Analysis

Topic: Home Solicitation Sales

Sponsors: Representatives Rick Johnson and Paul Wojno

Description of the Bills: House Bill 4644 amends the Michigan Consumer Protection Act by adding a new item to the list of unfair, unconscionable, or deceptive methods, acts, or practices in Section 3. Under the amendment having an independent courier service or other third party pick up a payment on a home solicitation sale during the period the consumer is entitled to cancel the sale would be prohibited under the Consumer Protection Act.

House Bill 4645 amends the Home Solicitation Sales Act by prohibiting a seller from sending an independent courier service or other third party to pick up a buyer's payment at the buyer's residence until after the buyer's residence until after the buyer's right to revoke has expired. The bill also requires that the home solicitation sales agreement contain language advising the consumer that the seller is prohibited from having a independent courier service or other third party pick up the buyer's payment at his or her residence before the end of the cancellation period.

House Bill 4644 is tie-barred to House Bill 4645. However, House Bill 4645 is not tie-barred to House Bill 4644.

Position: The Department of Consumer and Industry Services supports the bills.

Background: The Home Solicitation Sales Act covers the sale of goods or services of more than $25 in which the seller or someone acting on the seller's behalf sells a product or service to the buyer at his or her residence. Under the act a home sale (which can occur by written or telephonic means as well as on the premises) may be canceled by the buyer within three days of the sale. Unscrupulous sellers occasionally try to put pressure on the buyer during this "cooling off" period" by sending a courier to pick up payment.

Arguments

For:
This is a necessary and reasonable extension of the protections afforded to a consumer pertaining to home sales. Consumers deserve protection from the high pressure tactics of some salespersons. The "cooling off period" provided in the Home Solicitation Sales Act was intended to provide the consumer with a period of time in which to sleep on the purchase decision and to give the consumer an opportunity to reconsider. A few sellers have tried to circumvent the "cooling off period" by sending a courier to the purchaser's home to pick up payment before the end of the cancellation window.

Against:
The methods which this bill is designed to prevent are infrequent. There will always be unscrupulous people who will attempt to take advantage of consumers. If one loophole is closed, there will always be another one. For instance, the bill prevents a seller from sending a courier or third party to pick up a payment at the buyer's residence during the "cooling off period", but it does not prevent the seller from trying to collect the payment somewhere else. Fortunately, the language in the Consumer Protection Act does not include a reference to the buyer's residence. This may close that loophole, at least to the extent of permitting action under the Consumer Protection Act if a seller tried to collect from the buyer at his or her workplace during the "cooling off period".

Support/Opposition: The department is unaware of any official positions taken by individuals or organizations on this legislation.

Fiscal Impact: The bill does not affect the Department of Consumer and Industry Services. The bill may have a small impact on the Attorney General Consumer Protection Division by expanding the scope of the Michigan Consumer Protection Act.

Administrative Rules Impact: There is no authority to promulgate administrative rules related to either of the acts being amended.