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Reader Participation Post: Send link to this post to your Legislators

Pretty covers, but lacks a lot in the way of consumer protections. Image via Wikipedia

Sometimes I emerge from LOVESalem HQ and head over to Legal Aid to volunteer in the ELVIS program (Elder Law Volunteers in Service . . . cute, no?). And one thing I've learned as a result is that Oregon has really, really, really weak consumer protection laws, and very few chances for a regular person to hold their own against the corporate bullies.

One of the worst scams I've seen is people who fall for the "teaser" rates offered in service contracts --- such as for cell phones, home alarm systems, gym memberships, etc. The way the scam works is that smiling, blow-dried young person gets unsophisticated older person to sign on the dotted line by hiding the total cost of the package. Nowhere is the mark (the sucker) ever told what they're actually going to pay each month and they are never, ever told how much they'll have to pay in total to avoid the harsh penalties for trying to wriggle off the hook once it's been set.

Thus, a proposal: A new section in the Oregon Revised Statutes chapter on Trade Practices (ORS 646) --- a proposal to require full-cost disclosure in any consumer service contract, meaning that the seller has to actually tell you

(a) the full cost, with all taxes and fees, that you'll have to pay every month;

(b) the total you'll have to pay over time to avoid any penalty for early cancellation;

(c) the total remaining each month that you'll have to pay to avoid a penalty, and the amount of the penalty.

In other words, this is simply a straight disclosure law that would be easy for any reputable business to satisfy. Here's a first shot at the text, but that's subject to change.

YOUR PART: Send a link to this post to your state senator and representative and ask them to introduce a bill to put this statute into the books ASAP.

Here's the link! Just copy it into an email and send it to your Legislators with a short note explaining that you live in their districts and want better consumer protections for Oregonians:
http://lovesalem.blogspot.com/2010/04/reader-participation-post-send-link-to.html

Chapter 646 — Trade Practices and Antitrust Regulation

646.190 Full-Cost Disclosure on Service Contracts.

1. No consumer services contract may impose any fee, charge, or penalty (including loss of otherwise-available discount) against the buyer for early service termination unless, when the contract was signed, the offeror disclosed and the buyer acknowledged in writing a disclosure the same or substantially the same as follows, with the specific amounts included:

   “OREGON FULL-COST INITIAL DISCLOSURE: This contract includes a penalty provision for early termination of $________. The total of payments, including taxes and incidental charges required to avoid any early termination fee or penalty under this offer is $________.”

2. Every invoice under such a service contract must include updated information to advise the consumer any remaining amount owed under the contract to avoid a fee, charge, or penalty and the amount of the fee, charge, or penalty that would be imposed if the service contract was cancelled before the invoice is paid.

“OREGON FULL-COST BILLING DISCLOSURE: As of the date of this statement, the total of payments, including taxes and incidental charges, required to avoid any early termination fee or penalty under this contract is $________.” The penalty for early termination as of the date of this statement is $________.

3. Any person or entity that offers a service contract or issues an invoice on a service contract without properly and accurately disclosing the remaining total of payments needed to avoid a penalty and the amount of the penalty shall not be allowed to collect any penalties under those contracts or to retain any penalties, fees, or charges collected in violation of this section.


4. The Attorney General or any consumer who enters into a service agreement but who is not given the required Oregon full-cost disclosure or who receives an invoice without an accurate Oregon full-cost billing disclosure shall have standing to bring a civil action to recover court costs, attorney fees, and the greater of $500 or treble the amount of the penalty improperly imposed or not properly disclosed.