified that repairs or service is completed, if repairs or
service is made at the buyer's residence. (Civ. Code Sec.
1795.6(a).)
Existing law provides that the warranty period shall not be
deemed expired if either or both of the following situations
occur:
(1) the warranty repairs or service has not been performed due
to delays caused by circumstances beyond the control of the
buyer; or
(2) the warranty repairs or service performed upon the
nonconforming goods did not remedy the nonconformity for which
such repairs or service was performed and the buyer notified
the manufacturer or seller of this failure within 60 days
after the repairs or service was completed. (Civ. Code Sec.
1795.6(b).)
Existing law requires the seller to provide to the buyer a
receipt showing the date of purchase.
Existing law provides that, if the seller performed warranty
repairs or service, the seller must provide to the buyer a
work order or receipt with the date of return and either the
date the buyer was notified that the goods were repaired or
SB 1444 (Anderson)
Page 4 of ?
serviced or, where applicable, the date the goods were shipped
or delivered to the buyer. (Civ. Code Sec. 1795.6(d).)
This bill would provide that, in addition to the above tolling
provisions, if a hearing aid must be repaired, remade, or
adjusted during the warranty period, the warranty is suspended
for one day for each 24-hour period that the hearing aid is
not in the buyer's possession. The warranty period would
resume on the day the buyer reclaims the repaired, remade or
adjusted hearing or five working days after notification of
availability, whichever is earlier.
COMMENT
1. Stated need for the bill
The author writes:
Currently, the lack of clarity of the Song Beverly Act as
applied to warranty provisions for hearing aids is detrimental
to both the consumer and the provider 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 Song Beverly Act includes the
term, "completion of fitting," which has been interpreted
several ways and as such, places the burden on the provider to
determine when the 30-day warranty period starts. . . . In
addition, the Song Beverly Act does not adequately address
periods of time when the hearing aid device may require
adjustment or repair and is not in the possession of the
consumer at some point within the first 30-days.
The Speech-Language Pathology and Audiology and Hearing Aid
Dispensers Board (Board) argues in support of this bill as
follows:
In researching complaint activity surrounding return and
refund issues related to the sale of hearing aids, the Board
has found that roughly 40-50% of complaints received by the
Board each year are related to issues surrounding disputes
over the refund of monies paid for hearing aids.
Historically, these complaints (mostly levied by seniors) have
plagued the Board (as well as the former "Bureau") as
determining the facts in such cases is extremely difficult.
SB 1444 (Anderson)
Page 5 of ?
The İSong Beverly Consumer Warranty Act] SBCWA provisions are
vague and, therefore, open to interpretation which makes
gathering substantiating evidence and interviewing witnesses
difficult. Often the complainants (seniors) do not have
documentation to submit to the Board and have spent large sums
of money, (most hearing aids cost $2,000 or more, per aid).
Procuring evidentiary documentation from the hearing aid
dispenser is at timeİs] impossible since the provisions of the
SBCWA do not specify that the purchase agreement must contain
all pertinent dates and information, such as, dates of repair
or adjustment and dates when the hearing aid was not in the
possession of the purchaser, to name a few. This information
is vital in order for the Board to adequately review the facts
of the case and determine whether a violation of law occurred.
Since it has proven difficult to substantiate the allegations
of fraud or unprofessional conduct, many complainants are
forced to pursue resolution through Small Claims Court or a
private legal action. Seeking private legal recourse can be
daunting for anyone, especially seniors.
2. Recent amendments
Prior to the most recent amendments, this bill would have
authorized the Board to adopt regulations that define the
express terms that must be provided in a purchase agreement for
a hearing aid. This provision would have given the Board broad
authority to alter the warranty provisions under the
Song-Beverly Consumer Warranty Act (Song-Beverly). The Board
provided to Committee staff the following regulations that the
Board, if given statutory authority, is considering adopting:
Pursuant to the provisions of Civil Code Section 1793.02 et
seq., The Song Beverly Consumer Warranty Act, and Business and
Professions Code Section 3365 (f), the following express
warranty provisions shall apply to hearing aid devices:
a) A consumer shall be entitled to a refund of the cost of
a hearing aid device, less an amount not to exceed $200 per
hearing aid, of which the provider shall be permitted to
retain, should the contract be cancelled prior to the
consumer taking possession of the hearing aid, or the
device be returned to the hearing aid dispenser for a
refund within thirty (30) days from the date the consumer
acquired the device from the hearing aid dispenser. The
refund should be received by the consumer within thirty
(30) days from the date of return of the hearing aid to the
SB 1444 (Anderson)
Page 6 of ?
provider.
b) The above "right of return" provision shall be "tolled"
in the event that the hearing aid device is returned by the
consumer to the hearing aid dispenser for service. The
time period the hearing aid device is in the possession of
the hearing aid dispenser, shall be excluded from the
thirty (30) day right of return period.
c) Any period of time that the hearing aid dispenser is in
possession of a device that has been serviced or adjusted
and fails to notify the consumer the device is available
for retrieval, or fails to make the device available to the
consumer for retrieval, shall be deemed "tolled" and shall
be excluded from the right of return period.
d) Should the consumer fail to retrieve the hearing aid
device from the hearing aid dispenser within seven (7)
business days of being notified by telephone and by mail
that the device has been repaired or adjusted, the right of
return period shall commence.
e) The hearing aid dispenser shall provide the consumer
with a written purchase agreement signed by both the
hearing aid dispenser and the consumer that contains the
following: the specified date(s) the device was initially
delivered to the consumer, the date(s) the device was
returned to the hearing aid dispenser for service or
adjustment, and the date(s) the device was retrieved by the
consumer.
A brief review of these proposed regulations revealed potential
conflicts with the statutory consumer protections contained in
Song-Beverly. Provision (a) above effectively would authorize a
hearing aid provider to keep a $200 non-refundable deposit.
This deposit would be contrary to Song-Beverly's consumer
protections, which provide that, if the seller does not adjust
or replace the device so that it is specifically fit for the
particular needs of the buyer, the seller must promptly refund
to the buyer the total amount paid for the hearing aid and any
other consideration exchanged as part of the transaction, and
the sale is rescinded. (Civ. Code Sec. 1793.02(c).) Since
existing statutory law requires a full refund to the consumer,
with no deposit going to the seller, the regulation proposed by
the Board would run afoul of statutory law and would be void and
unenforceable.
Provision (a) above also would allow a hearing aid seller 30
days from the return of the hearing aid to refund the buyer's
money. Existing law provides that the seller shall promptly
SB 1444 (Anderson)
Page 7 of ?
refund the total amount paid. (Civ. Code Sec. 1793.02(c).)
Accordingly, provision (a) would make it more difficult for
consumers to "promptly" receive their money back and would tie
up money owed to them for 30 days.
To avoid these and other potential conflicts between proposed
regulations by the Board and Song-Beverly, Committee staff
worked with the author to provide statutory revisions to
Song-Beverly to specifically address the consumer and provider
protections at issue and delete the provisions giving the Board
authority to adopt regulations in this area. However, the
current version of the bill suffers additional problems as
discussed in more detail below.
3. Revising the warranty provisions for hearing aids
Song-Beverly provides that assistive devices, including hearing
aids, are warrantied to be specifically fit for the particular
needs of the buyer. (Civ. Code Sec. 1793.02(a).) Existing law
provides that an assistive device may be returned to the seller
within 30 days, or longer if specified by the seller, of the
date of actual receipt by the buyer or completion of fitting by
the seller, whichever occurs later. (Civ. Code Sec.
1793.02(b).) This bill would exclude hearing aids from these
provisions and instead provide that hearing aids may be returned
to the seller within 30 days from the date the buyer is fitted
with the hearing aid and takes possession of it.
The author argues that ambiguity exists as to when a hearing aid
has been specifically fitted for the particular needs of the
buyer. Hearing aids that are molded to fit the particular
buyer's ears may take up to a year to completely fit the
particular needs of the buyer. Accordingly, "completion of
fitting," has been interpreted different ways by the hearing aid
seller and buyer. The hearing aid seller has to determine,
based on the unique and circumstantial definition of "completion
of fitting," when the 30-day warranty period starts and stops.
The buyer also has to argue the definition of completion of
fitting, and has to maintain accurate records as to when the
hearing aids were purchased, picked up, and potentially returned
for adjustments over the course of the fitting to validate their
claim in the event the seller refuses to refund the purchase
price and services associated with the hearing aid.
Instead of qualifying the warranty on a "completion of fitting"
standard provided under existing law, this bill was amended to
SB 1444 (Anderson)
Page 8 of ?
instead provide that the warranty would begin on the date the
buyer is fitted with the hearing aid and takes possession of it.
However, this provision is also vague and ambiguous for the
same reason "completion of fitting" is vague and ambiguous: it
is predicated on the buyer's particular belief as to whether the
hearing aid is properly fitted. As such, hearing aid sellers do
not have clear guidance as to when the warranty would begin. To
effectively address the issue at hand that the warranty start
date should be better clarified, this Committee should consider
amending this bill to provide that the warranty start period
begin on the date of delivery to the buyer.
It is important to note that removing the "completion of
fitting" condition from the warranty start date should not
remove the implied warranty of fitness for a particular purpose
provided in existing law. This provision is not included in the
current version of this bill. Hearing aids, by nature of their
use to address each individual's hearing loss, require more than
a general warranty of merchantability or ordinary purpose.
Existing case law, American Suzuki Motor Corp. v. Superior Court
(1995) 37 Cal.App.4th 1291, reasoned that the applicability of
an implied warranty of fitness for a particular purpose is
appropriate in certain circumstances. The Court of Appeal held:
İA]n implied warranty of fitness for a particular purpose
exists where the seller at the time of contracting has reason
to know (a) any particular purpose for which goods are
required, and (b) that the buyer is relying on the seller's
skill or judgment to select or to furnish suitable goods for
such purpose. "A 'particular purpose' differs from the
ordinary purpose for which the goods are used in that it
envisages a specific use by the buyer which is peculiar to the
nature of his business whereas the ordinary purposes for which
goods are used are those envisaged in the concept of
merchantability and go to uses which are customarily made of
the goods in question." . . .
The Song-Beverly Act incorporates the provisions of
İCalifornia Uniform Commercial Code] sections 2314 and 2315.
It "supplements, rather than supersedes, the provisions of the
California Uniform Commercial Code" by broadening a consumer's
remedies to include costs, attorney's fees, and civil
penalties. (Id. at 1295; internal citations omitted.)
In most circumstances, the consumer consults an audiologist, who
tests the individual for hearing loss problems. The consumer
SB 1444 (Anderson)
Page 9 of ?
then relies on the audiologist's skill or judgment to select the
appropriate hearing aid for the consumer's hearing needs.
Hearing aids are then "fit" for the particular needs of the
individual. Consumer groups, opposed to this bill unless it is
amended, argue that Song-Beverly encompasses this transaction by
providing consumer protection with a warranty of fit for a
particular purpose. Accordingly, this bill should be amended to
maintain the existing consumer protection under Song-Beverly
that a seller is warranting that the hearing aid is specifically
fit for the particular needs of the buyer.
In order to provide the buyer with clear notice of the warranty
provisions and more time to discover potential faults with the
hearing aids, the Committee should consider amending this bill
to increase the warranty period from 30 days to 45 days and
require the hearing aid seller to provide in the written
warranty the dates of delivery of the hearing aid to the buyer
and the warranty expiration date. This bill should also be
amended to move the proposed language to the proper placement
within the warranty section.
Suggested amendments :
1. On page 2, at line 3, after (a) insert "(1) Except as
provided under subdivision (2),"
2. On page 2, at lines 3 and 4, delete ", with the
exception of hearing aids,"
3. On page 2, between lines 15 and 16, insert:
(2) (A) All new and used hearing aids sold in this state
shall be accompanied by the retail seller's written
warranty, which shall appear on the first page of the
warranty in at least 10-point bold type, delivered to the
buyer at the time of the sale of the device, and shall
contain the following language: "This assistive device is
warranted to be specifically fit for the 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 45 days of the date of delivery to you. 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."
(B) In lieu of the words "45 days" the retail seller may
specify any longer period.
(C) The seller's written warranty shall include the dates
of delivery of the device and expiration of the warranty.
SB 1444 (Anderson)
Page 10 of ?
4. On page 3, at line 27, replace "subdivisions" with
"subdivision" and delete "and (i)"
5. On page 3, delete lines 30-39, and on page 4, delete
lines 1-26.
3. Warranty tolling provisions during hearing aid adjustment,
remake, or replacement
Song-Beverly provides that if a hearing aid seller does not
adjust or replace the device so that it is specifically fit for
the particular needs of the buyer, the seller must promptly
refund to the buyer the total amount paid for the assistive
device and any other consideration exchanged as part of the
transaction, and the sale is rescinded. (Civ. Code Sec.
7093.02(c).) Further, existing law provides that a warranty
period is tolled if the buyer has returned the device to the
seller for repair or service, as specified, and the warranty
period resumes when the repair or serviced good is returned to
the buyer or when the buyer is notified that the goods are
repaired or serviced and are available for the buyer to pick up.
(Id.). (Civ. Code Sec. 1795.6.) This bill would provide
additional tolling provisions for hearing aids.
The author argues that Song-Beverly does not adequately address
periods of time during the warranty period when the hearing aid
device may require adjustment or repair and is not in the
possession of the consumer. Unlike other digital consumer
devices, such as cameras and computers, digital hearing aids are
adjusted based on each individual's hearing loss and listening
needs. Further, some hearing aids are modeled to conform to the
buyer's ear shape. As such, the buyer may not be aware of any
particular sound or shape issue with the hearing aid until after
the buyer has picked up the hearing aid and worn it for a few
days.
The author notes that other states, such as Florida (Fla. Stat.
468.1246) and Texas (22 TAC Sec. 141.16), provide that the
hearing aid warranty is tolled when the hearing aid is returned
by the buyer for repair, remake, or adjustment, and the running
of the warranty period is suspended for one day for each 24-hour
period that the hearing aid is not in the buyer's possession.
Texas also provides that the warranty period resumes on the day
the buyer reclaims the repaired, remade, or adjusted hearing aid
or within five working days of notification of availability.
Using this framework, this bill was amended to provide consumers
SB 1444 (Anderson)
Page 11 of ?
a more clearly defined tolling period whereby the warranty would
resume on the day the buyer reclaims the hearing aid or five
working days after the buyer is notified the hearing aid has
been repaired or serviced and are available to be reclaimed,
whichever date is earlier. For better clarity, this tolling
provision should be moved and included under the Song-Beverly
tolling provisions. The Committee should also consider amending
this bill to require the seller to provide the buyer with a
written notice of the tolling period. Such notice should
include the date of return of the hearing aid to the seller for
adjustment, remake, or repair, the date the buyer was notified
of the hearing aid availability or the date the hearing aid was
delivered to the buyer, the date the warranty period resumes,
and the revised expiration date of the warranty, adjusted to
reflect the tolling period.
Suggested amendments :
1. On page 4, at line 27, insert Section 2, which will
include the entire provisions of Section 1795.6 of the
Civil Code.
2. Amend Civil Code Section 1795.6 as follows: After
"1795.6" insert "(a)(1) Except as provided in subparagraph
(2),"
3. Before paragraph (b), insert "(2) With respect to
hearing aids, the warranty period shall resume on the date
upon which (1) the repaired or serviced goods are delivered
to the buyer, or (2) five business days after the buyer is
notified the goods are repaired or serviced and are
available for the buyer's possession, whichever is
earlier."
4. In paragraph (d), after "(d)" insert "(1) Except as
provided in subdivision (2),"
5. After paragraph (d), insert "(2) With respect to hearing
aids, the seller performing warranty repairs or service on
the goods shall also provide to the buyer a work order or
receipt with the following: (1) the date the warranty
period resumes; and (2) the revised expiration date of the
warranty, as adjusted to reflect the suspension of the
warranty period provided under this section."
Support : California Speech-Language Pathology and Audiology and
Hearing Aid Dispensers Board
Opposition : Consumer Attorneys of California; Consumer
SB 1444 (Anderson)
Page 12 of ?
Federation of California
HISTORY
Source : Hearing Healthcare Providers of California
Related Pending Legislation : None Known
Prior Legislation :
SB 648 (Battin, 2003), under the Assistive Devices Warranty Law,
would have allowed a hearing aid seller to charge a nominal
adjustment fee at the discretion of the seller. This bill was
referred to this committee but returned to the Secretary of the
Senate pursuant to Joint Rule 56.
AB 1889 (Seastrand, Ch. 228, Stats. 1991), among other things,
exempted hearing aids sold by catalog from the list of assistive
devices excluded, as specified, from the Assistive Devices
Warranty Law.
Prior Vote : Senate Committee on Business, Professions &
Economic Development (Ayes 9, Noes 0)
**************