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NEW MAINE LAW REQUIRES WRITTEN DISCLOSURES FOR NEGATIVE OPTION SALES MADE OVER TELEPHONE
October 3, 2001
OCTOBER 3, 2001
CONTACT: Charles Dow, Director, Communications And Legislative Affairs 207-626-8577
"If you like the product, simply keep it, and we will bill your credit card," says the telemarketer. "Not so fast," says the Maine Legislature.
The Maine Legislature last spring passed a new consumer protection law to regulate "negative option sales," so-called because the sale is completed when the consumer fails to act to prevent it. Telemarketers may no longer charge a consumer for a good or service after a trial period unless they send the consumer, at least 15 days prior to any charge, a clearly written description of the good or service being purchased, the amount to be charged, and the calendar date the consumer will be charged for the good or service if the consumer does not cancel the sale. This notice also must provide the specific steps by which the consumer can cancel the agreement by both mail and telephone. Failure to provide the required notices constitutes a violation of the Unfair Trade Practices Act, which can be enforced by the Attorney General or by private parties.
The new law does not apply to sales under $25 or to sales of credit, insurance, or securities.
The Attorney General's Office drafted and proposed the bill in response to many complaints from consumers who claimed they never agreed to be billed for goods or services sold over the telephone.
Attorney General Steven Rowe warned that the increased convenience of credit cards and telephone sales must be balanced by increased consumer vigilance. "We all must read our credit card statements and scan our mail carefully. My office will enforce the law, but people need to report violations to us." The phone number at the AG's Office is 626-8800.
Assistant Attorney General James McKenna of the AG's Public Protection Division said, "Consumer protection laws are great, but having them is not like having barking guard dogs in your financial dooryard. It is more like having a cop down the street. It does not relieve us of our personal responsibility to watch our wallets."