HF 1583

2nd Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to consumer protection; regulating membership
travel contracts; amending Minnesota Statutes 2004,
sections 325G.50; 325G.505, subdivision 3; 325G.51;
proposing coding for new law in Minnesota Statutes,
chapter 325G.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 325G.50, is
amended to read:

325G.50 MEMBERSHIP TRAVEL CONTRACTS; CANCELLATION.

Subdivision 1.

Definitions.

new text begin (a) new text end For purposes of this
section and deleted text begin section deleted text end new text begin sections 325G.501 and new text end 325G.505, the
following terms have the meanings given them:

deleted text begin (a) deleted text end new text begin (1) new text end "Membership travel contract" or "contract" means an
agreement offered or sold in this state evidencing a buyer's
right to make travel arrangements from or through a membership
travel operator and includes a membership that provides for this
use.

deleted text begin (b) deleted text end new text begin (2) new text end "Membership travel operator" means a person
offering or selling membership travel contracts paid for by a
fee or periodic payments.

deleted text begin (c) deleted text end new text begin (3) new text end "Travel arrangements" means travel reservations or
accommodations, tickets for domestic or foreign travel by air,
rail, ship, bus, or other medium of transportation, or hotel or
other lodging accommodations for members.

new text begin (4) "Date of consummation of service" means the date on
which the buyer of the contract is provided with all materials
necessary to allow the buyer to make travel arrangements that
are the subject of the contract and is provided all materials
explaining the buyer's rights, obligations, benefits, and
restrictions under the membership travel contract.
new text end

new text begin (5) "Gift" means a prize, award, rebate, bonus, coupon,
credit, voucher, or other item of value offered or provided to a
consumer as part of the solicitation to purchase a membership
travel contract.
new text end

new text begin (b) The definitions in paragraph (a) do not apply to the
offer, sale, exchange, or other use of a timeshare interest, as
defined in section 83.20, subdivision 13.
new text end

Subd. 2. [BUYER'S RIGHT TO CANCEL.] In addition to other
rights the buyer may have, the buyer may cancel a membership
travel contract until midnight of the tenth business day after
the deleted text begin day on which the contract was signed by the buyer deleted text end new text begin date of
consummation of service for the contract new text end .

To be effective, a notice of cancellation must be given by
the buyer in writing to the membership travel operator at the
operator's address. This address must be included in the
membership travel contract. The notice, if given by mail, is
effective upon deposit in a mailbox, properly addressed to the
operator and postage prepaid. The notice is sufficient if it
shows, by any form of written expression, the buyer's intention
not to be bound by the membership travel contract.

Cancellation is without liability on the part of the buyer
and the buyer is entitled to a refund, within ten days after
notice of cancellation is given, of the entire consideration
paid for the contract. Rights of cancellation may not be waived
or otherwise surrendered.

Subd. 3.

Written notice to members.

A copy of the
contract must be delivered to the buyer at the time the contract
is signed. The contract must be in writing, must be signed by
the buyer, must designate the date on which the buyer signed the
contract, and must state, clearly and conspicuously, in boldface
type of a minimum size of 14 points immediately adjacent to the
buyer's signature, the following:

"MEMBERS' RIGHT TO CANCEL

If you wish to cancel this contract, you may cancel by
delivering or mailing a written notice to the membership travel
operator. The notice must say that you do not wish to be bound
by the contract and must be delivered or mailed before midnight
of the tenth business day after you sign this contract. The
notice must be delivered or mailed to: (Insert name and mailing
address of membership travel operator). If you cancel, the
membership travel operator will return, within ten days of the
date on which you give notice of cancellation, any payments you
have made. new text begin Your right to cancel continues until midnight of the
tenth business day after the day on which you are provided with
all materials necessary to allow you to make travel arrangements
and all materials that explain your rights, obligations,
benefits, and restrictions under the contract. new text end "

Subd. 3a.

Oral notice to members.

At the time the
contract is signed by the buyer, the membership travel operator
shall orally inform the buyer of the buyer's right to cancel the
contract deleted text begin within ten business days of the contract signing
deleted text end new text begin described in subdivision 2 new text end .

Subd. 4.

Cancellation at any time.

(a) A contract which
does not contain the notice specified in subdivision 3 may be
canceled by the buyer at any time by giving notice of
cancellation by any means.

(b) If the oral notice required by subdivision 3a has not
been given to the buyer at the time the contract was signed, the
buyer may cancel the contract at any time by giving notice of
cancellation by any means.

new text begin (c) If the buyer has a continuing right to cancel under
this subdivision, the membership travel operator, or any
affiliate or successor to the membership travel operator, shall
not solicit the buyer to enter into a new contract, unless
before the solicitation, the membership travel operator provides
the following:
new text end

new text begin (1) at the same time as the initial written solicitation to
enter a new contract, a written notice on a separate sheet of
paper that in boldface type of a minimum size of 14 points
states the following:
new text end

new text begin "RIGHT TO CANCEL
new text end

new text begin You have the right to cancel the contract that you
previously entered with (name of membership travel operator).
If you cancel the contract with (name of membership travel
operator), you have the right to receive a refund of all money
paid for the contract. You also will not be required to make
any further payments under that contract.
new text end

new text begin This is an attempt to solicit you to enter a new contract.
new text end

new text begin If you would like more information concerning Minnesota
laws governing membership travel contracts, please contact the
Minnesota Attorney General's Office at (the Minnesota Attorney
General's Office address and telephone number)."; and
new text end

new text begin (2) at the same time as the initial oral solicitation to
enter a new contract, an oral notice that clearly reiterates the
statement contained in clause (1).
new text end

new text begin The attorney general shall provide a number for insertion
into this notice on request of the membership travel operator.
new text end

Sec. 2.

new text begin [325G.501] MEMBERSHIP TRAVEL CONTRACTS
SOLICITATION GIFT OFFERS.
new text end

new text begin (a) No membership travel operator shall offer a gift,
either directly or indirectly, to a person in Minnesota unless
the membership travel operator clearly discloses the following
information at the same time and in the same manner and
prominence as the offer of the gift:
new text end

new text begin (1) the true name or names of the travel club operator and
the address of the travel club operator's principal place of
business;
new text end

new text begin (2) the estimated retail value of the gift, which must not
be more than twice the direct cost to the membership travel
operator for the gift;
new text end

new text begin (3) any requirement that the person receiving the notice
pay taxes, refundable or nonrefundable deposits, or any other
charges to obtain or use a gift, including the nature and amount
of the charges;
new text end

new text begin (4) if receipt of the gift is subject to a requirement that
the person attend a meeting with the travel club operator for
the purpose of soliciting the person to enter into a membership
travel contract, a statement that the requirement applies, a
description of the membership travel contract the membership
travel operator wishes to sell, the approximate length of the
meeting, and the requested price for the membership travel
contract;
new text end

new text begin (5) any limitations on eligibility to receive the gift; and
new text end

new text begin (6) if use of the gift is subject to any restrictions,
including, but not limited to, travel restrictions, a statement
that a restriction applies, and a detailed description of the
restriction.
new text end

Sec. 3.

Minnesota Statutes 2004, section 325G.505,
subdivision 3, is amended to read:

Subd. 3.

Oral disclosures.

A membership travel operator
shall orally disclose to any prospective purchaser, before a
membership travel contract is executed by the prospective
purchaser, the information in the public offering statement as
required in subdivision 2, deleted text begin clauses (1), (2), and (3), deleted text end and
whether the membership travel operator uses a third-party travel
agent or membership travel operator to make travel arrangements
provided for in the contract.

Sec. 4.

Minnesota Statutes 2004, section 325G.51, is
amended to read:

325G.51 PENALTIES; REMEDIES.

A person who violates deleted text begin section deleted text end new text begin sections new text end 325G.50 deleted text begin or deleted text end new text begin to
new text end 325G.505 is subject to the penalties and remedies provided in
section 8.31. new text begin The relief provided in this subdivision is in
addition to remedies or penalties otherwise provided by law.
new text end