Assembly Bill No. 431–Committee on Commerce and Labor

March 10, 1999

____________

Referred to Committee on Commerce and Labor

 

SUMMARY—Provides additional protections to individual buyers, lessees, borrowers and recipients of workers’ compensation benefits. (BDR 52-182)

FISCAL NOTE: Effect on Local Government: Yes.

Effect on the State or on Industrial Insurance: Yes.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

 

AN ACT relating to the protection of certain persons in commercial transactions; providing additional deceptive trade practices; revising the provisions regarding loans in the form of deferred deposits; extending the exemption of workers’ compensation benefits from creditors; providing a penalty; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. Chapter 598 of NRS is hereby amended by adding thereto

1-2 the provisions set forth as sections 2 and 3 of this act.

1-3 Sec. 2. A person engages in a "deceptive trade practice" when in the

1-4 course of his business or occupation he:

1-5 1. Fails to return to the buyer the full amount of any advance

1-6 payment or payment of any kind, whether the payment is made in the

1-7 form of money, goods, chattels or otherwise, received where merchandise

1-8 was to be furnished, under a purchase order, contract of sale or other

1-9 agreement, upon the condition that the buyer obtain credit at certain

1-10 terms and the credit application of the buyer was rejected.

1-11 2. Fails to return to the buyer the full amount of any charge for the

1-12 filing of an application for credit or for the investigation of the credit

1-13 history of the buyer where merchandise was to be furnished, under a

1-14 purchase order, contract of sale or other agreement, upon the condition

1-15 that the buyer obtain credit at certain terms and the credit application of

1-16 the buyer was rejected.

2-1 3. Includes a provision in a purchase order, contract of sale or other

2-2 agreement under which merchandise is to be furnished to a buyer that

2-3 requires the payment of liquidated damages by the buyer where the

2-4 merchandise is to be furnished upon the condition that the buyer obtain

2-5 credit at certain terms and the credit application of the buyer was

2-6 rejected.

2-7 Sec. 3. A person engages in a "deceptive trade practice" when in the

2-8 course of his business or occupation he conducts or negotiates for a

2-9 retail sale or lease of goods or services in a language other than English

2-10 and fails to provide to the other party an unexecuted copy of the contract

2-11 or other written agreement in the other language before the sale or lease

2-12 is consummated. This section does not apply if payment for the goods or

2-13 services was made by credit card issued to the buyer or lessee, whether

2-14 issued by the seller or by a third party.

2-15 Sec. 4. NRS 598.0903 is hereby amended to read as follows:

2-16 598.0903 As used in NRS 598.0903 to 598.0999, inclusive, and

2-17 sections 2 and 3 of this act, unless the context otherwise requires, the

2-18 words and terms defined in NRS 598.0905 to 598.0947, inclusive, and

2-19 sections 2 and 3 of this act have the meanings ascribed to them in those

2-20 sections.

2-21 Sec. 5. NRS 598.0905 is hereby amended to read as follows:

2-22 598.0905 "Advertisement" means the attempt by publication,

2-23 dissemination, solicitation or circulation to induce, directly or indirectly,

2-24 any person to enter into any obligation to lease or to acquire any title or

2-25 interest in any property.

2-26 Sec. 6. NRS 598.0915 is hereby amended to read as follows:

2-27 598.0915 A person engages in a "deceptive trade practice" if, in the

2-28 course of his business or occupation, he:

2-29 1. Knowingly passes off goods or services for sale or lease as those of

2-30 another.

2-31 2. Knowingly makes a false representation as to the source,

2-32 sponsorship, approval or certification of goods or services [.] for sale or

2-33 lease.

2-34 3. Knowingly makes a false representation as to affiliation, connection,

2-35 association with or certification by another.

2-36 4. Uses deceptive representations or designations of geographic origin

2-37 in connection with goods or services [.] for sale or lease.

2-38 5. Knowingly makes a false representation as to the characteristics,

2-39 ingredients, uses, benefits, alterations or quantities of goods or services for

2-40 sale or lease or a false representation as to the sponsorship, approval,

2-41 status, affiliation or connection of a person therewith.

3-1 6. Represents that goods for sale or lease are original or new if he

3-2 knows or should know that they are deteriorated, altered, reconditioned,

3-3 reclaimed, used or secondhand.

3-4 7. Represents that goods or services for sale or lease are of a particular

3-5 standard, quality or grade, or that such goods are of a particular style or

3-6 model, if he knows or should know that they are of another.

3-7 8. Disparages the goods, services or business of another by false or

3-8 misleading representation of fact.

3-9 9. Advertises goods or services with intent not to sell or lease them as

3-10 advertised.

3-11 10. Advertises goods or services for sale or lease with intent not to

3-12 supply reasonably expectable public demand, unless the advertisement

3-13 discloses a limitation of quantity.

3-14 11. Advertises under the guise of obtaining sales personnel when in

3-15 fact the purpose is to first sell or lease goods or services to the sales

3-16 personnel applicant.

3-17 12. Makes false or misleading statements of fact concerning the price

3-18 of goods or services [,] for sale or lease, or the reasons for, existence of or

3-19 amounts of price reductions.

3-20 13. Fraudulently alters any contract, written estimate of repair, written

3-21 statement of charges or other document in connection with the [provision]

3-22 sale or lease of goods or services.

3-23 14. Knowingly makes any other false representation in a transaction.

3-24 Sec. 7. NRS 598.0917 is hereby amended to read as follows:

3-25 598.0917 A person engages in a "deceptive trade practice" when in the

3-26 course of his business or occupation he employs "bait and switch"

3-27 advertising, which consists of an offer to sell or lease goods or services

3-28 which the seller or lessor in truth may not intend or desire to sell [,] or

3-29 lease, accompanied by one or more of the following practices:

3-30 1. Refusal to show the goods advertised.

3-31 2. Disparagement in any material respect of the advertised goods or

3-32 services or the terms of sale [.] or lease.

3-33 3. Requiring other sales or other undisclosed conditions to be met

3-34 before selling or leasing the advertised goods or services.

3-35 4. Refusal to take orders for the sale or lease of goods or services

3-36 advertised for delivery within a reasonable time.

3-37 5. Showing or demonstrating defective goods for sale or lease which

3-38 are unusable or impractical for the purposes set forth in the advertisement.

3-39 6. Accepting a deposit for the goods or services for sale or lease and

3-40 subsequently switching the purchase order or lease to higher priced goods

3-41 or services.

4-1 7. Tendering a lease of goods advertised for sale or a sale of goods

4-2 advertised for lease or tendering terms of sale or lease less favorable than

4-3 the terms advertised.

4-4 Sec. 8. NRS 598.092 is hereby amended to read as follows:

4-5 598.092 A person engages in a "deceptive trade practice" when in the

4-6 course of his business or occupation he:

4-7 1. Knowingly fails to identify goods for sale or lease as being

4-8 damaged by water.

4-9 2. Solicits by telephone or door to door as a lessor or seller, unless the

4-10 lessor or seller identifies himself, whom he represents and the purpose of

4-11 his call within 30 seconds after beginning the conversation.

4-12 3. Knowingly states that services, replacement parts or repairs are

4-13 needed when no such services, replacement parts or repairs are actually

4-14 needed.

4-15 4. Fails to make delivery of goods or services for sale or lease within a

4-16 reasonable time or to make a refund for the goods or services, if he allows

4-17 refunds.

4-18 5. Advertises or offers an opportunity for investment and:

4-19 (a) Represents that the investment is guaranteed, secured or protected in

4-20 a manner which he knows or has reason to know, is false or misleading;

4-21 (b) Represents that the investment will earn a rate of return which he

4-22 knows or has reasons to know is false or misleading;

4-23 (c) Makes any untrue statement of a material fact or omits to state a

4-24 material fact which is necessary to make another statement, considering the

4-25 circumstances under which it is made, not misleading;

4-26 (d) Fails to maintain adequate records so that an investor may determine

4-27 how his money is invested;

4-28 (e) Fails to provide information to an investor after a reasonable request

4-29 for information concerning his investment;

4-30 (f) Fails to comply with any law or regulation for the marketing of

4-31 securities or other investments; or

4-32 (g) Represents that he is licensed by an agency of the state to sell or

4-33 offer for sale investments or services for investments if he is not so

4-34 licensed.

4-35 6. Charges a fee for advice with respect to investment of money and

4-36 fails to disclose:

4-37 (a) That he is selling or offering to lease goods or services and, if he is,

4-38 their identity; or

4-39 (b) That he is licensed by an agency of any state or of the United States

4-40 to sell or to offer for sale investments or services for investments, or holds

4-41 any other license related to the service he is providing.

5-1 7. Notifies any person, by any means, as a part of an advertising plan

5-2 or scheme, that he has won a prize and that as a condition of receiving the

5-3 prize he must purchase or [rent] lease goods or services.

5-4 8. Fails to inform customers, if he does not allow refunds or exchanges,

5-5 that he does not allow refunds or exchanges by:

5-6 (a) Printing a statement on the face of the lease or sales receipt;

5-7 (b) Printing a statement on the face of the price tag; or

5-8 (c) Posting in an open and conspicuous place a sign at least 8 by 10

5-9 inches in size with boldface letters,

5-10 specifying that no refunds or exchanges are allowed.

5-11 Sec. 9. NRS 598.0923 is hereby amended to read as follows:

5-12 598.0923 A person engages in a "deceptive trade practice" when in the

5-13 course of his business or occupation he knowingly:

5-14 1. Conducts the business or occupation without all required state,

5-15 county or city licenses.

5-16 2. Fails to disclose a material fact in connection with the sale or lease

5-17 of goods or services.

5-18 3. Violates a state or federal statute or regulation relating to the sale

5-19 or lease of goods or services.

5-20 4. Uses coercion, duress or intimidation in a transaction.

5-21 Sec. 10. NRS 598.0953 is hereby amended to read as follows:

5-22 598.0953 1. Evidence that a person has engaged in a deceptive trade

5-23 practice is prima facie evidence of intent to injure competitors and to

5-24 destroy or substantially lessen competition.

5-25 2. The deceptive trade practices listed in NRS 598.0915 to 598.0925,

5-26 inclusive, and sections 2 and 3 of this act, are in addition to and do not

5-27 limit the types of unfair trade practices actionable at common law or

5-28 defined as such in other statutes of this state.

5-29 Sec. 11. Chapter 604 of NRS is hereby amended by adding thereto the

5-30 provisions set forth as sections 12 to 15, inclusive, of this act.

5-31 Sec. 12. 1. A registrant, before deferring a deposit, shall deliver to

5-32 the borrower a pamphlet approved by the commissioner that:

5-33 (a) Explains in simple English and Spanish all of the rights of a

5-34 borrower with respect to a deferred deposit;

5-35 (b) Contains a toll-free telephone number to communicate with the

5-36 commissioner concerning complaints or questions of the borrower; and

5-37 (c) Informs the borrower that the commissioner can tell the borrower

5-38 whether the lender is registered, whether complaints about him have

5-39 been filed and how any complaints were satisfactorily resolved.

5-40 2. A registrant, before deferring a deposit, shall provide each

5-41 borrower with a written agreement, approved by the commissioner, which

5-42 the borrower may keep and which contains the following information, in

6-1 English and, if different, in the language in which the loan was

6-2 negotiated:

6-3 (a) The name, address and telephone number of the location where

6-4 the loan is made, the name of the registrant and the name and title of the

6-5 employee who signs the agreement;

6-6 (b) An itemization of the fees and interest to be paid by the borrower;

6-7 (c) Disclosures required for a similar transaction by the federal Truth

6-8 in Lending Act, whether or not that act applies to the particular

6-9 transaction;

6-10 (d) Disclosures required under any state statute or regulation;

6-11 (e) A clear description of the borrower’s obligations under the

6-12 deferred deposit; and

6-13 (f) A conspicuous statement immediately above the borrower’s

6-14 signature, in at least 14-point bold type that states: "You may be held

6-15 liable in a civil action for collection of this deferred deposit. You cannot

6-16 be prosecuted in criminal court to collect this deferred deposit."

6-17 Sec. 13. A registrant who defers deposits shall post at each location

6-18 where he conducts that business a notice in English, Spanish and any

6-19 other language in which a significant amount of that business is

6-20 conducted:

6-21 1. Informing borrowers that a borrower may be held liable in a civil

6-22 action to collect a loan made in the form of a deferred deposit, but that

6-23 criminal prosecution cannot be used to collect such a loan; and

6-24 2. Containing a schedule of the dollar amount of fees and the annual

6-25 percentage rate of interest charged on such loans, with an example

6-26 showing the amounts that would be charged on a loan of $300 for 14

6-27 days and for 30 days and a statement of the corresponding annual

6-28 percentage rates for the two examples which must be stated as the

6-29 percentage that the total of all fees, interest and other charges bears to

6-30 the amount received by the borrower.

6-31 Sec. 14. If a check is not paid upon presentment because of

6-32 insufficient funds, the registrant may collect a fee of not more than $25.

6-33 Only one such fee may be charged, regardless of the number of times the

6-34 check is presented for payment.

6-35 Sec. 14.5. 1. If a borrower defaults on a loan made in the form of

6-36 a deferred deposit, the registrant shall, upon default, offer to enter into

6-37 an agreement with the borrower for repayment of the amount due. The

6-38 agreement must provide for the repayment of the amount due within 60

6-39 days after the default, without any further charges or interest.

6-40 2. If the borrower refuses to enter into such an agreement or defaults

6-41 on such an agreement, the registrant may convert the debt to a loan for

6-42 an indefinite term. The amount of the loan for an indefinite term must

6-43 not exceed the amount previously due, including accrued charges and

7-1 interest. Interest may be charged on the loan for an indefinite term at a

7-2 rate equal to or less than the prime rate at the largest bank in the State of

7-3 Nevada, as ascertained by the commissioner on January 1 or July 1, as

7-4 the case may be, immediately preceding the date of default, plus 10

7-5 percent.

7-6 Sec. 15. It is unlawful for a registrant to:

7-7 1. Use or threaten to use the criminal process in this or any other

7-8 state, or any civil process not available to creditors generally, to collect

7-9 on a deferred deposit.

7-10 2. Make an unconscionable loan in the form of a deferred deposit. A

7-11 loan that exceeds one-third of the borrower’s expected net income during

7-12 the term of the loan is unconscionable unless justified by particular

7-13 circumstances.

7-14 3. Charge to cash a check representing the proceeds of a deferred

7-15 deposit.

7-16 4. Make more than one loan in the form of a deferred deposit to the

7-17 same borrower at one time or make such a loan to a borrower who has

7-18 two or more previous loans outstanding.

7-19 5. Establish or extend the period for the repayment, renewal,

7-20 refinancing or consolidation of an outstanding loan made in the form of

7-21 a deferred deposit to the same borrower beyond 6 weeks after the

7-22 expiration of the initial loan period.

7-23 6. Accept any collateral for a loan made in the form of a deferred

7-24 deposit.

7-25 7. Include in the written agreement required by section 12 of this act

7-26 for a loan made in the form of a deferred deposit:

7-27 (a) A promise by the borrower to hold the lender harmless;

7-28 (b) A confession of judgment by the borrower;

7-29 (c) A waiver by the borrower of his right to a jury;

7-30 (d) A requirement for arbitration;

7-31 (e) An assignment or order for payment of wages or other

7-32 compensation due the borrower; or

7-33 (f) A waiver of any claim or defense arising out of the agreement or a

7-34 waiver of any provision of this chapter.

7-35 Sec. 16. NRS 604.090 is hereby amended to read as follows:

7-36 604.090 1. Except as otherwise provided in subsection 2, it is

7-37 unlawful to operate a check-cashing or deferred deposit service without

7-38 being registered with the commissioner.

7-39 2. The provisions of this chapter do not apply to:

7-40 (a) A person doing business pursuant to the authority of any law of this

7-41 state or of the United States relating to banks, savings banks, trust

7-42 companies, savings and loan associations, credit unions, development

8-1 corporations, mortgage companies, thrift companies, pawnbrokers or

8-2 insurance companies.

8-3 (b) [A person licensed to make installment loans pursuant to chapter 675

8-4 of NRS.

8-5 (c)] A person who is primarily engaged in the retail sale of goods or

8-6 services who:

8-7 (1) As an incident to or independently of a retail sale or service from

8-8 time to time cashes checks for a fee or other consideration of not more than

8-9 $2; and

8-10 (2) Does not hold himself out as a check-cashing service.

8-11 [(d)] (c) A person while performing any act authorized by a license

8-12 issued pursuant to chapter 671 of NRS.

8-13 [(e)] (d) A person who holds a nonrestricted gaming license issued

8-14 pursuant to chapter 463 of NRS while performing any act in the course of

8-15 that licensed operation.

8-16 [(f)] (e) A person who is exclusively engaged in a check-cashing service

8-17 relating to out-of-state checks.

8-18 [(g)] (f) A corporation organized pursuant to the laws of this state that

8-19 has been continuously and exclusively engaged in a check-cashing service

8-20 in this state since July 1, 1973.

8-21 Sec. 17. NRS 604.160 is hereby amended to read as follows:

8-22 604.160 A registrant shall:

8-23 1. Post in a conspicuous place in every location at which he conducts

8-24 business under his certificate of registration a notice that states the fees

8-25 charged for cashing checks . [or entering into a deferred deposit

8-26 transaction.]

8-27 2. Give written notice to each customer of the fees charged for cashing

8-28 checks . [or entering into a deferred deposit transaction.] The notice must

8-29 be signed by the customer before [any such services are] the service is

8-30 provided.

8-31 Sec. 18. NRS 604.170 is hereby amended to read as follows:

8-32 604.170 1. The commissioner may establish by regulation:

8-33 (a) The fees that may be imposed by a check-cashing [or deferred

8-34 deposit] service for cashing checks ; [or entering into a deferred deposit

8-35 transaction;] and

8-36 (b) The penalties that may be imposed by the commissioner for a

8-37 violation of the provisions of this chapter or the regulations adopted

8-38 pursuant thereto.

8-39 2. The commissioner shall adopt such other regulations as are

8-40 necessary to carry out the provisions of this chapter.

9-1 Sec. 19. NRS 482.351 is hereby amended to read as follows:

9-2 482.351 1. No vehicle dealer or rebuilder may employ "bait and

9-3 switch" advertising or otherwise intentionally publish, display or circulate

9-4 any advertising which is misleading or inaccurate in any material particular

9-5 or which misrepresents any of the products sold, leased, manufactured,

9-6 handled or furnished to the public.

9-7 2. As used in this section, "bait and switch" advertising consists of an

9-8 offer to sell or lease a vehicle or goods or services related to a vehicle

9-9 which the seller or lessor may not intend or desire to sell or lease,

9-10 accompanied by one or more of the following practices:

9-11 (a) Refusal to show the vehicle or goods advertised;

9-12 (b) Refusal to offer or carry out the transaction in the manner

9-13 advertised including as a sale if selling was advertised or as a lease if

9-14 leasing was advertised.

9-15 (c) Disparagement in any material respect of the advertised vehicle,

9-16 goods or services or the terms of the sale or lease;

9-17 (d) Requiring other sales or other undisclosed conditions to be met

9-18 before selling or leasing the advertised vehicle, goods or services;

9-19 (e) Refusal to take orders for the vehicle, goods or services advertised

9-20 for delivery within a reasonable time;

9-21 (f) Showing or demonstrating a defective vehicle or defective goods

9-22 which are unusable or impractical for the purposes set forth in the

9-23 advertisement; or

9-24 (g) Accepting a deposit for the vehicle, goods or services and

9-25 subsequently switching the purchase order or agreement to a higher

9-26 priced vehicle or higher priced goods or services or subsequently

9-27 switching the type of transaction from a sale to a lease or from a lease to

9-28 a sale.

9-29 3. The director [, after hearing, may adopt such rules and] shall adopt

9-30 such regulations as may be necessary for making the administration of this

9-31 section effective.

9-32 Sec. 20. NRS 482.36395 is hereby amended to read as follows:

9-33 482.36395 No motor vehicle manufacturer, distributor, factory branch

9-34 or representative thereof may:

9-35 1. Encourage, aid or abet a dealer to sell or lease motor vehicles

9-36 through any false, deceptive or misleading sales or financing practice.

9-37 2. Refuse to deliver an order of a dealer within 60 days after the order

9-38 is received in writing unless the inability to deliver the order is caused by

9-39 shortage or curtailment of material, labor, production capacity,

9-40 transportation or utility services, or to any labor or production difficulty, or

9-41 to any cause beyond the reasonable control of the motor vehicle

9-42 manufacturer or distributor.

10-1 3. Coerce, compel or otherwise require any dealer to pay over or to

10-2 repay any amount of money or other consideration which is in

10-3 substantiation of or repayment for any advertising, [promotion]

10-4 promotional activity or scheme, or method of implementing the sale or

10-5 lease of motor vehicles.

10-6 4. Demand or require, directly or indirectly, a dealer to pay any amount

10-7 of money which is projected or proposed for the advertisement, display or

10-8 promotion of any motor vehicle which is being sold or leased pursuant to a

10-9 franchise, unless the dealer has agreed thereto in writing.

10-10 5. Demand or require, directly or indirectly, a dealer to comply with

10-11 standards which exceed commonly accepted business practices within the

10-12 automotive industry relating to sales , leases or service of motor vehicles.

10-13 6. Based solely upon the results of a survey of a dealer’s customers

10-14 conducted by or on behalf of a motor vehicle manufacturer which is

10-15 intended or otherwise purports to measure the performance of a dealer:

10-16 (a) Discriminate, directly or indirectly, against a dealer; or

10-17 (b) Take any action to terminate a dealer’s franchise.

10-18 This subsection does not prohibit a motor vehicle manufacturer, distributor,

10-19 factory branch or representative thereof from conducting a contest or other

10-20 award program to recognize the performance of a dealer based on

10-21 reasonable criteria relating to sales , leases or service of motor vehicles.

10-22 Sec. 21. NRS 616C.205 is hereby amended to read as follows:

10-23 616C.205 Except as otherwise provided in this section and NRS

10-24 31A.150 and 31A.330, compensation payable or paid under chapters 616A

10-25 to 616D, inclusive, of NRS, whether determined or due, or not, is not,

10-26 before the issuance and delivery of the check, assignable, is exempt from

10-27 attachment, garnishment and execution, and does not pass to any other

10-28 person by operation of law. In the case of the death of an injured employee

10-29 covered by chapters 616A to 616D, inclusive, of NRS from causes

10-30 independent from the injury for which compensation is payable, any

10-31 compensation due the employee which was awarded or accrued but for

10-32 which a check was not issued or delivered at the date of death of the

10-33 employee is payable to his dependents as defined in NRS 616C.505.

10-34 Sec. 22. Chapter 675 of NRS is hereby amended by adding thereto a

10-35 new section to read as follows:

10-36 1. A licensee shall not make a loan in the form of a deferred deposit

10-37 unless the licensee is registered pursuant to chapter 604 of NRS.

10-38 2. As used in this section, "deferred deposit" has the meaning

10-39 ascribed to it in NRS 604.060.

10-40 Sec. 23. NRS 675.470 is hereby amended to read as follows:

10-41 675.470 Any person and the several members, officers, directors,

10-42 agents and employees thereof who violate or participate in the violation of

11-1 any provision of NRS 675.060 or section 22 of this act are guilty of a

11-2 misdemeanor.

11-3 Sec. 24. The amendatory provisions of section 23 of this act do not

11-4 apply to offenses that were committed before October 1, 1999.

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