Senate Bill No. 108

Senate Bill No. 108-Committee on Commerce and Labor

(On Behalf of the Office of the Attorney General)

February 3, 1997
____________

Referred to Committee on Commerce and Labor

SUMMARY--Makes various changes governing deceptive trade practices and solicitations by telephone. (BDR 52-610)

FISCAL NOTE: Effect on Local Government: Yes.

Effect on the State or on Industrial Insurance: Yes.

EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.

AN ACT relating to trade practices; revising provisions governing the registration of, and the posting of security by, credit service organizations, organizations for buying goods or services at a discount, dance studios and health clubs; deleting provisions governing the confidentiality of assurances of discontinuance; prohibiting certain acts relating to solicitations by telephone; requiring persons engaged in solicitations by telephone to maintain certain records; requiring such persons operating chance promotions to submit certain information to the consumer affairs division of the department of business and industry; revising provisions governing recovery services; 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:

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Section 1 Chapter 598 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 8, inclusive, of this act.
Sec. 2 As used in sections 2 to 7, inclusive, of this act, unless the context otherwise requires:
1. "Commissioner" means the commissioner of the consumer affairs division of the department of business and industry.
2. "Division" means the consumer affairs division of the department of business and industry.
3. "Registrant" means a credit service organization, an organization for buying goods or services at a discount, a dance studio or a health club which is required to register and post security with the division pursuant to the provisions of this chapter.
Sec. 3 1. Each credit service organization, organization for buying goods or services at a discount, dance studio and health club regulated by the provisions of this chapter shall apply for registration on the form prescribed by the division.
2. At the time of application for registration, the applicant shall pay to the division an administrative fee of $25 and deposit the required security with the division.
3. Upon receipt of the security in the proper form and the payment of the administrative fee required by this section, the division shall issue a certificate of registration to the applicant. A certificate of registration is not transferable or assignable.
Sec. 4 1. Each registrant shall deposit with the division:
(a) A bond executed by a corporate surety approved by the commissioner and licensed to do business in this state;
(b) An irrevocable letter of credit for which the registrant is the obligor, issued by a bank whose deposits are federally insured; or
(c) A certificate of deposit in a federally insured financial institution doing business in this state, which may be withdrawn only on the order of the commissioner, except that the interest may accrue to the registrant.
2. The term of the bond, letter of credit or certificate of deposit, or any renewal thereof, must be not less than 1 year.
3. If the registrant deposits a bond, the registrant shall keep accurate records of the bond and the payments made on the premium. The records must be open to inspection by the division during business hours. The registrant shall notify the division not later than 30 days before the date of expiration of the bond and provide written proof of the renewal of the bond to the division.
4. The commissioner may reject any bond, letter of credit or certificate of deposit which fails to conform to the requirements of this chapter.
5. A registrant may change the form of security which he has deposited with the division. If the registrant changes the form of the security, the commissioner may retain for not more than 1 year any portion of the security previously deposited by the registrant as security for claims arising during the time the previous security was in effect.
6. If the amount of the deposited security falls below the amount required by this chapter for that security, the registrant shall be deemed not to be registered as required by section 3 of this act for the purposes of this chapter.
Sec. 5 1. The security required to be deposited by a registrant pursuant to section 4 of this act must be held in trust for consumers injured by the bankruptcy of the registrant or the registrant's breach of any agreement entered into in his capacity as a registrant.
2. A consumer so injured may bring and maintain an action in any court of competent jurisdiction to recover against the security.
3. The division may bring an action for interpleader against all claimants upon the security. If the division brings such an action, the division shall publish notice of the action at least once each week for 2 weeks in a newspaper of general circulation in the county in which the organization has its principal place of business. The division may deduct its costs of the action, including the costs of the publication of the notice, from the amount of the security. All claims against the security have equal priority. If the security is insufficient to pay all the claims in full, the claims must be paid pro rata. If the registrant has posted a bond with the division, the surety is then relieved of all liability under the bond.
4. The division may, in lieu of bringing an action for interpleader pursuant to subsection 3, conduct a hearing to determine the distribution of the security to claimants. The division shall adopt regulations to provide for adequate notice and the conduct of the hearing. If the registrant has posted a bond with the division, distribution pursuant to this subsection relieves the surety of all liability under the bond.
Sec. 6 1. If no claims have been filed against the security deposited with the division pursuant to section 4 of this act within 6 months after the registrant ceases to operate or his registration expires, whichever occurs later, the commissioner shall release the security to the registrant and shall not audit any claims filed against the security thereafter by consumers.
2. If one or more claims have been filed against the security within 6 months after the registrant ceases to operate or his registration expires, whichever occurs later, the proceeds must not be released to the registrant or distributed to any consumer earlier than 1 year after the registrant ceases to operate or his registration expires, whichever occurs later.
3. For the purposes of this section, the commissioner shall determine the date on which a registrant ceases to operate.
Sec. 7 1. The advertising of services or the conducting of business by a credit service organization, an organization for buying goods or services at a discount, a dance studio or a health club without first registering pursuant to section 3 of this act and posting security with the division pursuant to section 4 of this act constitutes a deceptive trade practice for the purposes of NRS 598.0903 to 598.0999, inclusive.
2. The remedies, duties and prohibitions of sections 2 to 7, inclusive, of this act are not exclusive and are in addition to any other remedies provided by law.
Sec. 8 Before advertising its services or conducting business in this state, an organization for buying goods or services at a discount must register pursuant to section 3 of this act and post security in the amount of $50,000 with the division pursuant to section 4 of this act. The security must be conditioned on compliance by the organization with the provisions of NRS 598.840 to 598.930, inclusive, and this section, and the terms of the contract with the buyer.
Sec. 9 NRS 598.0967 is hereby amended to read as follows:
598.0967 1. The commissioner and the director, in addition to other powers conferred upon them by NRS 598.0903 to 598.0999, inclusive, may issue subpoenas to require the attendance of witnesses or the production of documents, conduct hearings in aid of any investigation or inquiry and prescribe such forms and adopt such regulations as may be necessary to administer the provisions of NRS 598.0903 to 598.0999, inclusive. Such regulations may include, without limitation, provisions concerning the applicability of the provisions of NRS 598.0903 to 598.0999, inclusive, to particular persons or circumstances.
2. [Service of any notice or subpoena must be made as provided in N.R.C.P. 45(c).] A notice or subpoena must be served upon the person in the manner required for service of process in this state or by certified mail with return receipt requested. An employee of the consumer affairs division may personally serve the notice or subpoena.
Sec. 10 NRS 598.0971 is hereby amended to read as follows:
598.0971 1. If, after an investigation, the commissioner has reasonable cause to believe that any person has been engaged or is engaging in any deceptive trade practice in violation of NRS 598.0903 to 598.0999, inclusive, the commissioner may issue an order directed to the person to show cause why the commissioner should not order the person to cease and desist from engaging in the practice. The order must contain a statement of the charges and a notice of a hearing to be held thereon. The order must be served upon the person directly or by certified or registered mail, return receipt requested.
2. If, after conducting a hearing pursuant to the provisions of subsection 1, the commissioner determines that the person has violated any of the provisions of NRS 598.0903 to 598.0999, inclusive, or if the person fails to appear for the hearing after being properly served with the statement of charges and notice of hearing, the commissioner may make a written report of his findings of fact concerning the violation and cause to be served a copy thereof upon the person and any intervener at the hearing. If the commissioner determines in the report that such a violation has occurred, he may order the violator to:
(a) Cease and desist from engaging in the practice or other activity constituting the violation;
(b) Pay the costs of reporting services, fees for experts and other witnesses, charges for the rental of a hearing room if such a room is not available to the commissioner free of charge, charges for providing an independent hearing officer, if any, and charges incurred for any service of process, if the violator is adjudicated to have committed a violation of NRS 598.0903 to 598.0999, inclusive; [and]
(c) Provide restitution for any money or property improperly received or obtained as a result of the violation [.] ;
(d) Pay the costs incurred by the division for the investigation; and
(e) Except as otherwise provided in NRS 598.0973, pay an administrative fine of not more than $2,500 for each violation.
The order must be served upon the person directly or by certified or registered mail, return receipt requested. The order becomes effective upon service in the manner provided in this subsection.
3. Any person whose pecuniary interests are directly and immediately affected by an order issued pursuant to subsection 2 or who is aggrieved by the order may petition for judicial review in the manner provided in chapter 233B of NRS. Such a petition must be filed within 30 days after the service of the order. The order becomes final upon the filing of the petition.
4. If a person fails to comply with any provision of an order issued pursuant to subsection 2, the commissioner may, through the attorney general, at any time after 30 days after the service of the order, cause an action to be instituted in the district court of the county wherein the person resides or has his principal place of business requesting the court to enforce the provisions of the order or to provide any other appropriate injunctive relief.
5. If the court finds that:
(a) The violation complained of is a deceptive trade practice;
(b) The proceedings by the commissioner concerning the written report and any order issued pursuant to subsection 3 are in the interest of the public; and
(c) The findings of the commissioner are supported by the weight of the evidence,
the court shall issue an order enforcing the provisions of the order of the commissioner.
6. An order issued pursuant to subsection 5 may include:
(a) A provision requiring the payment to the commissioner of a penalty of not more than $5,000 for each act amounting to a failure to comply with the commissioner's order; or
(b) Such injunctive or other equitable or extraordinary relief as is determined appropriate by the court.
7. Any aggrieved party may appeal from the final judgment, order or decree of the court in [a like] the same manner as provided for appeals in civil cases.
8. Upon the violation of any judgment, order or decree issued pursuant to subsection 5 or 6, the commissioner, after a hearing thereon, may proceed in accordance with the provisions of NRS 598.0999.
Sec. 11 NRS 598.0973 is hereby amended to read as follows:
598.0973 1. In any administrative hearing brought pursuant to NRS 598.0971, if the commissioner finds that a person has engaged in a deceptive trade practice directed toward an elderly or disabled person, the commissioner may, in addition to the administrative fine authorized by NRS 598.0971, impose an administrative fine of not more than $5,000 for each violation.
2. In any action brought pursuant to NRS 598.0979 to 598.099, inclusive, if the court finds that a person has engaged in a deceptive trade practice directed toward an elderly or disabled person, the court may, in addition to any other civil or criminal penalty, impose a civil penalty of not more than $10,000 for each violation.
[2.] 3. In determining whether to impose an administrative fine or a civil penalty pursuant to [subsection 1,] this section, the commissioner or the court , as appropriate, shall consider whether:
(a) The conduct of the person was in disregard of the rights of the elderly or disabled person;
(b) The person knew or should have known that his conduct was directed toward an elderly or disabled person;
(c) The elderly or disabled person was more vulnerable to the conduct of the person because of the age, health, infirmity, impaired understanding, restricted mobility or disability of the elderly or disabled person;
(d) The conduct of the person caused the elderly or disabled person to suffer actual and substantial physical, emotional or economic damage;
(e) The conduct of the person caused the elderly or disabled person to suffer:
(1) Mental or emotional anguish;
(2) The loss of the primary residence of the elderly or disabled person;
(3) The loss of the principal employment or source of income of the elderly or disabled person;
(4) The loss of money received from a pension, retirement plan or governmental program;
(5) The loss of property that had been set aside for retirement or for personal or family care and maintenance;
(6) The loss of assets which are essential to the health and welfare of the elderly or disabled person; or
(7) Any other interference with the economic well-being of the elderly or disabled person, including the encumbrance of his primary residence or principal source of income; or
(f) Any other factors that the commissioner or the court deems to be appropriate.
Sec. 12 NRS 598.0979 is hereby amended to read as follows:
598.0979 1. Notwithstanding the requirement of knowledge as an element of a deceptive trade practice, [when] if the commissioner or director has cause to believe that a person has engaged or is engaging in any deceptive trade practice, knowingly or otherwise, [he] the commissioner or director may request in writing that the attorney general represent him in instituting an appropriate legal proceeding, including, without limitation, an application for an injunction or temporary restraining order prohibiting the person from continuing the practices. The court may make orders or judgments necessary to prevent the use by the person of any such deceptive trade practice or to restore to any other person any money or property which may have been acquired by the deceptive trade practice.
2. Where the commissioner or director has the authority to institute a civil action or other proceeding, in lieu thereof or as a part thereof, he may accept an assurance of discontinuance of any deceptive trade practice. This assurance may include a stipulation for the payment by the alleged violator of:
(a) The costs of investigation and the costs of instituting the action or proceeding;
(b) Any amount of money which he may be required to pay pursuant to the provisions of NRS 598.0971 in lieu of any administrative fine; and
(c) The restitution of any money or property acquired by any deceptive trade practice.
[Except as otherwise provided in this subsection, any assurance of discontinuance accepted by the commissioner or director and any stipulation filed with the court is confidential to the parties to the action or proceeding and to the court and its employees. Upon final judgment by the court that an injunction or a temporary restraining order, issued as provided in subsection 1 of this section, has been violated, an assurance of discontinuance has been violated or a person has engaged in the same deceptive trade practice as had previously been enjoined, the assurance of discontinuance or stipulation becomes a public record.]
3. Proof by a preponderance of the evidence of a violation of an assurance constitutes prima facie evidence of a deceptive trade practice for the purpose of any civil action or administrative proceeding brought thereafter by the commissioner or director, whether a new action or a subsequent motion or petition in any pending action or proceeding.
Sec. 13 NRS 598.098 is hereby amended to read as follows:
598.098 1. NRS 598.0903 to 598.0999, inclusive, do not prohibit the commissioner or director from disclosing to the attorney general, any district attorney or any law enforcement officer the fact that a crime has been committed by any person, if this fact has become known as a result of any investigation conducted pursuant to the provisions of NRS 598.0903 to 598.0999, inclusive.
2. [Subject to the provisions of subsection 2 of NRS 598.0979 and except] Except as otherwise provided in this section, the commissioner or director may not make public the name of any person alleged to have committed a deceptive trade practice. This subsection does not:
(a) Prevent the commissioner or director from issuing public statements describing or warning of any course of conduct which constitutes a deceptive trade practice.
(b) Apply to a person who is subject to an order issued pursuant to subsection 5 of NRS 598.0971.
3. Upon request, the commissioner may:
(a) Disclose the number of written complaints received by the commissioner during the current or immediately preceding fiscal year. A disclosure made pursuant to this paragraph must include the disposition of the complaint disclosed.
(b) Make public any order to cease and desist issued pursuant to subsection 5 of NRS 598.0971.
This subsection does not authorize the commissioner to disclose or make public the contents of any complaint described in paragraph (a) or the record of or any other information concerning a hearing conducted in relation to the issuance of an order to cease and desist described in paragraph (b).
4. The commissioner may adopt regulations authorizing the disclosure of information concerning any complaint or number of complaints received by the commissioner or director relating to a person who has been convicted of violating a provision of NRS 598.0903 to 598.0999, inclusive.
Sec. 14 NRS 598.2825 is hereby amended to read as follows:
598.2825 1. [An organization shall not advertise its services or conduct business in this state unless it has filed an application for registration on a form prescribed by the division, and has received a certificate of registration from the division. A certificate of registration is not transferable or assignable.
2. The application for registration must be accompanied by a $25 fee and a bond in compliance with the requirements of NRS 598.285.
3.] Before advertising its services or conducting business in this state, an organization must register pursuant to section 3 of this act and deposit security in the amount of $100,000 with the division pursuant to section 4 of this act. The security must be conditioned on compliance by the organization with the provisions of NRS 598.282 to 598.286, inclusive, and the terms of its contracts with buyers.
2. If an organization has deposited the required security, a salesperson, agent or representative of the organization who sells its services is not required to deposit his own separate security. For the purposes of this subsection, a person is a salesman, agent or representative of an organization if:
(a) He does business under the same name as the organization; or
(b) The organization and the issuer of the security certify in writing that the security covers the salesperson, agent or representative.
3. The division shall adopt such regulations as it deems necessary to carry out the provisions of this section.
Sec. 15 NRS 598.283 is hereby amended to read as follows:
598.283 1. Before the execution of a contract between the buyer and an organization or before the receipt by the organization of any money or other valuable consideration, whichever occurs first, the organization [shall] must provide to the buyer, in writing:
(a) A statement:
(1) That the buyer has a right pursuant to 15 U.S.C. §§ 1681g and 1681h to receive disclosure of all information, except medical information, in any file on him maintained by a consumer credit reporting agency;
(2) That 15 U.S.C. § 1681j requires that this disclosure be made free to the buyer if he requests it within 30 days after receipt of notice of a denial of credit;
(3) Of the approximate cost to the buyer of receiving this disclosure when there has not been a denial of credit; and
(4) That the buyer has the right pursuant to 15 U.S.C. § 1681i to dispute the completeness or accuracy of any item contained in any file on him maintained by any consumer credit reporting agency.
(b) A detailed description of the services to be performed by the organization for the buyer and the total amount the buyer will become obligated to pay for the services.
(c) A statement that the buyer has a right to proceed against the [bond filed] security deposited with the division by the organization under the circumstances and in the manner set forth in [NRS 598.285.] sections 5 and 6 of this act. The statement provided pursuant to this paragraph must include the name and address of the [corporate surety executing the bond.] issuer of the security.
(d) A statement that the buyer may cancel a contract for the services of an organization within 5 days after its execution by written notice mailed or delivered to the organization.
(e) A statement identifying the availability of any nonprofit association which provides services similar to those offered by the organization. The statement provided pursuant to this paragraph must include the association's telephone number, including the association's national toll-free telephone number, if any.
2. The written information provided pursuant to subsection 1 must be printed in at least 10-point bold type and must include the following statement or a similar statement approved by the division:

RIGHTS OF CONSUMERS REGARDING CREDIT FILES

PURSUANT TO STATE AND FEDERAL LAW

You have the right to obtain a copy of your credit file from a consumer credit reporting agency. There is no fee if, within the past 30 days, you have been turned down for credit, employment or insurance because of information in your credit report. The consumer credit reporting agency is obligated to provide someone to help you interpret the information in your credit file.

You have a right to dispute inaccurate information by contacting the consumer credit reporting agency directly. However, neither you nor any credit service organization has the right to have accurate, current and verifiable information removed from your credit report. Generally, under the Fair Credit Reporting Act, the consumer credit reporting agency is obligated to remove accurate, negative information from your report only if it is more than 7 years old and bankruptcy information can be reported for 10 years. If you have notified a credit reporting agency that you dispute the accuracy of information in your credit file, the consumer credit reporting agency is obligated to make an investigation and modify or remove inaccurate information. The consumer credit reporting agency may not charge a fee for this service. Any relevant information and copies of all documents you have concerning the disputed information should be given to the consumer credit reporting agency. If the investigation does not resolve the dispute to your satisfaction, you may send a brief statement to the consumer credit reporting agency to keep in your credit file, explaining why you think the information in the credit file is inaccurate. The consumer credit reporting agency is obligated to include your statement or a summary of your statement about disputed information in any report it issues about you.

RIGHTS OF CONSUMERS REGARDING

CANCELLATION OF A CONTRACT

You have a right to give written notice of your intent to cancel a contract with a credit service organization for any reason within 5 working days from the date you signed it. If for any reason you do cancel a contract during this time, you do not owe any money. You have a right to sue a credit service organization if it misleads you.

3. The organization shall retain a copy of the written information it provides pursuant to the requirements of subsections 1 and 2 for not less than 2 years.
Sec. 16 NRS 598.289 is hereby amended to read as follows:
598.289 1. The provisions of NRS 598.282 to 598.287, inclusive, are not exclusive and do not relieve the parties or the contracts subject thereto from compliance with any other applicable provision of law.
2. The remedies provided in NRS [598.285,] 598.286 and 598.287 for violation of any provision of NRS 598.282 to 598.286, inclusive, are in addition to any other procedures or remedies for any violation or conduct provided for in any other law.
3. Any violation of NRS 598.282 to 598.286, inclusive, constitutes a deceptive trade practice for the purposes of NRS 598.0903 to 598.0999, inclusive.
Sec. 17 NRS 598.840 is hereby amended to read as follows:
598.840 As used in NRS 598.840 to 598.930, inclusive, and section 8 of this act, unless the context otherwise requires:
1. "Business day" means any calendar day except Sunday, or the following business holidays: New Year's Day, Martin Luther King, Jr.'s Birthday, Washington's Birthday, Memorial Day, Independence Day, Labor Day, Nevada Day, Veterans' Day, Thanksgiving Day and Christmas Day.
2. "Buyer" means a person who purchases by contract a membership in an organization for buying goods or services at a discount.
3. "Commissioner" means the commissioner of the consumer affairs division of the department of business and industry.
4. "Organization for buying goods or services at a discount" or "organization" means a person who, for a consideration, provides or claims to provide a buyer with the ability to purchase goods or services at a price which is represented to be lower than the price generally charged in the area.
Sec. 18 NRS 598.875 is hereby amended to read as follows:
598.875 Each contract for membership in an organization must:
1. Be in writing, legible and have all spaces filled in before the buyer signs it;
2. Be in the language in which the sales presentation was given;
3. Contain the addresses of the buyer and the organization;
4. Be given to the buyer when he signs it;
5. Disclose that the security required by [NRS 598.850] section 4 of this act has been obtained and deposited with the commissioner;
6. Specify the term of the membership of the buyer, which may not be measured by the buyer's life; and
7. Clearly specify the buyer's right to cancel the contract pursuant to NRS 598.885.
Sec. 19 NRS 598.930 is hereby amended to read as follows:
598.930 1. The remedies, duties and prohibitions of NRS 598.840 to 598.930, inclusive, and section 8 of this act, are not exclusive and are in addition to any other remedies provided by law.
2. Any violation of NRS [598.850] 598.855 to 598.900, inclusive, constitutes a deceptive trade practice for the purposes of NRS 598.0903 to 598.0999, inclusive.
Sec. 20 NRS 598.944 is hereby amended to read as follows:
598.944 1. Each owner of a dance studio or health club shall register with the division [,] pursuant to section 3 of this act, listing the full name and address of the studio or club and any other description of its facilities or activities the division requires.
2. At least one member of the governing body of the dance studio or health club must live in the county where the studio or club is located. He is the agent of the studio or club and its owner for receipt of process served.
Sec. 21 NRS 598.946 is hereby amended to read as follows:
598.946 1. Except as otherwise provided in subsection [11, before contracting with a buyer,] 5, before advertising its services or conducting business in this state, the owner of a dance studio or a health club [shall deposit with the division:
(a) A bond executed by a corporate surety approved by the commissioner and licensed to do business in this state;
(b) An irrevocable letter of credit of which the owner of the dance studio or health club is the obligor and issued by a bank whose deposits are federally insured; or
(c) A certificate of deposit in a federally insured financial institution that may be withdrawn only on the order of the commissioner, except that the interest may accrue to the owner,] must register pursuant to NRS 598.944 and section 3 of this act, and deposit security with the division pursuant to section 4 of this act for each facility which the owner operates in this state. The security must be conditioned on compliance by the owner with the provisions of NRS 598.940 to 598.966, inclusive, and the terms of the contract with a buyer.
2. Except as otherwise provided in subsection [9,] 3, the amount of the [bond, letter of credit or certificate of deposit] security to be deposited for each facility operated in this state must be:
(a) Ten thousand dollars, if the dance studio or health club has less than 400 members;
(b) Fifteen thousand dollars, if the dance studio or health club has 400 members or more but less than 800 members;
(c) Twenty thousand dollars, if the dance studio or health club has 800 members or more but less than 1,200 members;
(d) Twenty-five thousand dollars, if the dance studio or health club has 1,200 members or more but less than 1,500 members;
(e) Thirty-five thousand dollars, if the dance studio or health club has 1,500 members or more but less than 4,000 members; and
(f) Fifty thousand dollars, if the dance studio or health club has 4,000 or more members.
3. [Except as otherwise provided in subsection 11, any buyer who is injured because of breach of contract or bankruptcy may bring and maintain an action to recover against the bond, letter of credit or certificate of deposit.
4. Except as otherwise provided in subsection 11, the liability of the surety does not exceed the amount of the bond regardless of the number of claims filed or the aggregate amount claimed. If the amount claimed exceeds the amount of the bond, the surety shall deposit the amount of the bond with the division.
5. The division may bring an action for interpleader against all claimants upon the security. If it does so, the division must publish notice of the action at least once each week for 2 weeks in a newspaper of general circulation in the county where the organization has its principal place of business. The division is entitled to deduct its costs of the action, including publication costs, from the amount of the security. Claims against the security have equal priority. If the security is insufficient to pay the claims in full, they must be paid pro rata. In the case of a bond, the surety is then relieved of all liability under the bond.
6. The division may, in lieu of bringing an action for interpleader pursuant to subsection 5, conduct a hearing to determine the distribution of the security to claimants. The division shall adopt regulations to provide for adequate notice and the conduct of the hearing. Distribution pursuant to this subsection relieves the surety of all liability under the bond.
7. Except as otherwise provided in subsection 11, the dance studio or health club shall maintain the bond in full force while it is doing business and shall keep accurate records of the bond and the payments made on the premium. These records must be open to inspection by the division during business hours. It shall notify the division no later than 30 days before the date of expiration of the bond and provide written proof of the renewal of the bond to the division.
8. Except as otherwise provided in subsection 11, the division may apply for injunctive relief to require the dance studio or health club to register or to deposit and maintain the security required by subsection 1.
9.] If a dance studio or health club conducts any pre-sale of dance lessons, the use of facilities or other services [,] for a facility that is not yet in operation or does not yet actually provide such services, the amount of the [bond] security required by [subsection 2 must be $100,000.
10.] this section for each facility is $100,000.
4. A dance studio or health club shall report to the division on a quarterly basis the size of its membership and shall, on the basis of any change in the size of that membership, adjust accordingly the amount of the [bond, certificate of deposit or letter of credit] security deposited with the division.
[11.] 5. If a dance studio or health club has actively conducted business for not less than 4 consecutive years and has not changed ownership or, in the case of a corporation, not more than 25 percent of its authorized shares have been transferred, it is not required to deposit [a bond, letter of credit or certificate of deposit] security with the division pursuant to [subsection 1.] section 4 of this act. If a dance studio or health club does not deposit [a bond, letter of credit or certificate of deposit,] such security, it shall obtain a written acknowledgment from each member and prominently post a notice on its premises stating that no security for refunds or reimbursement has been deposited with the State of Nevada.
Sec. 22 NRS 598.948 is hereby amended to read as follows:
598.948 Each contract between the buyer and the dance studio or health club must:
1. Be in writing, legible and have all spaces filled in before the buyer signs it;
2. Be in the language in which the sales presentation was given;
3. Contain the addresses of the buyer and the studio or club;
4. Be given to the buyer when he signs it;
5. Disclose whether security has been obtained and deposited with the division pursuant to [NRS 598.946;] section 4 of this act;
6. Specify the term of membership of the buyer, which must not be measured by the life of the buyer;
7. Clearly specify the right of the buyer to cancel the contract pursuant to NRS 598.950;
8. Not contain a clause by which the contract is automatically renewed; and
9. Specify the number of lessons and the cost of each lesson, if the contract is for dance lessons.
Sec. 23 Chapter 599B of NRS is hereby amended by adding thereto the provisions set forth as sections 24 to 28, inclusive, of this act.
Sec. 24 A seller or salesman, whether registered or unregistered, shall not:
1. Fail to disclose in a clear and conspicuous manner before a consumer pays for goods or services that are the subject of a sales offer:
(a) The total cost to purchase, receive or use, and the quantity of, the goods or services;
(b) All material restrictions, limitations and conditions on purchasing, receiving or using the goods or services;
(c) If the seller has a policy which, except as otherwise required by NRS 599B.190, does not allow refunds, cancellations, changes or repurchases, or any combination thereof, a statement informing the consumer of that policy; and
(d) If the seller makes a representation about a policy which provides for refunds, cancellations, exchanges or repurchases, or any combination thereof, a statement of all material terms and conditions of that policy.
2. Fail to disclose in a clear and conspicuous manner in a chance promotion:
(a) The odds of receiving a premium and, if the odds are not calculable in advance, the factors that will be used to calculate those odds;
(b) That no purchase or payment is required to win a premium or to participate in the promotion;
(c) The method of participating in the promotion which does not require any purchase or payment, with instructions on how to participate, or an address to which consumers may write or a local or toll-free telephone number which consumers may call for information on how to participate; and
(d) All material conditions and costs to receive or redeem a premium.
3. Misrepresent, directly or by implication:
(a) The total cost to purchase, receive or use, and the quantity of, any goods or services that are the subject of a sales offer.
(b) Any material restriction, limitation or condition on purchasing, receiving or using the goods or services.
(c) Any material aspect of the performance, efficacy, nature or other fundamental characteristics of the goods or services.
(d) Any material aspect of the nature or terms of the seller's policy relating to refunds, cancellations, exchanges and repurchases.
(e) Any material aspect of a chance promotion, including, but not limited to, the odds of receiving a premium, the nature or value of the premium, and whether a purchase or payment is required to win the premium or to participate in the promotion.
(f) Any material aspect of any investment opportunity, including, but not limited to, risk, liquidity, potential for earnings and profitability.
(g) A seller's affiliation with or endorsement by a governmental or other organization.
4. Obtain or submit for payment a check, draft or other negotiable instrument drawn on a consumer's checking, savings, share or similar account, without the consumer's express verifiable authorization. Such authorization shall be deemed verifiable if the consumer has provided:
(a) Express written authorization, including, but not limited to, the consumer's signature on a negotiable instrument;
(b) Express oral authorization which is tape recorded and made available upon request to the consumer's financial institution and which clearly evidences the consumer's authorization for the payment of the goods or services, the date on which the authorization was given and that the consumer received all of the following information:
(1) The date that each payment is due;
(2) The amount of each payment;
(3) The payor's name;
(4) If there is more than one payment, the number of payments; and
(5) A telephone number for customer inquiries that is answered during normal business hours; or
(c) Written confirmation of the transaction which must be sent to the consumer before the submission for payment of the consumer's check, draft or other negotiable instrument and include:
(1) All of the information described in subparagraphs (1) to (5), inclusive, of paragraph (b);
(2) The date on which the written confirmation is made by the consumer; and
(3) The procedures by which the consumer may obtain a refund from the seller or salesman if the confirmation is inaccurate.
5. Make a false or misleading statement with the intent to induce a consumer to pay for goods or services.
Sec. 25 A person shall not provide any substantial assistance or support to any seller or salesman if the person knows or consciously avoids knowing that the seller or salesman is engaged in any act or practice that violates any provision of this chapter.
Sec. 26 1. Except as expressly authorized by the issuer of a credit card used by a consumer in response to a solicitation:
(a) A seller or salesman shall not present to or deposit with, or cause another person to present to or deposit with, the issuer of the credit card for payment a sales draft generated by a solicitation governed by the provisions of this chapter if the sales draft is not the actual result of such a solicitation between the cardholder and the seller or salesman.
(b) A person shall not employ, solicit or otherwise cause a seller or salesman, or any employee, representative or agent of a seller or salesman, to present to or deposit with the issuer of the credit card for payment a sales draft generated by a solicitation governed by the provisions of this chapter if the sales draft is not the actual result of such a solicitation between the cardholder and the seller or salesman.
2. A person shall not obtain access to the system of an issuer relating to the credit cards which it issues, through the use of a business relationship or an affiliation with a merchant, if that access is not authorized by the issuer of the credit card or pursuant to a merchant agreement with the issuer.
3. As used in this section:
(a) "Cardholder" means the consumer named on the face of a credit card to whom or for whose benefit a credit card is issued by an issuer.
(b) "Issuer" means the business organization, financial institution or authorized agent of a business organization or financial institution which issues a credit card.
Sec. 27 1. During a solicitation by telephone, a seller or salesman, whether registered or unregistered, shall not use threats, intimidation, or profane or obscene language toward a consumer.
2. While soliciting a sale, a seller or salesman, whether registered or unregistered, shall not:
(a) Cause any telephone to ring or engage any person in telephone conversations repeatedly or continually with the intent to annoy, abuse or harass any person at the telephone number being called.
(b) Initiate a telephone call to a consumer if the consumer has previously stated that he does not wish to receive such a call from or on behalf of the seller whose goods or services are being offered.
3. A seller or salesman does not violate the provisions of subsection 2 by initiating a telephone call to a consumer after the consumer has previously stated that he does not wish to receive such a call from or on behalf of the seller whose goods or services are being offered if:
(a) The seller has established and carried out written procedures to comply with the provisions of paragraph (b) of subsection 2;
(b) The seller has trained its personnel in the procedures established pursuant to paragraph (a);
(c) The seller has recorded and maintained a current list of consumers who previously have requested that they do not wish to receive such a call from or on behalf of the seller whose goods or services are being offered; and
(d) The subsequent telephone call is the result of error.
4. Without the prior consent of the consumer, a seller or salesman, whether registered or unregistered, shall not place a telephone call to the residence of the consumer at any time other than between the hours of 8 a.m. and 9 p.m. local time at the location of the residence.
5. A seller or salesman, whether registered or unregistered, who initiates a telephone call to a consumer shall disclose promptly and in a clear and conspicuous manner to the person receiving the call:
(a) The true identity of the seller or the seller and salesman, as appropriate;
(b) That the purpose of the telephone call is to sell goods or services, or to solicit a donation;
(c) The nature of the goods or services being offered, or the requested donation; and
(d) If the telephone call is made in conjunction with a chance promotion, that no purchase or payment is necessary to win a premium or participate in the promotion. The disclosure required by this paragraph must be made before or in conjunction with the provision to the consumer of the description of the premium. If requested by the consumer, the seller or salesman shall disclose the method for participating in the promotion which does not require a purchase or payment by the consumer.
Sec. 28 In a civil action pursuant to this chapter or any criminal action, a person claiming to fall within an exclusion from the definition of a seller as set forth in subsection 11 of NRS 599B.010 has the burden of proving the applicability of the exclusion.
Sec. 29 NRS 599B.010 is hereby amended to read as follows:
599B.010 As used in this chapter, unless the context otherwise requires:
1. "Chance promotion" means any plan in which premiums are distributed by random or chance selection.
2. "Commissioner" means the commissioner of consumer affairs.
3. "Consumer" means a person who is solicited by a seller or salesman.
4. "Division" means the consumer affairs division of the department of business and industry.
5. "Donation" means a promise, grant or pledge of money, credit, property, financial assistance or other thing of value given in response to a solicitation by telephone, including, but not limited to, a payment or promise to pay in consideration for a performance, event or sale of goods or services. The term does not include volunteer services, government grants or contracts or a payment by members of any organization of membership fees, dues, fines or assessments or for services rendered by the organization to those persons, if:
(a) The fees, dues, fines, assessments or services confer a bona fide right, privilege, professional standing, honor or other direct benefit upon the member; and
(b) Membership in the organization is not conferred solely in consideration for making a donation in response to a solicitation.
6. "Goods or services" means any property, tangible or intangible, real, personal or mixed, and any other article, commodity or thing of value.
7. "Premium" includes any prize, bonus, award, gift or any other similar inducement or incentive to purchase.
8. "Recovery service" means a business or other practice whereby a person represents or implies that he will, for a fee, recover or assist in recovering any amount of money that a consumer has provided to , or any item of value promised to a consumer by, a seller or salesman pursuant to a solicitation governed by the provisions of this chapter.
9. "Salesman" means any person:
(a) Employed or authorized by a seller to sell, or to attempt to sell, goods or services by telephone;
(b) Retained by a seller to provide consulting services relating to the management or operation of the seller's business; or
(c) Who communicates on behalf of a seller with a consumer:
(1) In the course of a solicitation by telephone; or
(2) For the purpose of verifying, changing or confirming an order,
except that a person is not a salesman if his only function is to identify a consumer by name only and he immediately refers the consumer to a salesman.
10. Except as otherwise provided in subsection 11, "seller" means any person who, on his own behalf, causes or attempts to cause a solicitation by telephone to be made through the use of one or more salesmen or any automated dialing announcing device under any of the following circumstances:
(a) The person initiates contact by telephone with a consumer and represents or implies:
(1) That a consumer who buys one or more goods or services will receive additional goods or services, whether or not of the same type as purchased, without further cost, except for actual postage or common carrier charges;
(2) That a consumer will or has a chance or opportunity to receive a premium;
(3) That the items for sale are gold, silver or other precious metals, diamonds, rubies, sapphires or other precious stones, or any interest in oil, gas or mineral fields, wells or exploration sites or any other investment opportunity;
(4) [That offered for sale is information or opinions relating to sporting events;
(5)] That offered for sale are the services of a recovery service; or
[(6)] (5) That the consumer will receive a premium or goods or services if he makes a donation;
(b) The solicitation by telephone is made by the person in response to inquiries from a consumer generated by a notification or communication sent or delivered to the consumer that represents or implies:
(1) That the consumer has been in any manner specially selected to receive the notification or communication or the offer contained in the notification or communication;
(2) That the consumer will receive a premium if the recipient calls the person;
(3) That if the consumer buys one or more goods or services from the person, the consumer will also receive additional or other goods or services, whether or not the same type as purchased, without further cost or at a cost that the person represents or implies is less than the regular price of the goods or services;
(4) That offered for sale are the services of a recovery service; or
(5) That the consumer will receive a premium or goods or services if he makes a donation; or
(c) The solicitation by telephone is made by the person in response to inquiries generated by advertisements that represent or imply that the person is offering to sell any:
(1) Gold, silver or other metals, including coins, diamonds, rubies, sapphires or other stones, coal or other minerals or any interest in oil, gas or other mineral fields, wells or exploration sites, or any other investment opportunity; or
(2) [Information or opinions relating to sporting events; or
(3)] Services of a recovery service.
11. "Seller" does not include:
(a) A person licensed pursuant to chapter 90 of NRS when soliciting offers, sales or purchases within the scope of his license.
(b) A person licensed pursuant to chapter 119A, 119B, 624, 645 or 696A of NRS when soliciting sales within the scope of his license.
(c) A person licensed as an insurance broker, agent or solicitor when soliciting sales within the scope of his license.
(d) Any solicitation of sales made by the publisher of a newspaper or magazine or by an agent of the publisher pursuant to a written agreement between the agent and publisher [.] , if the newspaper or magazine is produced exclusively by the publisher.
(e) A broadcaster soliciting sales who is licensed by any state or federal authority, if the solicitation is within the scope of the broadcaster's license.
(f) A person who solicits a donation from a consumer when:
(1) The person represents or implies that the consumer will receive a premium or goods or services with an aggregated fair market value of 2 percent of the donation or $50, whichever is less; or
(2) The consumer provides a donation of $50 or less in response to the solicitation.
(g) A charitable organization which is registered or approved to conduct a lottery pursuant to chapter 462 of NRS.
(h) A public utility or motor carrier which is regulated pursuant to chapter 704 or 706 of NRS, or by an affiliate of such a utility or motor carrier, if the solicitation is within the scope of its certificate or license.
(i) A utility which is regulated pursuant to chapter 710 of NRS, or by an affiliate of such a utility.
(j) A person soliciting the sale of books, recordings, video cassettes or similar items through an organization whose method of sales is governed by the regulations of the Federal Trade Commission relating to the use of negative option plans by sellers in commerce, including the use of continuity plans, subscription arrangements, arrangements for standing orders, supplements, and series arrangements under which the person periodically ships merchandise to a consumer who has consented in advance to receive the merchandise on a periodic basis and has the opportunity to review the merchandise for at least 10 days and return it for a full refund within 30 days after it is received.
(k) A person who solicits sales by periodically publishing and delivering a catalog to consumers if the catalog:
(1) Contains a written description or illustration of each item offered for sale and the price of each item;
(2) Includes the business address of the person;
(3) Includes at least 100 pages of written material and illustrations;
(4) Is distributed in more than one state; and
(5) Has an annual circulation by mailing of not less than 250,000.
(l) A person soliciting without the intent to complete and who does not complete, the sales transaction by telephone but completes the sales transaction at a later face-to-face meeting between the solicitor and the consumer, if the person, after soliciting a sale by telephone, does not cause another person to collect the payment from or deliver any goods or services purchased to the consumer.
(m) Any commercial bank, bank holding company, subsidiary or affiliate of a bank holding company, trust company, savings and loan association, credit union, industrial loan company, personal property broker, consumer finance lender, commercial finance lender, or insurer subject to regulation by an official or agency of this state or of the United States, if the solicitation is within the scope of the certificate or license held by the entity.
(n) A person holding a certificate of authority issued pursuant to chapter 452 of NRS when soliciting sales within the scope of the certificate.
(o) A person licensed pursuant to chapter 689 of NRS when soliciting sales within the scope of his license.
(p) A person soliciting the sale of services provided by a community antenna television company subject to regulation pursuant to chapter 711 of NRS.
(q) A person soliciting the sale of agricultural products, if the solicitation is not intended to and does not result in a sale of more than $100. As used in this paragraph, "agricultural products" has the meaning ascribed to it in NRS 587.290.
(r) A person who has been operating, for at least 2 years, a retail business establishment under the same name as that used in connection with the solicitation of sales by telephone if, on a continuing basis:
(1) Goods are displayed and offered for sale or services are offered for sale and provided at the person's business establishment; and
(2) At least 50 percent of the person's business involves the buyer obtaining such goods or services at the person's business establishment.
(s) A person soliciting only the sale of telephone answering services to be provided by the person or his employer.
(t) A person soliciting a transaction regulated by the Commodity Futures Trading Commission, if:
(1) The person is registered with or temporarily licensed by the Commission to conduct that activity pursuant to the Commodity Exchange Act , [(] 7 U.S.C. §§ 1 et seq. ; [);] and
(2) The registration or license has not expired or been suspended or revoked.
(u) A person who contracts for the maintenance or repair of goods previously purchased from the person:
(1) Making the solicitation; or
(2) On whose behalf the solicitation is made.
(v) A person to whom a nonrestricted gaming license, which is current and valid, has been issued pursuant to chapter 463 of NRS when soliciting sales within the scope of his license.
(w) A person who solicits a previous customer of the business on whose behalf the call is made if the person making the call:
(1) Does not offer the customer any premium in connection with the sale;
(2) Is not selling an investment or an opportunity for an investment that is not registered with any state or federal authority; and
(3) Is not regularly engaged in telephone sales.
(x) A person who solicits the sale of livestock.
(y) An issuer or wholly owned subsidiary of an issuer which has a security that is listed on the New York Stock Exchange.
Sec. 30 NRS 599B.105 is hereby amended to read as follows:
599B.105 1. The bond, letter of credit or certificate of deposit filed pursuant to NRS 599B.100 must be held in trust for consumers injured by the seller.
2. Any consumer who is injured by the bankruptcy of the seller or his breach of any agreement entered into in his capacity as a registrant may bring and maintain an action to recover against the bond, letter of credit or certificate of deposit.
3. In addition to the remedy provided by subsection 2, a consumer may file with the division a claim against a bond, letter of credit or certificate of deposit filed pursuant to NRS 599B.100 if he:
(a) Has purchased or received goods or services from a registrant;
(b) Was harmed by that registrant's breach of any agreement entered into in his capacity as a registrant; and
(c) Can show that [he is entitled to a refund pursuant to subsection 1 of NRS 599B.190.] the registrant's violation of the provisions of this chapter caused the harm.
No other person is entitled to bring an action against the bond, letter of credit or certificate of deposit pursuant to this subsection.
4. The division shall audit each claim to determine whether the consumer is entitled to receive a refund pursuant to subsection 1 of NRS 599B.190. The division may request the consumer and the registrant, or either of them, to provide information to assist in the audit.
5. After the division has completed its audit, it shall schedule a hearing and notify the registrant and the consumer of its intent to take action or to decline to take action. If the division decides that it will take action against the bond, letter of credit or certificate of deposit, it shall notify the registrant not less than 10 days before the date set for the hearing to appear and show cause why the division should not take the intended action. If the division decides that it will not take action against the bond, letter of credit or certificate of deposit of a registrant on behalf of the consumer, the division shall notify the consumer not less than 10 days before the date set for the hearing to appear and show cause why the division should not decline to take action.
6. If, upon hearing, the commissioner determines that there are sufficient grounds to take the intended action against the bond, letter of credit or certificate of deposit, or if the registrant or the consumer fails to appear and show cause why the division should not take the intended action, the commissioner shall take the action provided for in the division's notice of intended action.
7. The division shall not distribute or cause to be distributed to the consumer more than the actual amount of money that the consumer paid for the product, service or premium. The division shall not distribute or cause to be distributed to the consumer the value of a premium if the value exceeds the amount paid by the consumer.
8. Except as otherwise provided in subsection 10, if the total amount of money awarded to consumers against a bond does not exceed the amount of that bond, the surety on the bond shall distribute the money from the bond to the consumers according to the terms of the order of the commissioner and is thereby relieved of all liability pursuant to the bond.
9. If the total amount of money awarded to consumers against a bond exceeds the amount of that bond, or if the security is held in the form of a letter of credit or a certificate of deposit, the surety on the bond or the issuer of the letter of credit or certificate of deposit shall deposit the amount of the security with the division and is thereby relieved of all liability pursuant thereto. Except as otherwise provided in subsection 10, the division shall distribute to each consumer his pro rata share of the proceeds of the bond, letter of credit or certificate of deposit.
10. Before distributing the proceeds of the bond, letter of credit or certificate of deposit to the consumer, the division:
(a) Shall allow the registrant a reasonable amount of time within which to resolve the claims.
(b) Is entitled to deduct from the proceeds of the bond, letter of credit or certificate of deposit the division's or commissioner's costs of hearing, auditing and determining the claim, including attorney's fees.
11. A consumer who receives less than a full refund may bring an action in a court of competent jurisdiction against the registrant to recover the unpaid balance.
12. The commissioner may adopt regulations regarding the distribution of the money to claimants pursuant to this section, including the conduct of hearings relating to such distributions.
Sec. 31 NRS 599B.160 is hereby amended to read as follows:
599B.160 1. A seller, whether registered or unregistered, shall keep the following records relating to its activities which are governed by the provisions of this chapter:
(a) A copy of each substantially different advertisement, brochure, script and promotional material;
(b) The name and last known address of each recipient of a premium and a description of the premiums actually awarded for the premiums that are represented, directly or by implication, to have a value of $25 or more;
(c) The name and last known address of each consumer who purchases goods or services, a description of the goods or services purchased, the date that the goods or services were shipped or provided, and the amount paid by the consumer for the goods or services;
(d) The name, the last known home address and telephone number, and the job title of each current and former employee of the seller who is or was directly involved in telephone sales; and
(e) All verifiable authorizations required to be provided pursuant to any provisions of this chapter and all other applicable laws.
2. The seller shall keep each record described in subsection 1 for not less than 24 months after the date on which the record was produced. The seller may keep the records in any form, and in such manner, format and place as he keeps other similar records in the ordinary course of business.
3. If the seller's business is dissolved or terminated, the person who is designated as the principal officer of the seller's business at the time of the dissolution or termination shall maintain the records of the business as required pursuant to this section.
4. If the seller sells his business, assigns his interest in the business to another person or makes any other change which affects his interest in the ownership of the business:
(a) The seller shall transfer all records of the business required to be kept pursuant to this section to the person to whom the business was sold, to whom the interest was assigned or in whose name the change in ownership was made; and
(b) The person to whom the records are transferred shall maintain all records as required by this section.
5. If any change is made to any script, outline, presentation or sales or donation information or literature used by a [registrant] seller or salesman in connection with any solicitation, the new or revised material must be submitted by the registrant to the division before such material is used.
Sec. 32 NRS 599B.180 is hereby amended to read as follows:
599B.180 1. If a seller expressly or impliedly represents to any consumer, directly or through a salesman, that the consumer is or may be eligible to receive any gift, premium, bonus or prize, however denominated, the seller shall [:
1. Submit] submit to the division a statement setting forth, for each item mentioned:
(a) A description of the item.
(b) The value or worth of the item and the basis for the valuation.
(c) All terms and conditions a consumer must satisfy in order to receive the item. [The statement must be accompanied by a copy of the written statement of terms and conditions provided to consumers pursuant to subsection 3.]
(d) If they are ascertainable, the odds, for a given consumer, of receiving the item.
(e) If a consumer is to receive fewer than all the items described by the seller:
(1) The manner in which the seller decides which item a given consumer is to receive.
(2) If they are ascertainable, the odds, for a given consumer, of receiving each item described.
(3) The name and address of each person who has, during the preceding 12 months or any portion thereof in which the seller has done business, received the item having the greatest value and the item with the smallest odds of being received.
2. [Provide the following information to the consumer at the time of the solicitation:
(a) The complete address of the location and the telephone number from which the consumer is being called and, if different, the complete address of the principal location at which the seller does business.
(b) The information required by paragraphs (a) and (c) of subsection 1.
(c) If the seller elects to inform the consumer of the value or worth of the item, the information must be identical to that submitted pursuant to paragraph (b) of subsection 1, in exactly the form submitted.
(d) If the consumer is to receive fewer than all the items described by the seller, the information required by subparagraph (1) of paragraph (e) of subsection 1.
3. Advise the consumer, at the time of the solicitation, that he may obtain, without cost, a written statement of the terms and conditions he must satisfy in order to receive the item. If the consumer so requests, the seller shall send him such a statement, by mail, without cost to the consumer.] A registrant who uses a chance promotion shall:
(a) Furnish to the division such information as is necessary to establish the financial ability of the registrant to award all of the premiums to be given to consumers in the promotion;
(b) Award all premiums included in the promotion to bona fide recipients not later than 12 months after the date on which the promotion begins; and
(c) Deliver the premiums to those recipients within a reasonable time.
Sec. 33 NRS 599B.190 is hereby amended to read as follows:
599B.190 1. Except as otherwise provided in subsection 3, a person who purchases goods or services , [or] makes a donation or is promised a premium pursuant to a solicitation governed by this chapter must be given a refund or replacement, at his option, if:
(a) The premium or the goods or services are defective, are not as represented or [if any item described pursuant to NRS 599B.180 is] are not received as promised; and
(b) He returns the unused goods, if any, or makes a written request for the refund or replacement within 30 days after he receives:
(1) The goods or services; or
(2) Any item described [pursuant to] in subsection 1 of NRS 599B.180,
whichever is received later. A return or request is timely if shipment is made or the request is postmarked, properly addressed and postage prepaid, within the time provided by this paragraph.
2. A registrant who receives a written request for a refund or replacement shall not require prior authorization for a return of goods and shall give a refund or replacement within 14 days after receipt of the request.
3. If a consumer of goods returns only a portion of the goods, the refund or replacement required by subsection 1 may be prorated accordingly.
4. The refund or replacement required by subsection 1 must be given by the seller, regardless of whether payment for the goods or services is made to the seller or some other person.
5. Except for any proration permitted by subsection 3, a registrant shall not impose any charge in connection with a return of goods or a request for a refund or replacement.
6. If a registrant receives payment by credit card, he may issue a refund in the form of a credit to the credit card account of the consumer in lieu of a cash refund.
7. Within 3 days after any purchase of goods or services or upon delivery of the goods or services, whichever is later, or within 3 days after receiving a donation, the seller shall provide the consumer with a written summary of the provisions of this section. The summary must:
(a) Be made in a form prescribed by the division.
(b) Include the address to which returned goods or a request for refund may be sent.
(c) Be accompanied by a statement containing the information required by paragraph (e) of subsection 1 of NRS 599B.180, if the provisions of that section apply.
[(d) If the provisions of paragraph (c) of subsection 2 of NRS 599B.180 apply, be accompanied by a statement concerning the number of persons who have, during the 12 months preceding the solicitation or any portion thereof in which the seller has done business, received the item having the greatest value and the item with the smallest odds of being received.]
A summary is timely if it is postmarked, properly addressed and postage prepaid, within the time provided by this subsection.
Sec. 34 NRS 599B.197 is hereby amended to read as follows:
599B.197 1. A seller or salesman engaged in a recovery service shall not charge or receive any money or other valuable consideration from a consumer [before full and complete performance of the service which the seller or salesman has agreed to perform for or on behalf of the consumer.] for the recovery of any money paid by, or any item of value promised to, the consumer in a previous solicitation governed by the provisions of this chapter, until at least 7 business days after the money or item is actually delivered to the consumer.
2. The provisions of this section do not apply to services provided to a consumer by a licensed attorney to recover or otherwise assist in the recovery of any money paid by, or any item of value promised to, the consumer in a previous solicitation governed by the provisions of this chapter.
Sec. 35 NRS 598.285, 598.850, 599B.170, 599B.185 and 599B.187 are hereby repealed.
Sec. 36 The amendatory provisions of this act do not apply to offenses that are committed before July 1, 1997.
Sec. 37 The provisions of subsection 1 of NRS 354.599 do not apply to any additional expenses of a local government that are related to the provisions of this act.
Sec. 38 This act becomes effective on July 1, 1997.

LEADLINES OF REPEALED SECTIONS

598.285 Bond: Amount; actions; liability of surety; enforcement by division.
598.850 Security required; action for interpleader against claimants; hearing; records.
599B.170 Required disclosures by salesman; restrictions on representations regarding premiums.
599B.185 Required disclosures when registrant solicits sale of investments.
599B.187 Requirements for use of chance promotion.