BILL ANALYSIS �
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|Hearing Date:April 7, 2014 |Bill No:SB |
| |1326 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Ted W. Lieu, Chair
Bill No: SB 1326Author:Roth
As Introduced: February 21, 2014 Fiscal: Yes
SUBJECT: Assistive devices: warranty: regulations
SUMMARY: Provides authorization for the Speech-Language Pathology and
Audiology and Hearing Aid Dispensers Board (Board) to adopt
regulations to specify warranty provisions for assistive devices.
Existing law:
1)Authorizes the Board to license and regulate the practice of
speech-language pathology, audiology and the dispensing of hearing
aid devices pursuant to the Speech Language Pathologists and
Audiologists and Hearing Aid Dispensers Licensure Act. (Business
and Professions Code (BPC) � 2530)
2)Defines the obligations of retail sellers of assistive devices and
provides warranty/right of return provisions for consumers of
assistive devices including exact language to be included in the
notice to consumers. (Civil Code (CC) � 1793.02)
3)Provides definitions of assistive devices, hearing aids and hearing
aid dispensers:
a) Assistive Device is defined as: "Any instrument, apparatus,
or contrivance, including any component or part thereof or
accessory thereto, that it used or intended to be used, to assist
an individual with a disability in the mitigation or treatment of
an injury or disease or to assist or affect or replace the
structure or any function of the body or an individual with a
disability, except that this term does not include lenses and
ophthalmic goods unless they are sold or dispensed to a blind
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person and unless they are intended to assist the limited vision
of the person so disabled." (CC 1791 (o))
b) A hearing aid is defined as any wearable instrument or device
designed for or offered for the purpose of aiding or compensating
for impaired human hearing. (BPC � 2538.10 (d))
c) A hearing aid dispenser is a person engaged in the practice of
fitting or selling hearing aids to an individual with impaired
hearing. (BPC � 2538.14)
d) A hearing aid dispenser who is the owner, manager, or
franchisee at a location where hearing aids are fit or sold,
shall be responsible for the adequacy of the fitting or selling
of any hearing aid fit and sold by any licensee or licensees at
that location. (BPC � 2538.39)
4)Provides that the practice of fitting or selling hearing aids
includes those practices used for the purpose of selection and
adaptation of hearing aids, including direct observation of the ear,
testing of hearing in connection with the fitting and selling of
hearing aids, taking of ear mold impressions, fitting or sale of
hearing aids, and any necessary postfitting counseling.
(BPC � 2538.11(a))
5)Provides that it is unlawful for a licensed hearing aid dispenser to
fit or sell a hearing aid unless he or she first does all of the
following: (BPC � 2538.49)
a) Complies with all provisions of state laws and regulations
relating to the fitting or selling of hearing aids.
b) Conducts a direct observation of the purchaser's ear canals.
c) Informs the purchaser of the address and office hours at which
the licensee shall be available for fitting or postfitting
adjustments and servicing of the hearing aid or aids sold.
6)Requires that a hearing aid dispenser shall, upon the consummation
of a sale of a hearing aid, deliver to the purchaser a written
receipt, signed by or on behalf of the dispenser, containing all of
the following: (BPC � 2538.25)
a) The date of consummation of the sale.
b) Specifications as to the make, serial number, and model number
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of the hearing aid
or aids sold.
c) The address of the principal place of business of the
dispenser, and the address and office hours at which the
dispenser shall be available for fitting or postfitting
adjustments and servicing of the hearing aid or aids sold.
d) A statement to the effect that the aid or aids delivered to
the purchaser are used or reconditioned, as the case may be, if
that is the fact.
e) The number of the dispenser's license and the name and license
number of any other hearing aid dispenser or temporary licensee
who provided any recommendation or consultation regarding the
purchase of the hearing aid.
f) The terms of any guarantee or written warranty, required by
Section 1793.02 of the Civil Code, made to the purchaser with
respect to the hearing aid or hearing aids.
This bill: Authorizes the Board to adopt regulations to specify
warranty provisions for assistive devices.
FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1.Purpose. The bill is sponsored by Hearing Healthcare Providers of
California . This bill would authorize the Board to adopt
regulations to carry out the purposes and objectives of the warranty
provisions, thereby clarifying the consumer's right of return for
hearing aid devices.
According to the Author, the lack of clarity of the Song Beverly
Consumer Warranty 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
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aids.
The Author noted that the Song Beverly Consumer Warranty Act
includes the term, "completion of fitting," which has been
interpreted several ways. As a result, the burden is placed on the
provider in order to determine when the 30-day warranty period
starts. Often, these subjective interpretations lead to
disagreements between the provider and the consumer as "completion
of fitting" implies the level of consumer satisfaction with the
initial fit of the hearing aid device. Basing the start of the
warranty period on consumer satisfaction is difficult to define and
enforce.
According to the Author, the Song Beverly Consumer Warranty Act does
not adequately address the period of time, within the first 30-days,
when a hearing aid device is not in the possession of the consumer
due to needed adjustments or repairs.
The Author also indicates that other pertinent issues regarding
hearing aid dispensing are not covered in the Song Beverly Consumer
Warranty Act, including the number of trial devices a consumer is
entitled to, documentation of non-possession of the hearing aid by
the consumer, any non-refundable services provided to the hearing
aid device.
Finally, the Author indicates that the lack of clarity and
specificity in the Song Beverly Consumer Warranty Act provisions
result in disputes between consumers and hearing aid dispensers and
ultimately some form of legal recourse or mediation is initiated.
It can be difficult for the Board to mediate such complaints when
the parties involved have different interpretations of their rights
and responsibilities making the facts difficult to substantiate.
2.Background. The Song Beverly Consumer Warranty Act indicates that
the buyer of a used assistive device shall have the same rights and
remedies as the buyer of a new assistive device. Further, all new
and used assistive devices shall be accompanied by the retail
seller's written warranty. The warranty shall include 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 30 days of the date of actual receipt by you or
completion of fitting by the seller, whichever occurs later. If you
return the device, the seller will either adjust or replace the
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device or promptly refund the total amount paid. This warranty does
not affect the protections and remedies you have under other laws.'
In lieu of the words "30 days," the retail seller may specify any
longer period."
3.Comparison With Other States. In several states, provisions
regarding refunds and returns of hearing aids are mandated by
statute. Some of these states provide more specificity regarding
the refund and return policy.
Florida (Florida Statutes � 468.1246)
a) The seller must provide the buyer with written notice of a
30-day trial period and money-back guarantee. The guarantee must
permit the purchaser to cancel the purchase for a valid reason as
defined by the board within 30 days after receiving the hearing
aid, by returning the hearing aid or mailing written notice of
cancellation to the seller. If the hearing aid must be repaired,
remade, or adjusted during the 30-day trial period, the running
of the 30-day trial period is suspended 1 day for each 24-hour
period that the hearing aid is not in the purchaser's possession.
A repaired, remade, or adjusted hearing aid must be claimed by
the purchaser within 3 working days after notification of
availability. The running of the 30-day trial period resumes on
the day the purchaser reclaims the repaired, remade, or adjusted
hearing aid or on the fourth day after notification of
availability.
b) The licensee may retain charges for ear molds, services
provided, and a cancellation fee as prescribed by the board. If
a rule regarding the above is not set forth by the board, a
licensee may not charge a cancellation fee which exceeds 5
percent of the total amount available for refund, and this shall
be provided in writing to the purchaser prior to signing the
contract.
c) The seller must provide the refund within 30 days.
Texas (Texas Administrative Code Title 22, Part 7, Rule �141.16)
a) The buyer must be informed of a 30-day trial period by written
contract including all charges associated with such trial period.
b) The buyer shall be entitled to a refund of the purchase price
less the agreed-upon amount upon return of the hearing aid(s) in
good condition within the 30-day trial period ending 30 days from
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the date of delivery. Should the order be cancelled prior to
delivery, the licensee may retain the agreed-upon charges and
fees. Refund is due by the 30th day after the date the buyer
cancels or returns the hearing aid(s).
c) If the hearing aid(s) must be repaired, remade, or adjusted
during the 30-day trial period, the 30-day trial period is
suspended for one day for each 24-hour period that the aid(s) are
not in the buyer's possession. The 30-day trial period resumes
on the day the buyer reclaims the repaired, remade, or adjusted
aid(s) or within five working days of notification.
Oregon (Oregon Revised Statutes � 694.042)
a) In addition to any other rights and remedies the purchaser may
have, the purchaser shall have the right to rescind the
transaction if:
i. The purchaser consults with a physician or audiologist
subsequent to purchasing the hearing aid and the licensed
physician advises the purchaser against purchasing or using a
hearing aid and in writing specifies the medical reason.
ii. The seller fails to adhere to the practice standards
provided in the law, or fails to provide the statement required
in the law.
iii. The fitting of the hearing aid failed to meet current
industry standards.
iv. The licensee fails to meet any standard of conduct
prescribed in the law or rules regulating fitting and
dispensing of hearing aids and this failure affects in any way
the transaction which the purchaser seeks to rescind.
b) The purchaser of a hearing aid shall have the right to rescind
the transaction, for other than the seller's breach, if the
purchaser returns the product in good condition less normal wear
and tear and gives written notice of the intent to rescind the
transaction by written notice of the intent to rescind sent by
certified mail, return receipt, to the licensee's regular place
of business or returning the product with written notice of
intent to rescind to an authorized representative of the company
from which it was purchased.
c) The notice described above shall state that the transaction is
cancelled pursuant to this section and must be postmarked within
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30 days of the original delivery or within specified time periods
if the 30 day period has been extended in writing by both
parties. The consumer's rescission rights can only be extended
through a written agreement by both parties.
d) If conditions stated above have been met, the seller shall
issue a refund within 10 days after the cancellation. The
licensee may retain a portion of the purchase price as specified
by rule of the Oregon Health Licensing Agency when the sale is
rescinded during the 30 day rescission period. The seller shall
return all goods traded in and the purchaser shall incur no
additional liability for the cancellation.
Illinois (225 Illinois Compiled Statutes � 50)
a) All hearing instruments offered for sale must be accompanied
by a 30-business-day return privilege.
i. At the time of delivery, the licensee must furnish to the
buyer a fully completed receipt or copy of the contract that
contains a statement informing the buyer that he/she may return
the hearing instrument for a refund within 30 business days and
the day by which the refund period extends in bold 10 point
type.
ii. If a nonrefundable fee will be withheld from the buyer
in the event of return, the dollar amount must be clearly
stated in 10 point bold type on the face of the receipt or
contract.
iii. If during the 30-business-day refund period the hearing
instrument and/or accessories are returned for adjustment or
repair, the refund period will be extended, affording the buyer
the remainder of the refund period. The extension shall be
provided to the buyer in writing.
1.Attorney General Legal Opinion. According to the Office of the
Attorney General legal opinion No. 97-1208, "The seller may NOT
retain any portion of the total amount paid on the basis that such
part payment was for fitting the device or other ancillary service
or for one or more of the component parts that the seller refuses to
take back." This means that under current law, the hearing aid
dispenser may not retain any fees or other charges in connection
with the purchase, fitting, financing, or return of the device and
no fee should be listed as "non-refundable" on the purchase
agreement. This includes any cancellation fees.
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2.Arguments in Support. The Hearing Healthcare Providers of California
(Sponsor), Carlson's Hearing aid Center , Creekside Hearing Aid
Service and the AA Hearing Aids Center/Miracle-Ear similarly write
in their letters, "Song-Beverly does not clearly define when certain
warranty and right of return provisions apply to hearing aids. The
vagueness of these provisions leads to confusion by the hearing aid
dispenser and the consumer and makes it very difficult for the Board
to mediate consumer complaints when parties involved have different
interpretations of their rights and responsibilities."
The California Academy of Audiology supports AB 1326 and writes in
its letter, "Determining the tolling point for the Song-Beverly
30-day hearing aide warranty provision that provides for a
full-refund to the buyer, is uncertain, and can be left to
interpretation by both the audiologist and the consumer. The
present lack of specificity in Song Beverly can lead to disputes
between providers and consumers that could be mediated by this
bill."
3. Prior Legislation. SB 1444 (Anderson, 2012) was an identical
measure to this bill. SB 1444 would have authorized the
Speech-Language Pathology and Audiology and Hearing Aid Dispensers
Board to adopt regulations to specify warranty provisions for
assistive devices. ( Status : This bill passed this Committee, was
referred to Senate Judiciary Committee second, but the Author chose
to not have the bill heard in the Senate Judiciary Committee.)
4.Policy Issue : Should the Regulatory Authority Granted to the Board
be More Clearly Defined? Committee Staff suggests that the Author
amend the bill language to indicate the specific authority that the
Board desires in crafting regulations in regards to warranty
provisions for assistive devices. In its current form, the bill
would allow the Board to have very broad authority to craft
regulations that would pertain to warranties for all assistive
devices. Committee staff believes that this authority should be
narrowed and more clearly defined to include only the authority
necessary to promulgate regulations regarding the selling and buying
of hearing aids. These amendments could be made in Senate Judiciary
Committee since there are other concerns to be addressed within that
Committee.
Staff also notes that the Attorney General legal opinion 97-1208 has
dealt with this issue, and suggests that, should the Board be
granted the ability to craft regulations regarding warranty
provisions, the Board should take into consideration the Attorney
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General's opinion as it relates to the rights of a seller to retain
payment.
NOTE : Double-referral to Judiciary Committee (second).
SUPPORT AND OPPOSITION:
Support:
Hearing Healthcare Providers of California (Sponsor)
California Academy of Audiology
Creekside Hearing Aid Service
Carlson's Hearing Aid Center
AA Hearing Aids Center/Miracle-Ear
1 audiologist
Opposition:
None received as of March 28, 2014
Consultant:Le Ondra Clark, Ph.D.