CONSUMER PROTECTION BILL PASSES THE HOUSE
Mr. Speaker: HB182 is a small, one-page bill, about small dollar checks that cause big headaches for Alaska consumers. The checks are maybe for only three or four dollars and, according to the Department of Law, the checks are sent to thousands of businesses and individuals throughout our state.
The good news? The checks are legitimate. The bad news? The checks are “legitimate.” In actuality, cashing one of these checks can amount to an unintended contract. Hundreds of Alaskans cash these little checks, only to find themselves obligated by contract for products and services they don’t want and never needed.
Let me give you an example. Last year, the Alaska Department of Law announced a settlement with a California-based company that sent Alaskans what appeared to be rebates from local yellow page companies. Not so. Endorsement of a check for $3.49 was actually a contract for $179 in advertising services – which they didn’t want and didn’t need.
Consumers, who thought they were getting a very small windfall, got a much larger downfall. That’s because they didn’t see the tiny, fine print, disclosure on the back of the check. Or, if they did see it, they didn’t have a magnifying glass. And when the checks are endorsed, consumers end up getting billed - and sometimes hounded - by collection agencies, and damage to their credit rating.
The Consumer Protection Unit of the Alaska Department of Law considers these promotional checks to be a classic example of deceptive acts or practices -
and believe that prohibiting these kinds of checks is the only effective method of preventing these unintended contracts, and subsequent charges, from occurring.
HB 182 makes these kinds of promotional checks an unfair or deceptive act or practice, and makes it an automatic violation of Consumer Protection laws.
Under this bill, companies that violate the law are subject to a civil penalty of a minimum of $1,000 per violation, and a maximum of $25,000 per violation.
I am honored that the Alaska Department of Law let me know about these deceptive checks, and agree with them that HB182 is high priority consumer protection legislation.
Your support of this bill is respectfully requested.