BILL ANALYSIS Ó
AB 1097
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CONCURRENCE IN SENATE AMENDMENTS
AB
1097 (Holden)
As Amended September 4, 2015
Majority vote
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|ASSEMBLY: |78-0 |(May 14, 2015) |SENATE: |40-0 |(September 9, |
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Original Committee Reference: B. & P.
SUMMARY: Authorizes contracts for services or other activities
authorized by the Alarm Company Act relating to installation
agreements to be conducted by electronic means only after
receiving consent from the consumer.
The Senate amendments:
1)Specify that only contracts for services or other activities
authorized by the Alarm Company Act relating to installation
agreements for alarm systems may be conducted by electronic
means.
2)Require a licensee to provide an identical paper copy of the
signed electronic contract for services upon request of the
contracting consumer.
AB 1097
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3)Add double jointing language to address chaptering out issues
with AB 1131 (Dababneh) of the current legislative session.
4)Make other technical and conforming amendments.
FISCAL EFFECT: None. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS:
Purpose. This bill is sponsored by ADT Security Services.
According to the author, "Although most businesses and
individuals selling alarm systems are legitimate, some use
deceptive tactics as a core component of their sales practices
and often target the elderly, coercing them into signing various
contracts with different companies. With paper contracts, it is
virtually impossible to know who signed a contract, when they
signed, and whether or not copies of the contract and notice of
cancellation were actually delivered. With e-contracts,
however, it is possible to see when the actual customer logged
into the e-contract system, reviewed and signed the contract,
and exactly when and whether the contract and notices were
electronically delivered to the customer.
"Since 1999, technology has advanced to such a degree that
electronic contracts can now offer consumer protection measures
that exceed those of traditional paper contracts. Therefore, at
the discretion of the customer, AB 1097 would allow alarm
companies in the state to fully utilize electronic contracts.
These improvements will benefit California consumers, the
environment and the state agencies tasked with enforcing
consumer protection laws."
Background. In 1999, California adopted the Uniform Electronic
AB 1097
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Transactions Act (UETA) UETA, which gave electronic contracts
(e-contracts) and signatures the same legal standing as
traditional paper contracts. In an effort to further protect
consumers, the state excluded in-home sales from the UETA, which
means that in-home sales vendors were required to continue
leaving a paper copy of the contract and two copies of the
notice of three-day right of rescission with the consumer at the
time of sale.
With the advancement in technology, traditional paper contracts
are nearly obsolete. E-contracts which offer added consumer
protection properties are a viable solution to replace paper
contracts. E-contracts are reproducible, and metadata showing
when the contract and other documents were signed, emailed, and
even opened, can be subpoenaed, whereas paper contracts are
easily misplaced and can be damaged over time. In addition,
many in-home vendors use tablet devices to help assess customer
needs and discuss contract terms. The author asserts that using
such tablets to contract with customers would reduce
environmental impact and preserve an electronic copy of the
document for future reference, which could be emailed to
customers for their own files, thereby providing greater
transparency into the contracting process.
Analysis Prepared by:
Eunie Linden / B. & P. / (916) 319-3301 FN:
0002294