SB 386, as introduced, Allen. Consumer affairs.
Existing law, the Consumer Legal Remedies Act, makes unlawful certain unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer, including, among other things, advertising or promoting any event, presentation, seminar, workshop, or other public gathering regarding veterans’ benefits or entitlements that does not include a specified statement. Existing law authorizes any consumer who suffers damages as a result of the use or employment by any person of a method, act, or practice declared to be unlawful, as described above, to bring an action against that person to recover or obtain damages, restitution, an order enjoining the methods, acts, or practice, or any other relief the court deems proper.
This bill would include as an unlawful practice prohibited under the act for sale of a financial product or service that is illegal under state or federal law, including a cash payment for the assignment to a third party of the consumer’s right to receive future pension or veteran’s benefits.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1770 of the Civil Code is amended to
(a) The following unfair methods of competition and
4unfair or deceptive acts or practices undertaken by any person in
5a transaction intended to result or which results in the sale or lease
6of goods or services to any consumer are unlawful:
7(1) Passing off goods or services as those of another.
8(2) Misrepresenting the source, sponsorship, approval, or
9certification of goods or services.
10(3) Misrepresenting the affiliation, connection, or association
11with, or certification by, another.
12(4) Using deceptive representations or designations of
13geographic origin in connection with goods or services.
14(5) Representing that goods or services have sponsorship,
15approval, characteristics, ingredients, uses, benefits, or quantities
16which they do not have or that a person has a sponsorship,
17approval, status, affiliation, or connection which he or she does
19(6) Representing that goods are original or new if they have
20deteriorated unreasonably or are altered, reconditioned, reclaimed,
21used, or secondhand.
22(7) Representing that goods or services are of a particular
23standard, quality, or grade, or that goods are of a particular style
24or model, if they are of another.
25(8) Disparaging the goods, services, or business of another by
26false or misleading representation of fact.
27(9) Advertising goods or services with intent not to sell them
29(10) Advertising goods or services with intent not to supply
30reasonably expectable demand, unless the advertisement discloses
31a limitation of quantity.
32(11) Advertising furniture without clearly indicating that it is
33unassembled if that is the case.
34(12) Advertising the price of unassembled furniture without
35clearly indicating the assembled price of that furniture if the same
36furniture is available assembled from the seller.
37(13) Making false or misleading statements of fact concerning
38reasons for, existence of, or amounts of price reductions.
P3 1(14) Representing that a transaction confers or involves
2remedies, or obligations which it does not have or involve, or
3which are prohibited by law.
4(15) Representing that a part, replacement, or repair service is
5needed when it is not.
6(16) Representing that the subject of a transaction has been
7supplied in accordance with a previous representation when it has
9(17) Representing that the consumer will receive a rebate,
10discount, or other economic benefit, if the earning of the benefit
11is contingent on an event to occur subsequent to the consummation
12of the transaction.
13(18) Misrepresenting the authority of a salesperson,
14representative, or agent to negotiate the final terms of a transaction
15with a consumer.
16(19) Inserting an unconscionable provision in the contract.
17(20) Advertising that a product is being offered at a specific
18price plus a specific percentage of that price unless (A) the total
19price is set forth in the advertisement, which may include, but is
20not limited to, shelf tags, displays, and media advertising, in a size
21larger than any other price in that advertisement, and (B) the
22specific price plus a specific percentage of that price represents a
23markup from the seller’s costs or from the wholesale price of the
24product. This subdivision shall not apply to in-store advertising
25by businesses which are open only to members or cooperative
26organizations organized pursuant to Division 3 (commencing with
27Section 12000) of Title 1 of the Corporations Code where more
28than 50 percent of purchases are made at the specific price set forth
29in the advertisement.
30(21) Selling or leasing goods in
violation of Chapter 4
31(commencing with Section 1797.8) of Title 1.7.
32(22) (A) Disseminating an unsolicited prerecorded message by
33telephone without an unrecorded, natural voice first informing the
34person answering the telephone of the name of the caller or the
35organization being represented, and either the address or the
36telephone number of the caller, and without obtaining the consent
37of that person to listen to the prerecorded message.
38(B) This subdivision does not apply to a message disseminated
39to a business associate, customer, or other person having an
40established relationship with the person or organization making
P4 1the call, to a call for the purpose of collecting an existing
2obligation, or to any call generated at the request of the recipient.
3(23) The home solicitation, as defined in
subdivision (h) of
4Section 1761, of a consumer who is a senior citizen where a loan
5is made encumbering the primary residence of that consumer for
6the purposes of paying for home improvements and where the
7transaction is part of a pattern or practice in violation of either
8subsection (h) or (i) of Section 1639 of Title 15 of the United States
begin delete paragraph (e) of Section 226.32end delete of Title 12 of the Code of
12A third party shall not be liable under this subdivision unless
13(A) there was an agency relationship between the party who
14engaged in home solicitation and the third party or (B) the third
15party had actual knowledge of, or participated in, the unfair or
16deceptive transaction. A third party who is a holder in due course
17under a home solicitation transaction shall not be liable under this
19(24) (A) Charging or receiving an unreasonable fee to prepare,
20aid, or advise any prospective applicant, applicant, or recipient in
21the procurement, maintenance, or securing of public social services.
22(B) For purposes of this paragraph, the following definitions
24(i) “Public social services” means those activities and functions
25of state and local government administered or supervised by the
26State Department of Health Care Services, the State Department
27of Public Health, or the State Department of Social Services, and
28involved in providing aid or services, or both, including health
29care services, and medical assistance, to those persons who,
30because of their economic circumstances or social condition, are
31in need of that aid or those services and may benefit from them.
32(ii) “Public social services” also includes activities and functions
33administered or supervised by the United States Department of
34Veterans Affairs or the California Department of Veterans Affairs
35involved in providing aid or services, or both, to veterans, including
37(iii) “Unreasonable fee” means a fee that is exorbitant and
38disproportionate to the services performed. Factors to be
39considered, when appropriate, in determining the reasonableness
P5 1of a fee, are based on the circumstances existing at the time of the
2service and shall include, but not be limited to, all of the following:
3(I) The time and effort required.
4(II) The novelty and difficulty of the services.
5(III) The skill required to perform the services.
6(IV) The nature and length of the professional relationship.
7(V) The experience, reputation, and ability of the person
8providing the services.
9(C) This paragraph shall not apply to attorneys licensed to
10practice law in California, who are subject to the California Rules
11of Professional Conduct and to the mandatory fee arbitration
12provisions of Article 13 (commencing with Section 6200) of
13Chapter 4 of Division 3 of the Business and Professions Code,
14when the fees charged or received are for providing representation
15in administrative agency appeal proceedings or court proceedings
16for purposes of procuring, maintaining, or securing public social
17services on behalf of a person or group of persons.
18(25) (A) Advertising or promoting any event, presentation,
19seminar, workshop, or other public gathering regarding veterans’
20benefits or entitlements that does not include the following
21statement in the same type size and font as the term “veteran” or
22any variation of that term:
23(i) “I am not authorized to file an initial application for Veterans’
24Aid and Attendance benefits on your behalf, or to represent you
25before the Board of Veterans’ Appeals within the United States
26Department of Veterans Affairs in any proceeding on any matter,
27including an application for such benefits. It would be illegal for
28me to accept a fee for preparing that application on your behalf.”
29The requirements of this clause do not apply to a person licensed
30to act as an agent or attorney in proceedings before the Agency of
31Original Jurisdiction and the Board of Veterans’ Appeals within
32the United States Department of Veterans Affairs when that person
33is offering those services at the advertised event.
34(ii) The statement in clause (i) shall also be disseminated, both
35orally and in writing, at the beginning of any event, presentation,
36seminar, workshop, or public gathering regarding veterans’ benefits
38(B) Advertising or promoting any event, presentation, seminar,
39workshop, or other public gathering regarding veterans’ benefits
40or entitlements which is not sponsored by, or affiliated with, the
P6 1United States Department of Veterans Affairs, the California
2Department of Veterans Affairs, or any other congressionally
3chartered or recognized organization of honorably discharged
4members of the Armed Forces of the United States, or any of their
5auxiliaries that does not include the following statement, in the
6same type size and font as the term “veteran” or the variation of
9“This event is not sponsored by, or affiliated with, the United
10States Department of Veterans Affairs, the California Department
11of Veterans Affairs, or any other congressionally chartered or
12recognized organization of honorably discharged members of the
13Armed Forces of the United States, or any of their auxiliaries.
14None of the insurance products promoted at this sales event are
15endorsed by those organizations, all of which offer free advice to
16veterans about how to qualify and apply for benefits.”
18(i) The statement in this subparagraph shall be disseminated,
19both orally and in writing, at the beginning of any event,
20presentation, seminar, workshop, or public gathering regarding
21veterans’ benefits or entitlements.
22(ii) The requirements of this subparagraph shall not apply in a
23case where the United States Department of Veterans Affairs, the
24California Department of Veterans Affairs, or other congressionally
25chartered or recognized organization of honorably discharged
26members of the Armed Forces of the United States, or any of their
27auxiliaries have granted written permission to the advertiser or
28promoter for the use of its name, symbol, or insignia to advertise
29or promote the event, presentation, seminar, workshop, or other
36 Representing that a product is made in California by using
37a Made in California label created pursuant to Section 12098.10
38of the Government Code, unless the product complies with Section
3912098.10 of the Government Code.
P7 1(b) (1) It is an unfair or deceptive act or practice for a mortgage
2broker or lender, directly or indirectly, to use a home improvement
3contractor to negotiate the terms of any loan that is secured,
4whether in whole or in part, by the residence of the borrower and
5which is used to finance a home improvement contract or any
begin delete thereofend delete.
For purposes of
7this subdivision, “mortgage broker or lender” includes a finance
8lender licensed pursuant to the California Finance Lenders Law
9(Division 9 (commencing with Section 22000) of the Financial
10Code), a residential mortgage lender licensed pursuant to the
11California Residential Mortgage Lending Act (Division 20
12(commencing with Section 50000) of the Financial Code), or a
13real estate broker licensed under the Real Estate Law (Division 4
14(commencing with Section 10000) of the Business and Professions
16(2) This section shall not be construed to either authorize or
17prohibit a home improvement contractor from referring a consumer
18to a mortgage broker or lender by this subdivision. However, a
19home improvement contractor may refer a consumer to a mortgage
20lender or broker if that referral does not violate Section 7157 of
21the Business and Professions Code or any other
begin delete provision ofend delete
22A mortgage lender or broker may purchase an executed home
23improvement contract if that purchase does not violate Section
247157 of the Business and Professions Code or any other
begin delete provision
law. Nothing in this paragraph shall have any effect on the
26application of Chapter 1 (commencing with Section 1801) of Title
272 to a home improvement transaction or the financing
begin delete thereofend delete.