BILL ANALYSIS Ó AB 1097 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1097 (Holden) As Amended September 4, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |78-0 |(May 14, 2015) |SENATE: |40-0 |(September 9, | | | | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- 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 Page 2 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 Page 3 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