REPORT TITLE:
Unfair and Deceptive Practices
DESCRIPTION:
Prohibits the offering of a prize in a drawing or sweepstakes
without a written and conspicuous disclosure that some or all of
the prizes may not be awarded and indicating the dates on which a
winner will be determined. Requires the filing of a minimum
$10,000 bond by the offeror of a prize of real property. (CD1)
236
THE SENATE S.B. NO. S.D. 1
TWENTIETH LEGISLATURE, 1999 H.D. 1
STATE OF HAWAII C.D. 1
________________________________________________________________
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A BILL FOR AN ACT
RELATING TO UNFAIR AND DECEPTIVE PRACTICES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
1 SECTION 1. Chapter 481B-1.6, Hawaii Revised Statutes, is
2 amended to read as follows:
3 "[[]ยง481B-1.6[]] Offers of gifts or prizes; unlawful.(a)
4 It shall be an unlawful practice under this chapter for any
5 person to enforce or attempt to enforce an agreement to purchase,
6 lease, or rent a consumer product if the offer to sell, lease, or
7 rent was conducted in a manner not in compliance with the
8 requirements of this chapter.
9 (b) It shall be an unlawful practice under this chapter for
10 any person to offer a gift, prize, or award by means of written
11 notice sent through the mail or by telephone with the intent to
12 sell, lease, or rent a consumer product, or to initiate the sale,
13 lease, or rental of a consumer product when, at the time of the
14 offer, the consumer product and all the material terms of the
15 sale, lease, or rental transaction, including the price,
16 handling, shipping, delivery, or any other fee, are not clearly
17 and conspicuously disclosed.
18 (c) It shall be an unlawful practice for any person to
19 offer a gift, prize, or award by means of written notice sent
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C.D. 1
1 through the mail or by telephone with the intent to receive a
2 payment of any money when, at the time of the offer, all of the
3 material terms of the transaction, including handling, shipping,
4 delivery, or any other fee, are not clearly and conspicuously
5 disclosed and the consumer is requested to:
6 (1) Further the transaction by calling a 900 number or "pay
7 per call"; or
8 (2) Send payment of any money to receive or redeem the
9 prize.
10 (d) Any offer of a prize made by means of written notice
11 sent through the mail or by telephone shall include:
12 (1) Information on the odds of being able to receive the
13 prize or if the odds are not calculable in advance, the
14 factors used in calculating the odds;
15 (2) A statement that no purchase or payment is required to
16 win a prize or to participate in a prize promotion; and
17 (3) Instructions on how to participate without purchase or
18 payment including an address or toll-free telephone
19 number to which a consumer may write or call for
20 information on how to participate.
21 (e) It shall be an unlawful practice and a violation of
22 this chapter for any person, in any contest or sweepstakes in
23 which the winning entry or entries are to be determined by a
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1 drawing or some other method based on an element of chance:
2 (1) To promote a contest or sweepstakes in which some or
3 all of the prizes may not be awarded, or to fail to
4 award all prizes or awards offered, unless the person
5 makes the following disclosures to each offeree in
6 writing and in a conspicuous manner prior to the
7 acceptance of the offeree's entry:
8 (A) That some or all of the prizes may not be awarded;
9 and
10 (B) The date or dates on which a determination of
11 winners will be made; and
12 (2) To offer a prize of real property unless the offeror
13 files and maintains with the director a bond in a sum
14 not less than $10,000, executed by the offeror, and
15 naming the director as the obligee and a surety company
16 authorized to do business in the State as surety. The
17 bond shall be continuous in form and conditioned upon
18 the award of the real property to an eligible
19 participant. The bond shall run to the State for the
20 benefit of any person who failed to receive the real
21 property due to the failure of the offeror to award the
22 real property pursuant to the terms of the offer. The
23 surety may cancel the bond by giving sixty days notice
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1 in writing to the director. Upon cancellation or
2 expiration of the bond, the surety shall remain liable
3 for any claims against the bond for a period of one
4 year; provided that the claim arose while the bond was
5 in effect and the director notifies the surety of any
6 claims within ninety days of discovery of the claim."
7 SECTION 2. Statutory material to be repealed is bracketed.
8 New statutory material is underscored.
9 SECTION 3. This Act shall take effect upon its approval.