BILL NUMBER: AB 3320	CHAPTERED
	BILL TEXT

	CHAPTER   785
	FILED WITH SECRETARY OF STATE   SEPTEMBER 23, 1996
	APPROVED BY GOVERNOR   SEPTEMBER 21, 1996
	PASSED THE ASSEMBLY   AUGUST 28, 1996
	PASSED THE SENATE   AUGUST 20, 1996
	AMENDED IN SENATE   AUGUST 5, 1996
	AMENDED IN SENATE   JULY 2, 1996
	AMENDED IN SENATE   JUNE 17, 1996
	AMENDED IN ASSEMBLY   MAY 13, 1996
	AMENDED IN ASSEMBLY   MAY 2, 1996
	AMENDED IN ASSEMBLY   MARCH 28, 1996

INTRODUCED BY  Assembly Member Speier

                        FEBRUARY 23, 1996

   An act to amend Section 17538 of the Business and Professions
Code, relating to sales.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 3320, Speier.  Telephone, mail order, and catalog sales:
Internet.
   Existing law regulates the sale, lease, or offering for sale or
lease of goods or services by telephone, mail order, or catalog.
   This bill would expand those provisions to apply to sales or
leases conducted using the Internet.  The bill would require a vendor
conducting business through the Internet or any other electronic
means of communication to make specified disclosures to a buyer.  A
violation of these provisions would be a misdemeanor, thus the bill
would impose a state-mandated local program.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 17538 of the Business and Professions Code is
amended to read:
   17538.  (a) It is unlawful in the sale or lease or offering for
sale or lease of goods or services, for any person conducting sales
or leases by telephone, Internet or other electronic means of
communication, mail order, or catalog in this state, including, but
not limited to, the offering for sale or lease on television, radio,
Internet, or other electronic means of communication or
telecommunications device of goods or services which may be ordered
by mail, telephone, Internet, or other electronic means of
communication or telecommunications device, or for any person
advertising in connection with those sales, leases, or advertisements
a mailing address, telephone number, or Internet or other electronic
address, to accept payment from or for a buyer, for the purchase or
lease of goods or services ordered by mail, telephone, Internet, or
other electronic means of communication or telecommunications device,
whether payment to the vendor is made directly, through the mails,
by means of a transfer of funds from an account of the buyer or any
other person, or by any other means, and then permit 30 days, unless
otherwise conspicuously stated in the offering or advertisement, or
unless a shorter time is clearly communicated by the person
conducting the sale or lease, to elapse without doing any one of the
following things:
   (1) Shipping, mailing, or providing the goods or services ordered.

   (2) Mailing a full refund or, if payment was made by means of a
transfer from an account, (A) crediting the account in the full
amount of the debit, or (B) if a third party is the creditor, issuing
a credit memorandum to the third party who shall promptly credit the
account in the full amount of the debit.
   (3) Sending the buyer a letter or other written notice (A)
advising the buyer of the duration of an expected delay expressed as
a specific number of days or weeks, or proposing the substitution of
goods or services of equivalent or superior quality, and (B) offering
to make a full refund, in accordance with paragraph (2), within one
week if the buyer so requests.  The vendor shall provide to the buyer
in that letter or written notice a toll-free telephone number or
other cost-free method to communicate the buyer's request for a full
refund.  If the vendor proposes to substitute goods or services, the
vendor shall describe the substitute goods or services in detail,
indicating fully how the substitute differs from the goods or
services ordered.
   (4) (A) Shipping, mailing, or providing substitute goods or
services of equivalent or superior quality, if the buyer is extended
the opportunity to return the substitute goods or services and the
vendor promises to refund to the buyer (i) the cost of returning the
substitute goods or services and (ii) any portion of the purchase
price previously paid by the buyer.
   (B) Except as provided in subparagraph (C), a notice to the buyer
shall accompany the mailing, shipping, or providing of the substitute
goods or services which informs the buyer of the substitution;
describes fully how the substitute differs from the goods or services
ordered, except that obvious nontechnical differences, such as
color, need not be described; and discloses the buyer's right to
reject the substitute goods or services and obtain a full refund of
the amount paid, plus the cost of returning the substitute goods or
services.
   (C) The vendor may omit from the notice required by subparagraph
(B) a description of how the substitute goods or services differ from
the ordered goods or services if the notice otherwise complies with
subparagraph (B), and if all the following requirements are complied
with:
   (i) The vendor maintains at least 100 retail outlets located in at
least 20 counties in this state that are open to the public
regularly during normal business hours where buyers can order catalog
goods, pick them up, and return them for refunds.
   (ii) The vendor maintains a toll-free telephone number and
provides to each buyer, at the time of the buyer's call, a full
description of how substitute goods or services differ from ordered
goods or services.  The toll-free telephone number shall operate and
be staffed at all times during which goods or services normally are
available for pick up from the vendor's retail outlets.
   (iii) If the buyer picks up substitute goods or services from the
vendor's retail outlet, the notice required by subparagraph (B) as
modified by this subparagraph is placed on, or attached to, the
exterior of the package or wrapping containing the substitute, or is
handed to the buyer at the time the buyer picks up the substitute.
   (iv) The notice contains a reference number or some other means of
identifying the ordered goods or services and the substitute goods
or services.
   (v) The notice contains the vendor's toll-free telephone number
and instructions to the buyer that the buyer may call that number to
obtain a full description of how the substitute differs from the
ordered goods.
   (b) For purposes of paragraphs (3) and (4) of subdivision (a),
goods or services shall be considered of "equivalent or superior
quality" only if they are (1) substantially similar to the goods or
services ordered, (2) fit for the usual purposes for which the goods
or services ordered are used, and (3) normally offered by the vendor
at a price equal to or greater than the price of the goods or
services ordered.
   (c) When a buyer makes an initial application for an open-end
credit plan, as defined in the Federal Consumer Credit Protection Act
(15 U.S.C. Sec.  1682), at the same time the goods or services are
ordered, and the goods or services are to be purchased on credit, the
person conducting the business shall have 50 days, rather than 30
days, to perform the actions specified in this section.
   (d) A vendor conducting business through the Internet or any other
electronic means of communication shall do  all of the following
when the transaction involves a buyer located in California:
   (1) Before accepting any payment or processing any debit or credit
charge or funds transfer, the vendor shall disclose to the buyer in
writing or by electronic means of communication, such as E-mail or an
on-screen notice, the vendor's return and refund policy, the legal
name under which the business is conducted and, except as provided in
paragraph (3), the complete street address from which the business
is actually conducted.
   (2) If the disclosure of the vendor's legal name and address
information required by this subdivision is made by on-screen notice,
all of the following shall apply:
   (A) The disclosure of the legal name and address information shall
appear on any of the following:  (i) the first screen displayed when
the vendor's electronic site is accessed, (ii) on the screen on
which goods or services are first offered, (iii) on the screen on
which a buyer may place the order for goods or services or (iv) on
the screen on which the buyer may enter payment information, such as
a credit card account number.  The communication of that disclosure
shall not be structured to be smaller or less legible than the text
of the offer of the goods or services.
   (B) The disclosure of the legal name and address information shall
be accompanied by an adjacent statement describing how the buyer may
receive the information at the buyer's E-mail address.  The vendor
shall provide the disclosure information to the buyer at the buyer's
E-mail address within five days of receiving the buyer's request.
   (C) Until the vendor complies with subdivision (a) in connection
with all buyers of the vendor's goods or services, the vendor shall
make available to a buyer and any person or entity who may enforce
this section pursuant to Section 17535 on-screen access to the
information required to be disclosed under this subdivision.
   (3) The complete street address need not be disclosed as required
by paragraph (1) if the vendor utilizes a private mailbox receiving
service and  all of the following conditions are met:  (A) the vendor
satisfies the conditions described in paragraph (2) of subdivision
(b) of Section 17538.5, (B) the vendor discloses the actual street
address of the private mailbox receiving service in the manner
prescribed by this subdivision for the disclosure of the vendor's
actual street address, and (C) the vendor and the private mailbox
receiving service comply with all of the requirements of subdivisions
(c) to (f), inclusive, of Section 17538.5.
   (e) As used in this section and Section 17538.3, the following
words have the following meanings:
   (1) "Goods" means tangible chattels, including certificates or
coupons exchangeable for those goods, and including goods which, at
the time of the sale or subsequently, are to be so affixed to real
property as to become a part of that real property, whether or not
severable therefrom.
   (2) "Person" means an individual, partnership, corporation,
association, or other group, however organized.
   (3) "Buyer" means a person who seeks or acquires, by purchase or
lease, any goods or services for any purpose.
   (4) "Services" means work, labor, and services, including services
furnished in connection with the sale or repair of goods.
   (5) "Vendor" means a person who, as described in subdivision (a),
vends, sells, leases, supplies, or ships goods or services, who
conducts sales or leases of goods or services, or who offers goods or
services for sale or lease.  "Vendor" does not include a person
responding to an electronic agent in connection with providing goods
or services to a buyer if the aggregate amount of all transactions
with the buyer does not exceed ten dollars ($10).
   (6) "Internet" means the global information system that is
logically linked together by a globally unique address space based on
the Internet Protocol (IP), or its subsequent extensions; and is
able to support communications using the Transmission Control
Protocol/Internet Protocol (TCP/IP) suite, or its subsequent
extensions, or other IP-compatible protocols; and provides, uses, or
makes accessible, either publicly or privately, high level services
layered on the communications and related infrastructure described
herein.
   (7) "Electronic agent" means a computer program designed,
selected, or programmed to initiate or respond to electronic messages
or performances without review by an individual.
   (f) Any violation of the provisions of this section is a
misdemeanor punishable by imprisonment in the county jail not
exceeding six months, or by a fine not exceeding one thousand dollars
($1,000), or by both.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.
   Notwithstanding Section 17580 of the Government Code, unless
otherwise specified, the provisions of this act shall become
operative on the same date that the act takes effect pursuant to the
California Constitution.