17511-17514
BUSINESS AND PROFESSIONS CODE
SECTION 17511-17514
17511. (a) The Legislature finds and declares that the widespread
use of telephone solicitors to initiate sales of goods, real
property, and investment opportunities has created numerous problems
for purchasers and investors which are inimical to good business
practices. Telephonic sales have a significant impact upon the
economy and well-being of this state and its local communities.
However, purchasers have suffered substantial losses because of (1)
misrepresentations, (2) lack of full and complete information
regarding both the telephonic seller and the goods and investments
the telephonic seller is offering, and (3) failure of delivery. The
provisions of this article relating to telephonic sellers are
necessary for the public welfare.
(b) It is the intent of the Legislature in enacting this article
to (1) provide each prospective telephonic sales purchaser with
information necessary to make an intelligent decision regarding the
offer made, (2) safeguard the public against deceit and financial
hardship, (3) insure, foster, and encourage competition and fair
dealings among telephonic sellers by requiring adequate disclosure,
and (4) prohibit representations that tend to mislead. This article
shall be construed liberally in order to achieve these purposes.
17511.1. As used in this article, "telephonic seller" or "seller"
means a person who, on his or her own behalf or through salespersons
or through the use of an automatic dialing-announcing device, as
defined in Section 2871 of the Public Utilities Code, causes a
telephone solicitation or attempted telephone solicitation to occur
which meets the criteria specified in subdivision (a), (b), (c), or
(d) and who is not exempted by subdivision (e), as follows:
(a) A telephone solicitation or attempted telephone solicitation
wherein the telephonic seller initiates telephonic contact with a
prospective purchaser and represents or implies one or more of the
following:
(1) That a prospective purchaser who buys one or more items will
also receive additional or other items, whether or not of the same
type as purchased, without further cost. For purposes of this
subdivision, "further cost" does not include actual postage or common
carrier delivery charges, if any.
(2) That a prospective purchaser will receive a prize or gift, if
the person also encourages the prospective purchaser to do either of
the following:
(A) Purchase or rent any goods or services.
(B) Pay any money, including, but not limited to, a delivery or
handling charge.
(3) That a prospective purchaser is able to obtain any item or
service at a price which the seller states or implies is below the
regular price of the item or service offered. This paragraph shall
not apply to retailers who, within the previous 12 months, have sold
a majority of their goods or services through in-person sales at
retail stores.
(4) That a prospective purchaser who buys office equipment or
supplies will, because of some unusual event or imminent price
increase, be able to buy these items at prices which are below those
that are usually charged or will be charged for the items.
(5) That the seller is a person other than the person he or she
is.
(6) That the items for sale are manufactured or supplied by a
person other than the actual manufacturer or supplier.
(7) That the seller is offering to sell the prospective purchaser
any gold, silver, or other metals, including coins, diamonds, rubies,
sapphires, or other stones, coal or other minerals, or any interest
in oil, gas, or mineral fields, wells, or exploration sites, or any
other investment opportunity of any type whatsoever.
(8) That the seller is offering to make a loan, or to arrange or
assist in arranging a loan or to assist in providing information
which may lead to the obtaining of a loan, unless no payment of any
kind is made until the loan proceeds are disbursed to the borrower.
(9) That a prospective purchaser will receive a credit card, as
defined in subdivision (a) of Section 1747.02 of the Civil Code, if
the purchaser pays an up front or preapplication fee for the credit
card to the telephonic seller.
(b) A solicitation or attempted solicitation which is made by
telephone in response to inquiries generated by unrequested
notifications sent by the seller to persons who have not previously
purchased goods or services from the seller or who have not
previously requested credit from the seller, to a prospective
purchaser wherein the seller represents or implies to the recipient
of the notification that any of the following applies to the
recipient:
(1) That the recipient has in any manner been specially selected
to receive the notification or the offer contained in the
notification.
(2) That the recipient will receive a prize or gift if the
recipient calls the seller.
(3) That if the recipient buys one or more items from the seller,
the recipient will also receive additional or other items, whether or
not of the same type as purchased, without further cost or at a cost
which the seller states or implies is less than the regular price of
such items.
However, this subdivision does not apply to the solicitation of
sales by a catalog seller who periodically issues and delivers
catalogs to potential purchasers by mail or by other means. This
exception only applies if the catalog includes a written description
or illustration and the sales price of each item of merchandise
offered for sale, includes at least 24 full pages of written material
or illustrations, is distributed in more than one state, and has an
annual circulation of not less than 250,000 customers.
(c) A solicitation or attempted solicitation which is made by
telephone in response to inquiries generated by advertisements on
behalf of the telephonic seller wherein it is represented or implied
that the seller is offering to sell to the prospective purchaser any
gold, silver, or other metals, including coins, diamonds, rubies,
sapphires, or other stones, coal or other minerals, or any interest
in oil, gas, or mineral fields, wells, or exploration sites, or any
other investment opportunity of any type whatsoever.
(d) A solicitation or attempted solicitation which is made by
telephone in response to inquiries generated by advertisements on
behalf of the telephonic seller wherein it is represented or implied
that the seller is offering to make a loan or to arrange or assist in
arranging a loan or to assist in providing information which may
lead to the obtaining of a loan, unless no payment of any kind is
made until the loan proceeds are disbursed to the borrower.
(e) For purposes of this article, "telephonic seller" or "seller"
does not include any of the following:
(1) A person offering or selling a security qualified under
Section 25110, 25120, or 25130 of the Corporations Code or exempt
from qualification under Chapter 1 (commencing with Section 25100) of
Part 2 of Division 1 of Title 4 of the Corporations Code. The fact
that a notice claiming an exemption under the Corporate Securities
Law of 1968 is filed with the Department of Corporations does not
create an exemption under this paragraph.
(2) A person licensed pursuant to Part 1 (commencing with Section
10000) of Division 4, when the solicited transaction is governed by
that law.
(3) A person licensed pursuant to Chapter 9 (commencing with
Section 7000) of Division 3, when the solicited transaction is
governed by that law.
(4) A person licensed or certificated pursuant to Part 2
(commencing with Section 680) of Division 1 of the Insurance Code,
including a person licensed pursuant to Chapter 5 (commencing with
Section 1621) thereof, when the solicited transaction is governed by
that law.
(5) A person offering or selling a franchise registered pursuant
to Section 31110 of the Corporations Code or exempt from registration
under Chapter 1 (commencing with Section 31100) of Part 2 of
Division 5 of Title 4 of the Corporations Code. The fact that a
notice claiming an exemption under the Franchise Investment Law is
filed with the Department of Corporations does not create an
exemption under this paragraph.
(6) A person soliciting the sale of a seller assisted marketing
plan, as defined in Title 2.7 (commencing with Section 1812.200) of
Part 4 of Division 3 of the Civil Code, who has filed with the
Attorney General the documents required by Section 1812.203 of the
Civil Code.
(7) A person primarily soliciting the sale of a newspaper of
general circulation, as defined in Article 1 (commencing with Section
6000) of Chapter 1 of Division 7 of Title 1 of the Government Code,
a magazine, or membership in a book or record club whose program
operates in conformity with the requirements of Section 1584.5 of the
Civil Code.
(8) A person soliciting business from prospective purchasers who
have previously purchased from the business enterprise for which the
person is calling.
(9) A person soliciting without the intent to complete and who
does not complete the sales presentation during the telephone
solicitation but completes the sales presentation at a later
face-to-face meeting between the solicitor and the prospective
purchaser. However, if a seller, directly following a telephone
solicitation, causes an individual whose primary purpose it is to go
to the prospective purchaser to collect the payment or deliver any
item purchased, this exemption does not apply.
(10) Any supervised financial institution or parent, subsidiary,
or subsidiary of parent thereof. As used in this paragraph,
"supervised financial institution" means any commercial bank, trust
company, savings and loan association, credit union, industrial loan
company, personal property broker, consumer finance lender,
commercial finance lender, or insurer, provided that the institution
is subject to supervision by an official or agency of this state or
of the United States.
(11) A person soliciting the sale of a preneed funeral arrangement
regulated by Article 9 (commencing with Section 7735) of Chapter 12
of Division 3.
(12) A person licensed pursuant to Chapter 19 (commencing with
Section 9600) of Division 3 when acting pursuant to that licensure.
(13) A person soliciting the sale of services provided by a cable
television system licensed or franchised pursuant to Section 53066 of
the Government Code or any other authority.
(14) A person or an affiliate of a person whose business is
regulated by the Public Utilities Commission.
(15) A person soliciting the sale of a commodity pursuant to Part
2 (commencing with Section 58601) of Division 21 of the Food and
Agricultural Code, if the solicitation neither intends to, nor
actually results in, a sale which costs the purchaser in excess of
one hundred dollars ($100).
(16) An issuer or subsidiary of an issuer that has a security
listed on a national securities exchange or designated as a national
market system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc., if the exchange or
interdealer quotation system has been certified by rule or order of
the Commissioner of Corporations under subdivision (o) of Section
25100 of the Corporations Code. A subsidiary of an issuer that
qualifies for exemption under this paragraph is not itself exempt
unless not less than 60 percent of the voting power of its shares is
owned by the qualifying issuer or issuers.
(17) A person soliciting exclusively the sale of telephone
answering services to be provided by that person or that person's
employer.
(18) A person soliciting a transaction regulated by the Commodity
Futures Trading Commission if the person is registered or temporarily
licensed for this activity with the Commodity Futures Trading
Commission under the Commodity Exchange Act (7 U.S.C. Sec. 1 et
seq.), and the registration or license has not expired or been
suspended or revoked.
(19) A person who sells coins or bullion at a price which is not
more than 25 percent more than the price at which the seller is
concurrently buying the same coins or bullion, if: (A) the seller has
had a retail location in California from which he or she has been
selling coins or bullion to the public in person for at least three
years; (B) the telephonic solicitations are not the person's primary
business and sales made telephonically make up less than 20 percent
of the person's total retail sales; and (C) the person claiming an
exemption pursuant to this subdivision complies with Section 17511.3,
as applicable, and subdivision (p) of Section 17511.4.
(20) A person licensed pursuant to Chapter 14 (commencing with
Section 1800) of Division 1 of the Financial Code to receive money
for transmittal to foreign countries if the license has not expired
or been suspended or revoked.
(21) A person licensed as a residential mortgage lender or
servicer pursuant to Division 20 (commencing with Section 50000) of
the Financial Code, when acting under the authority of that license.
(22) A corporation that meets all of the following conditions:
(A) It has been exempt from taxation under Section 23701e of the
Revenue and Taxation Code for a minimum of 10 years.
(B) It has maintained its principal purpose for a minimum of 10
years.
(C) It has been incorporated in the state for a minimum of 25
years.
(f) In any civil proceeding alleging a violation of this article,
the burden of proving an exemption or an exception from a definition
is upon the person claiming it, and in any criminal proceeding
alleging a violation of this article, the burden of producing
evidence to support a defense based upon an exemption or an exception
from a definition is upon the person claiming it.
(g) Compliance with this article does not satisfy nor substitute
for any requirements for license, registration, or regulation
mandated by other laws.
17511.2. As used in this article, the following terms have the
following meanings:
(a) "Department" means the Department of Justice.
(b) "Item" means any goods and services, and includes coupon books
which are to be used with businesses other than the seller's
business.
(c) "Owner" means a person who owns or controls 10 percent or more
of the equity of, or otherwise has claim to 10 percent or more of
the net income of, a telephonic seller.
(d) "Person" includes an individual, firm, association,
corporation, partnership, joint venture, or any other business
entity.
(e) "Principal" means an owner, an executive officer of a
corporation, a general partner of a partnership, a sole proprietor of
a sole proprietorship, a trustee of a trust, or any other individual
with similar supervisory functions with respect to any person.
(f) "Purchaser" or "prospective purchaser" means a person who is
solicited to become or does become obligated to a telephonic seller.
(g) "Salesperson" means any individual employed, appointed or
authorized by a telephonic seller, whether referred to by the
telephonic seller as an agent, representative, or independent
contractor, who attempts to solicit or solicits a sale on behalf of
the telephonic seller. The principals of a seller are themselves
salespersons if they solicit sales on behalf of the telephonic
seller.
17511.3. (a) Not less than 10 days prior to doing business in this
state, a telephonic seller shall register with the department by
filing with the Consumer Law Section of the department the
information required by Section 17511.4 and a filing fee of fifty
dollars ($50). A seller shall be deemed to do business in this state
if the seller solicits prospective purchasers from locations in this
state or solicits prospective purchasers who are located in this
state.
A person claiming an exemption pursuant to paragraph (19) of
subdivision (d) of Section 17511.1 shall file with the Consumer Law
Section of the department, in lieu of the information required by
subdivisions (a) to (o), inclusive, of Section 17511. 4, the
information required by subdivision (p) of Section 17511.4 and a
filing fee of fifty dollars ($50).
The information required by Section 17511.4 shall be submitted on
a form provided by the Attorney General and shall be verified by a
declaration signed by each principal of the telephonic seller under
penalty of perjury. The declaration shall specify the date and
location of signing. Information submitted pursuant to subdivision
(j) or (k) of Section 17511.4 shall be clearly identified and
appended to the filing. The information submitted pursuant to Section
17511.4 shall become part of the investigatory records and
intelligence information compiled by the department for law
enforcement purposes.
(b) Registration of a telephonic seller shall be valid for one
year from the effective date thereof and may be annually renewed by
making the filing required by Section 17511.4 and paying a filing fee
of fifty dollars ($50).
(c) Whenever, prior to expiration of a seller's annual
registration, there is a material change in the information required
by Section 17511.4, the seller shall, within 10 days, file an
addendum updating the information with the Consumer Law Section of
the department. However, changes in salespersons soliciting on behalf
of a seller shall be updated by addendums filed, if necessary, in
quarterly intervals computed from the effective date of registration.
The addendum shall provide the required information for all
salespersons who are currently soliciting or have solicited on behalf
of the seller at any time during the period between the filing of
the registration, or the last addendum, and the current addendum, and
shall include salespersons no longer soliciting for the seller as of
the date of the filing of the current addendum.
(d) Upon receipt of a filing and filing fee pursuant to
subdivision (a) or (b), the department shall send the telephonic
seller a written confirmation of receipt of the filing. If the seller
has more than one business location, the written confirmation shall
be sent to the principal business location identified in the seller's
filing in sufficient number so that the seller has receipt of
filing, within 10 days of receipt thereof, in a conspicuous place at
each of the seller's business locations and shall have available for
inspection by any governmental agency at each location a copy of the
entire registration statement which has been filed with the
department. Until confirmation of receipt of filing is received and
posted, the seller shall post in a conspicuous place at each of the
seller's business locations within this state a copy of the first
page of the registration form sent to the department. The seller
shall also post in close proximity to either the confirmation of
receipt of filing, or until the confirmation is received, the first
page of the submitted registration form, the name of the individual
or individuals in charge of each location from which the seller does
business in this state, as defined in subdivision (a).
17511.4. Each filing pursuant to Section 17511.3 shall contain the
following information:
(a) The name or names of the seller, including the name under
which the seller is doing or intends to do business, if different
from the name of the seller, and the name of any parent or affiliated
organization (1) that will engage in business transactions with
purchasers relating to sales solicited by the seller or (2) that
accepts responsibility for statements made by, or acts of, the seller
relating to sales solicited by the seller.
(b) The seller's business form and place of organization and, if
the seller is a corporation, a copy of its articles of incorporation
and bylaws and amendments thereto, or, if a partnership, a copy of
the partnership agreement, or if operating under a fictitious
business name, the location where the fictitious name has been
registered. All the same information shall be included for any parent
or affiliated organization disclosed pursuant to subdivision (a).
(c) The complete street address or addresses of all locations,
designating the principal location from which the telephonic seller
will be conducting business. If the principal business location of
the seller is not in this state, then the seller shall also designate
which of its locations within this state is its main location in the
state.
(d) A listing of all telephone numbers to be used by the seller
and the address where each telephone using each of these telephone
numbers is located.
(e) The name of, and the office held by, the seller's officers,
directors, trustees, general and limited partners, sole proprietor,
and owners, as the case may be, and the names of those persons who
have management responsibilities in connection with the seller's
business activities.
(f) The complete address of the principal residence, the date of
birth, and the driver's license number and state of issuance of each
of the persons whose names are disclosed pursuant to subdivision (e).
(g) The name and principal residence address of each person the
telephonic seller leaves in charge at each location from which the
seller does business in this state, as defined in subdivision (a) of
Section 17511.3, and the business location which each of these
persons is or will be in charge of.
(h) A statement, meeting the requirements of this subdivision, as
to both the seller, whether a corporation, partnership, firm,
association, joint venture, or any other type of business entity (and
whether identified pursuant to subdivision (e) or (g) or not), and
as to any person identified pursuant to subdivision (e) or (g) who:
(1) Has been convicted of a felony or misdemeanor involving an
alleged violation of this article, or fraud, theft, embezzlement,
fraudulent conversion, or misappropriation of property. For purposes
of this paragraph, a plea of nolo contendere is a conviction.
(2) Has had entered against him or her a final judgment or order
in a civil or administrative action, including a stipulated judgment
or order, if the complaint or petition in the civil or administrative
action alleged acts constituting a violation of this article, fraud,
theft, embezzlement, fraudulent conversion, or misappropriation of
property, the use of untrue or misleading representations in an
attempt to sell or dispose of real or personal property, or the use
of unfair, unlawful, or deceptive business practices.
(3) Is subject to any currently effective injunction or
restrictive court order relating to business activity as the result
of an action brought by a federal, state, or local public agency or
unit thereof, including, but not limited to, an action affecting any
vocational license.
(4) Has at any time during the previous seven tax years been the
subject of an order for relief in bankruptcy, been reorganized due to
insolvency, or been a principal, director, officer, trustee, general
or limited partner, or had management responsibilities of any other
corporation, partnership, joint venture, or business entity, that has
been the subject of an order for relief in bankruptcy during or
within one year after the period that the person held that position.
For purposes of paragraphs (1), (2), and (3), the statement
required by this subdivision shall identify the seller or person, the
court or administrative agency rendering the conviction, judgment,
or order, the docket number of the matter, the date of the
conviction, judgment, or order, and the name of the governmental
agency, if any, that brought the action resulting in the conviction,
judgment, or order. For purposes of paragraph (4), the statement
required by this subdivision shall include the name and location of
the seller or person that has been the subject of an order for relief
in bankruptcy, or reorganized due to insolvency, and shall include
the date thereof, the court which exercised jurisdiction, and the
docket number of the matter.
(i) A list of the names, principal residence addresses, the date
of birth, and the driver's license number and state of issuance
thereof, of salespersons who solicit on behalf of the telephonic
seller and the names the salespersons use while so soliciting. No
salesperson shall use the same name as used by any other salesperson
soliciting for the telephonic seller and no telephonic seller shall
permit a salesperson to use the same name as used by any other
salesperson soliciting for the telephonic seller.
(j) A description of the items the seller is offering for sale and
a copy of all sales scripts the telephonic seller requires
salespersons to use when soliciting prospective purchasers, or if no
sales script is required to be used, a statement to that effect.
(k) A copy of all sales information and literature (including, but
not limited to, scripts, outlines, instructions, and information
regarding how to conduct telephonic sales, sample introductions,
sample closings, product information, and contest or premium-award
information) provided by the telephonic seller to salespersons or of
which the seller informs salespersons, and a copy of all written
materials the seller sends to any prospective or actual purchaser.
(l) If the telephonic seller represents or implies, or directs
salespersons to represent or imply, to purchasers that the purchaser
will receive certain specific items (including a certificate of any
type which the purchaser must redeem to obtain the item described in
the certificate) or one or more items from among designated items,
whether the items are denominated as gifts, premiums, bonuses,
prizes, or otherwise, the filing shall include the following:
(1) A list of the items offered.
(2) The value or worth of each item described to prospective
purchasers and the basis for the valuation.
(3) The price paid by the telephonic seller to its supplier for
each of these items and the name, address, and telephone number of
each item's supplier.
(4) If the purchaser is to receive fewer than all of the items
described by the seller, the filing shall include the following:
(A) The manner in which the telephonic seller decides which item
or items a particular prospective purchaser is to receive.
(B) The odds a single prospective purchaser has of receiving each
described item.
(C) The name and address of each recipient who has, during the
preceding 12 months (or if the seller has not been in business that
long, during the period the telephonic seller has been in business)
received the item having the greatest value and the item with the
smallest odds of being received.
(5) All rules, regulations, terms, and conditions a prospective
purchaser must meet in order to receive the item.
(m) If the telephonic seller is offering to sell any metal, stone,
or mineral, the filing shall include the following:
(1) The name, address, and telephone number of each of the seller'
s suppliers and a description of each metal, stone, or mineral
provided by the supplier.
(2) If possession of any metal, stone, or mineral is to be
retained by the seller or will not be transferred to the purchaser
until the purchaser has paid in full, the filing shall include the
following:
(A) The address of each location where the metal, stone, or
mineral will be kept.
(B) If not kept on premises owned by the seller or at an address
or addresses set forth in compliance with subdivision (c), the name
of the owner of the business at which the metal, stone, or mineral
will be kept.
(C) A copy of any contract or other document which evidences the
seller's right to store the metal, stone, or mineral at the address
or addresses designated pursuant to subparagraph (A).
(3) If the seller is not selling the metal, stone, or mineral from
its own inventory, but instead purchases the metal, stone, or
mineral to fill orders taken from purchasers, the filing shall
include copies of all contracts or other documents evidencing the
seller's ability to call upon suppliers to fill the seller's orders.
(4) If the seller represents to purchasers that the seller has
insurance or a surety bond of any type relating to a purchaser's
purchase of any metal, stone, or mineral from the seller, the filing
shall include a complete copy of all these insurance policies and
bonds.
(5) If the seller makes any representation as to the earning or
profit potential of purchases of any metal, stone, or mineral, the
filing shall include data to substantiate the claims made. If the
representation relates to previous sales made by the seller or a
related entity, substantiating data shall be based on the experiences
of at least 50 percent of the persons who have purchased the
particular metal, stone, or mineral from the seller or related entity
during the preceding six months (or if the seller or related entity
has not been in business that long, during the period the seller or
related entity has been in business) and shall include the raw data
upon which the representation is based, including, but not limited
to, all of the following:
(A) The length of time the seller or related entity has been
selling the particular metal, stone, or mineral being offered.
(B) The number of purchasers thereof from the seller or related
entity known to the seller or related entity to have made at least
the same earnings or profit as those represented.
(C) The percentage that the number disclosed pursuant to
subparagraph (B) represents of the total number of purchasers from
the seller or related entity of the particular metal, stone, or
mineral.
(n) If the telephonic seller is offering to sell an interest in
oil, gas, or mineral fields, wells, or exploration sites, the filing
shall include disclosure of the following:
(1) The seller's ownership interest, if any, in each field, well,
or site being offered for sale.
(2) The total number of interests to be sold in each field, well,
or site being offered for sale.
(3) If, in selling an interest in any particular field, well, or
site, reference is made to an investigation of these fields, wells,
or sites by the seller or anyone else, the filing shall include the
following:
(A) The name, business address, telephone number, and professional
credentials of the person or persons who made the investigation.
(B) A copy of the report and other documents relating to the
investigation prepared by the person or persons.
(4) If the seller makes any representation as to the earning or
profit potential of purchases of any interest in these fields, wells,
or sites, the filing shall include data to substantiate the claims
made. If the representation relates to previous sales made by the
seller or a related entity, the substantiating data shall be based on
the experiences of at least 50 percent of the purchasers of the
particular interests from the seller or the related entity during the
preceding six months (or if the seller has not been in business that
long, during the period the seller or related entity has been in
business) and shall include the raw data upon which the
representation is based, including, but not limited to, all of the
following:
(A) The length of time the seller or related entity has been
selling the particular interests in the fields, wells, or sites being
offered.
(B) The number of purchasers of the particular interests from the
seller or related entity known to the seller to have made, at least
the same earnings as those represented.
(C) The percentage the number disclosed pursuant to subparagraph
(B) represents of the total number of purchasers of the particular
interests from the seller or related entity.
(o) The name and address of the telephonic seller's agent in this
state, other than the Attorney General, authorized to receive service
of process in this state.
(p) If a person, based on paragraph (19) of subdivision (c) of
Section 17511.1, claims an exemption from having to file the
information required by subdivisions (a) to (o), inclusive, the
person shall file, on a form provided by the Attorney General, the
following information:
(1) The name or names of the person claiming the exemption,
including the name under which the person is doing or intends to do
business.
(2) The person's business form, and place of organization, whether
corporate or otherwise; or, if operating under a fictitious business
name, the location where the fictitious name has been registered.
(3) The complete street address of the person's retail locations,
and telephone numbers located therein and a statement as to how long
the person has been selling at retail from each location.
(4) A copy of the person's currently valid business license.
(5) A statement reflecting the dollar amount of the person's total
retail sales during the 12 months preceding the filing.
(6) A statement reflecting the dollar amount of the person's sales
made telephonically during the 12 months preceding the filing.
The filing shall be verified by a declaration signed under penalty
of perjury by each principal of the person claiming the exemption.
The declaration shall specify the date and location of signing.
If a person filing pursuant to subdivision (p) makes any
representation to a prospective purchaser as to the historical
movements or changes in the price or value of any coin or bullion,
the person shall maintain in its records sufficient data to
substantiate each representation. This data shall be retained in the
person's records for a period of at least three years after the last
date on which a representation is made and shall be made available
for inspection upon request by any governmental agency at each of its
business locations.
(q) If the telephonic seller represents or implies, or directs
salespersons to represent or imply, that the telephonic seller can,
or may be able to, make a loan or arrange or assist in arranging a
loan or to assist in providing information which may lead to the
obtaining of a loan, the filing shall include the following:
(1) The names and addresses of all persons who, in the previous 24
months, lent money to those who responded to the seller's
solicitations or lent money to the telephonic seller for the seller
to lend to those who responded to the seller's representations that
it could make a loan or arrange or assist in arranging a loan or
could assist in providing information which could lead to the
obtaining of a loan.
(2) The names and addresses of all persons who, in the previous 24
months, lent money to those who responded to the solicitations of
the seller's predecessor or the seller's officers, owners, or those
persons having present management responsibilities or to companies
with which they were associated, that they could make a loan or
arrange or assist in arranging a loan or could assist in providing
information which could lead to the obtaining of a loan or lent money
to the seller's predecessor or the seller's officers, owners, or
those persons having present management responsibilities or to
companies with which they were associated for them to lend to those
who responded to these representations.
(3) The names and addresses of all persons who have informed the
telephonic seller that they may be able to lend money, within the
next 12 months from the date of this registration, to persons
solicited by the seller or to the telephonic seller for the seller to
lend to those who respond to the seller's representations that it
can make a loan or arrange or assist in arranging a loan or can
assist in providing information which can lead to the obtaining of a
loan.
(4) Copies of all contracts between the seller and lenders or
prospective lenders who may lend money: (A) to the seller to lend to
individuals who, in connection with the seller's business activities,
respond to the seller's representations that it can make a loan or
arrange or assist in arranging a loan or can assist in providing
information which can lead to the obtaining of a loan; or (B)
directly to persons to whom the seller may represent that it can
arrange or assist in providing information which can lead to the
obtaining of a loan.
17511.5. In addition to complying with the requirements of Section
17500.3, as applicable, a telephonic seller, shall, at the time the
solicitation is made and prior to consummation of a sales
transaction, provide all of the following information to a
prospective purchaser:
(a) If the telephonic seller represents or implies that a
prospective purchaser will receive, without charge therefor, certain
specific items or one item from among designated items, whether the
items are denominated as gifts, premiums, bonuses, prizes, or
otherwise, the seller shall provide the following:
(1) The information required to be filed by subparagraphs (A) and
(B) of paragraph (4) of, and paragraph (5) of, subdivision (l) of
Section 17511.4. In addition, each time the telephonic seller makes
reference to an item or items, the telephonic seller shall state that
no purchase is necessary, and that the purchase of goods will have
no greater chance of receiving the more valuable item or items than
the person who does not purchase. The seller shall state, in a manner
enabling a consumer to copy the information, the method, including
the telephonic seller's address, for obtaining without purchase the
item or items or for a chance to obtain the item or items. The
provisions of Section 17537.2 of the Business and Professions Code
shall apply to all offers.
(2) The complete street address of the location from which the
salesperson is calling the prospective purchaser and, if different,
the complete street address of the telephonic seller's principal
location.
(3) The total number of individuals who have actually received
from the telephonic seller, during the preceding 12 months (or if the
seller has not been in business that long, during the period the
telephonic seller has been in business), the item having the greatest
value and the item with the smallest odds of being received.
(b) If the telephonic seller is offering to sell any metal, stone,
or mineral, the seller shall provide the following information:
(1) The complete street address of the location from which the
salesperson is calling the prospective purchaser and, if different,
the complete street address of the telephonic seller's principal
location.
(2) When required to be filed pursuant to Section 17511.4, the
information specified in subparagraphs (A) and (B) of paragraph (2)
of, and paragraph (5) of, subdivision (m) of Section 17511.4.
(c) If the telephonic seller is offering to sell an interest in
oil, gas, or mineral fields, wells, or exploration sites the seller
shall provide the following information:
(1) The complete street address of the location from which the
salesperson is calling the prospective purchaser and, if different,
the complete street address of the telephonic seller's principal
location.
(2) The information required to be filed by paragraphs (1), (2),
and (4) of, and subparagraph (A) of paragraph (3) of, subdivision (n)
of Section 17511.4.
(d) If the telephonic seller represents that office equipment or
supplies being offered are offered at prices which are below those
usually charged for these items, the seller shall provide the
following information:
(1) The complete street address of the location from which the
salesperson is calling the prospective purchaser and, if different,
the complete street address of the telephonic seller's principal
location.
(2) The name of the manufacturer of each of the items the
telephonic seller has represented for sale and in which the
prospective purchaser expresses interest.
(e) If the solicitation is a "home solicitation contract or offer"
within the meaning of Section 1689.5 of the Civil Code, the seller
shall comply with the following:
(1) At the time the solicitation is made, the telephonic seller
shall inform the buyer orally of the following:
(A) The buyer has the right to cancel the contract or offer until
midnight of the third business day after the day on which the buyer
receives the product or products ordered or the notice of
confirmation of services ordered. This right of cancellation begins
to run from the date of the buyer's receipt of the product or
products ordered or, in the case of services ordered, from the buyer'
s receipt of the notice of confirmation of services ordered.
(B) A written notice of cancellation will be sent with the product
or products ordered or, in the case of services, the notice of
cancellation shall accompany a notice of confirmation that shall be
sent to the purchaser immediately following the telephonic agreement
to purchase those services.
(2) The telephonic seller shall provide the buyer with a written
notice of cancellation that shall accompany and be attached to any
product or products sent to the purchaser in response to a telephone
solicitation or, in the case of services, shall accompany a notice of
confirmation of the agreement to purchase services. The notice of
cancellation shall be in duplicate, captioned "Notice of Buyer's
Right of Cancellation," which shall be separate from or easily
detachable from any agreement or offer to purchase which accompanies
the product or products or notice of confirmation, and shall contain,
in type of at least 10-point, the following cancellation statement,
and no other information or statement, written in the same language
used in the telephone solicitation:
"NOTICE OF BUYER'S RIGHT OF CANCELLATION"
You may cancel this transaction, without any penalty or
obligation, within three business days following your receipt of this
notice of cancellation and the receipt of any products, or in the
case of services, within three business days following receipt of the
attached notice of confirmation.
If you cancel, any payments made by you or authorized by you,
pursuant to any telephonic solicitation and purchase agreement shall
be returned to you within 10 days following receipt by the seller of
your cancellation notice.
If you cancel, you must make available to the seller at your
residence, in substantially as good condition as when received, any
goods delivered to you under this contract, agreement, or sale, or
you may, if you wish, comply with the instructions of the seller
regarding the return shipment of the goods at the seller's expense
and risk.
If you do make the goods available to the seller and the seller
does not pick them up within 20 days of the date of your notice of
cancellation, you may retain or dispose of the goods without any
further obligation. If you fail to make the goods available to the
seller, or if you agree to return the goods to the seller and fail to
do so, then you remain liable for the performance of all obligations
under the contract.
To cancel this transaction, mail or deliver a signed and dated
copy of this cancellation notice, or any other written notice, or
send a telegram to __________ (name of seller), at ________
(address of seller's place of business) not later than midnight of
the third business day after receipt of the products and this notice
of cancellation.
I HEREBY CANCEL THIS TRANSACTION.
______
DATE
___________________
BUYER'S SIGNATURE
17511.6. Every telephonic seller shall file with the Attorney
General, in the form prescribed by the Attorney General, an
irrevocable consent appointing the Attorney General to act as the
seller's attorney to receive service of any lawful process in any
noncriminal suit, action, or proceeding against the seller or the
seller's successor, executor, or administrator, which may arise under
this article, when the agent designated pursuant to subdivision (o)
of Section 17511.4 has resigned and has not been replaced or if the
agent so designated cannot with reasonable diligence be found at the
address designated pursuant to subdivision (o) of Section 17511.4 or
if no agent has been designated pursuant thereto. When service is
made upon the Attorney General in conformance with this section, it
shall have the same force and validity as if served personally on the
seller. Service may be made by leaving a copy of the process in the
office of the Attorney General, but it shall not be effective unless
both of the following are done:
(a) When service is effected pursuant to this section, the
plaintiff shall forthwith send by first-class mail a notice of the
service and a copy of the process to the defendant or respondent at
the last address on file with the department.
(b) The plaintiff's affidavit of compliance with this section
shall be filed in the case on or before the return date of the
process, if any, or within such further time as the court allows.
17511.7. No seller shall make or authorize the making of any
references to its compliance with this article to any prospective or
actual purchaser.
17511.8. No salesperson shall solicit prospective purchasers on
behalf of a telephonic seller who is not currently registered with
the department pursuant to this article. Any salesperson who violates
this section is guilty of a misdemeanor punishable by imprisonment
in the county jail for not more than six months, by a fine not
exceeding two thousand five hundred dollars ($2,500), or by both that
fine and imprisonment.
17511.9. Except as provided in Section 17511.8, any person,
including, but not limited to, the seller, a salesperson, agent or
representative of the seller, or an independent contractor, who
willfully violates any provision of this article or who directly or
indirectly employs any device, scheme, or artifice to deceive in
connection with the offer or sale by any telephonic seller, or who
willfully, directly, or indirectly, engages in any act, practice, or
course of business which operates or would operate as a fraud or
deceit upon any person in connection with a sale by any telephonic
seller shall, upon conviction, be punished as follows:
(a) By a fine not exceeding ten thousand dollars ($10,000) for
each unlawful transaction.
(b) By imprisonment in the state prison, or by imprisonment in the
county jail for not more than one year.
(c) By both the fine and imprisonment specified in subdivisions
(a) and (b).
17511.10. The provisions of this article are not exclusive. The
remedies specified in this article for violation of any section of
this article or for conduct proscribed by any section of this article
shall be in addition to any other procedures or remedies for any
violation or conduct provided for in any other law.
Nothing in this article shall limit any other statutory or any
common law rights of the Attorney General, any district attorney or
city attorney, or any other person. If any act or practice proscribed
by this article is also the basis for a cause of action in common
law or a violation of another statute, the purchaser may assert the
common law or statutory cause of action under the procedures and with
the remedies applicable thereto.
17511.12. (a) Every telephonic seller shall maintain a bond issued
by a surety company admitted to do business in this state. The bond
shall be in the amount of one hundred thousand dollars ($100,000) in
favor of the State of California for the benefit of any person
suffering pecuniary loss in a transaction commenced during the period
of bond coverage with a telephonic seller who violated this chapter.
The bond shall include coverage for the payment of the portion of
any judgment, including a judgment entered pursuant to Section 17203
or 17535, that provides for restitution to any person suffering
pecuniary loss, notwithstanding whether the surety is joined or
served in the action or proceeding. A copy of the bond shall be filed
with the Consumer Law Section of the Department of Justice. This
bond may not be required of any cable television operator franchised
or licensed pursuant to Section 53066 of the Government Code.
(b) (1) At least 10 days prior to the inception of any promotion
offering a premium with an actual market value or advertised value of
five hundred dollars ($500) or more, the telephonic seller shall
notify the Attorney General in writing of the details of the
promotion, describing the premium, its current market value, the
value at which it is advertised or held out to the customer, and the
date the premium shall be awarded. All premiums offered shall be
awarded. The telephonic seller shall maintain an additional bond for
the total current market value or advertised value, whichever is
greater, of the premiums held out or advertised to be available to a
purchaser or recipient. A copy of the bond shall be filed with the
Consumer Law Section of the Department of Justice. The bond shall be
for the benefit of any person entitled to the premium who did not
receive it within 30 days of the date disclosed to the Attorney
General as the date on which the premium would be awarded. The amount
paid to a person under a bond required by this subdivision may not
exceed the greater of the current market value or advertised or
represented value of the premium offered to that person. The bond
shall include coverage for the payment of any judgment, including a
judgment entered pursuant to Section 17203 or 17535, that provides
for payment of the value of premiums that were not timely awarded,
notwithstanding whether the surety is joined or served in the action
or proceeding. The bond shall also provide for payment upon motion by
the Attorney General pursuant to subdivision (d) in the event the
seller fails to provide the Attorney General with proof of the award
of premiums as required in paragraph (2).
(2) Within 45 days after the date disclosed to the Attorney
General for the award of premiums, the seller shall provide to the
Attorney General proof that all premiums were awarded. The proof
shall include the names, addresses, and telephone numbers of the
recipients of the premiums and the date or dates on which the
premiums were awarded. The bond shall be maintained until the seller
files proof with the Attorney General as required by this subdivision
or until payment of the amount of the bond is ordered pursuant to
subdivision (d).
(c) (1) In addition to any other means for the enforcement of the
surety's liability on a bond required by this section, the surety's
liability on the bond may be enforced by motion, as provided in this
subdivision, after a judgment has been obtained against the seller.
(2) The Attorney General, district attorney, city attorney, or any
other person who obtained a judgment for restitution against the
seller, as described in subdivision (a), may file a motion in the
court that entered the judgment to enforce liability on the bond
without first attempting to enforce the judgment against any party
liable under the judgment.
(3) The notice of motion, the motion, and a copy for the judgment
shall be served on the surety as provided in Chapter 5 (commencing
with Section 1010) of Title 14 of Part 2 of the Code of Civil
Procedure. The notice shall set forth the amount of the claim and a
brief statement indicating that the claim is covered by the bond.
Service shall also be made on the Consumer Law Section of the
Department of Justice.
(4) The court shall grant the motion unless the surety establishes
that the claim is not covered by the bond, or the court sustains an
objection made by the Attorney General that the grant of the motion
might impair the rights of actual or potential claimants or is not in
the public interest.
(d) (1) In addition to any other means for the enforcement of the
surety's liability on a bond required by subdivision (b), the surety'
s liability on the bond may be enforced by motion as provided in this
subdivision.
(2) The Attorney General, district attorney, city attorney, or any
person who claims the premium, may file a motion in the superior
court of the county from which the seller made an offer of a premium,
in which the seller maintains any office or place of business, or in
which an offeree of the premium resides, or in any other court of
competent jurisdiction. The motion shall set forth the nature of the
seller's offer, the greater of the current market value or advertised
or represented value of the premium, the date by which the premium
should have been awarded, and the fact that the premium was not
awarded as represented.
(3) The notice of motion and motion shall be served on the surety
as provided in Chapter 5 (commencing with Section 1010) of Title 14
of Part 2 of the Code of Civil Procedure.
(4) The court shall grant the motion unless the surety establishes
that the claim is untrue or is not covered by the bond.
(5) The Attorney General may file a motion in the superior court
of the county from which the seller made an offer of a premium, or in
which an offeree of a premium resides, or in any other court of
competent jurisdiction, for the payment of the entire bond if the
seller fails to file proof with the Attorney General of the award of
all premiums as required by paragraph (2) of subdivision (b). The
notice of motion and motion shall be served as provided in Chapter 5
(commencing with Section 1010) of Title 14 of Part 2 of the Code of
Civil Procedure. The motion shall be granted if the Attorney General
establishes that the seller failed to file proof of making the timely
award of all premiums. The recovery on the bond shall be distributed
pro rata to the promised recipients of the premiums to the extent
their identity is actually known to the Attorney General at the time
payment is made by the surety. The balance of the recovery shall be
paid to any judicially established consumer protection trust fund
designated by the Attorney General or as directed by the court under
the cy pres doctrine.
(e) No stay of a motion filed pursuant to this section may be
granted pending the determination of conflicting claims among
beneficiaries. An order enforcing liability on a bond may be enforced
in the same manner as a money judgment pursuant to Title 9
(commencing with Section 680.010) of Part 2 of the Code of Civil
Procedure. Nothing herein affects the rights of the surety against
the principal.
(f) The surety is not liable on the bond for payment of a judgment
against a seller for any violation of this chapter unless the action
or proceeding is filed within two years after the cancellation or
termination of the bond, the termination of the seller's
registration, or the seller's cessation of business, whichever is
later.
(g) The surety is not liable on a motion made pursuant to
subdivision (d) unless the motion is filed within two years of the
date on which the seller represented the premium was to have been
awarded.
(h) For the purpose of this section, "judgment" includes a final
order in a proceeding for the termination of telephone service
pursuant to Public Utilities Commission Tariff Rule 31.
(i) Chapter 2 (commencing with Section 995.010) of Title 14 of
Part 2 of the Code of Civil Procedure shall apply to the enforcement
of a bond given pursuant to this section except to the extent of any
inconsistency with this section, in which event this section shall
apply.
17512. (a) It shall be unlawful for any person to request or
receive payment of any fee or consideration from a person for goods
or services represented to recover or otherwise assist in the return
of money or any other item of value paid for by, or promised to, that
person in a previous telemarketing transaction, until seven business
days after that money or other item is delivered to that person.
(b) This section shall not apply to an attorney licensed to
practice law in this state and specifically retained for the recovery
of money or any other item of value.
(c) Notwithstanding Section 17511.9, any person who violates
subdivision (a) shall be guilty of a misdemeanor, and shall be
punished by imprisonment in a county jail for up to one year.
17513. (a) It shall be unlawful for any telephonic seller to
procure, either directly or through an agent, the services of any
third-party delivery, courier, or other pickup service, for the
purpose of obtaining a purchaser's payment for goods sold by the
telephonic seller, unless the goods are delivered before or at the
same time the purchaser's payment is obtained.
(b) Notwithstanding Section 17511.9, any person who violates
subdivision (a) shall be guilty of a misdemeanor, and shall be
punished by imprisonment in a county jail for up to one year.
17514. (a) A person who sends a solicitation by mail that solicits
a recipient to consent to receive information via telephone, where
that recipient's telephone number is not listed on the national "do
not call" registry established and maintained by the Federal Trade
Commission, as described in Section 310.4(b)(1)(iii)(B) of Title 16
of the Code of Federal Regulations, shall include in the solicitation
a clear and conspicuous disclosure of the following information:
(1) Identification of the name of the sender of the mailing and of
the entity that is requesting permission to call.
(2) The telephone number to which calls are to be placed.
(3) Notice that the recipient may be contacted by a telephone
solicitor.
(b) A violation of this section shall not be a crime,
notwithstanding Section 17534. However, all available civil remedies
that are applicable to a violation of this section may be employed.