THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY CREIGHTON, BEYER, BOYD, EVERETT, FREEMAN, GEIST, GEORGE, GROVE, HARHART, HARPER, HELM, HENNESSEY, HESS, KOTIK, MANDERINO, MANN, METZGAR, MILLER, MOUL, MURT, M. O'BRIEN, PALLONE, PHILLIPS, DENLINGER, RAPP, REICHLEY, SANTONI, SIPTROTH, STURLA, SWANGER AND WANSACZ, MAY 7, 2009

REFERRED TO COMMITTEE ON COMMERCE, MAY 7, 2009  

AN ACT

Amending Titles 18 (Crimes and Offenses) and 42 (Judiciary and

Judicial Procedure) of the Pennsylvania Consolidated

Statutes, further providing for deceptive or fraudulent

business practices; and providing for damages for

misrepresentation of home loan principal, outstanding balance

or interest.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 4107(a) and (a.1) of Title 18 of the

Pennsylvania Consolidated Statutes are amended to read:

§ 4107.  Deceptive or fraudulent business practices.

(a)  Offense defined.--A person commits an offense if, in the

course of business, the person:

(1)  uses or possesses for use a false weight or measure,

or any other device for falsely determining or recording any

quality or quantity;

(2)  sells, offers or exposes for sale, or delivers less

than the represented quantity of any commodity or service;

(3)  takes or attempts to take more than the represented

quantity of any commodity or service when as buyer he

furnishes the weight or measure;

(4)  sells, offers or exposes for sale adulterated or

mislabeled commodities. As used in this paragraph, the term

"adulterated" means varying from the standard of composition

or quality prescribed by or pursuant to any statute providing

criminal penalties for such variance or set by established

commercial usage. As used in this paragraph, the term

"mislabeled" means varying from the standard of trust or

disclosure in labeling prescribed by or pursuant to any

statute providing criminal penalties for such variance or set

by established commercial usage;

(5)  makes a false or misleading statement in any

advertisement addressed to the public or to a substantial

segment thereof for the purpose of promoting the purchase or

sale of property or services;

(6)  makes or induces others to rely on a false or

misleading written statement for the purpose of obtaining

property or credit;

(7)  makes or induces others to rely on a false or

misleading written statement for the purpose of promoting the

sale of securities, or omits information required by law to

be disclosed in written documents relating to securities;

(8)  makes or induces others to rely on a false or

misleading material statement to induce an investor to invest

in a business venture. The offense is complete when any false

or misleading material statement is communicated to an

investor regardless of whether any investment is made. For

purposes of grading, the "amount involved" is the amount or

value of the investment solicited or paid, whichever is

greater. As used in this paragraph, the following words and

phrases shall mean: "Amount" as used in the definition of

"material statement" includes currency values and comparative

expressions of value, including, but not limited to,

percentages or multiples. "Business venture" means any

venture represented to an investor as one where he may

receive compensation either from the sale of a product, from

the investment of other investors or from any other

commercial enterprise. "Compensation" means anything of value

received or to be received by an investor. "Invest" means to

pay, give or lend money, property, service or other thing of

value for the opportunity to receive compensation. The term

also includes payment for the purchase of a product.

"Investment" means the money, property, service or other

thing of value paid or given, or to be paid or given, for the

opportunity to receive compensation. "Investor" means any

natural person, partnership, corporation, limited liability

company, business trust, other association, government

entity, estate, trust, foundation or other entity solicited

to invest in a business venture, regardless of whether any

investment is made. "Material statement" means a statement

about any matter which could affect an investor's decision to

invest in a business venture, including, but not limited to,

statements about:

(i)  the existence, value, availability or

marketability of a product;

(ii)  the number of former or current investors, the

amount of their investments or the amount of their former

or current compensation;

(iii)  the available pool or number of prospective

investors, including those who have not yet been

solicited and those who already have been solicited but

have not yet made an investment;

(iv)  representations of future compensation to be

received by investors or prospective investors; or

(v)  the source of former, current or future

compensation paid or to be paid to investors or

prospective investors.

"Product" means a good, a service or other tangible or

intangible property of any kind;

(9)  obtains or attempts to obtain property of another by

false or misleading representations made through

communications conducted in whole or in part by telephone

involving the following:

(i)  express or implied claims that the person

contacted has won or is about to win a prize;

(ii)  express or implied claims that the person

contacted may be able to recover any losses suffered in

connection with a prize promotion; or

(iii)  express or implied claims regarding the value

of goods or services offered in connection with a prize

or a prize promotion.

As used in this paragraph, the term "prize" means

anything of value offered or purportedly offered. The term

"prize promotion" means an oral or written express or implied

representation that a person has won, has been selected to

receive or may be eligible to receive a prize or purported

prize;

(10)  knowingly makes a false or misleading statement in

a privacy policy, published on the Internet or otherwise

distributed or published, regarding the use of personal

information submitted by members of the public; [or]

(11)  does either of the following when the person is in

a client relationship with a certified public accountant,

public accountant or public accounting firm:

(i)  provides false or misleading information to the

certified public accountant, public accountant or public

accounting firm in connection with performance of an

attestation function for the client which results in an

attestation by the certified public accountant, public

accountant or public accounting firm of a materially

misleading financial statement, audit, review or other

document; or

(ii)  fails to provide information to the certified

public accountant, public accountant or public accounting

firm which the person knows is material to the

performance of an attestation function and which results

in an attestation by the certified public accountant,

public accountant or public accounting firm of a

materially misleading financial statement, audit, review

or other document[.]; or

(12)  makes a false or misleading statement to a borrower

regarding the amount of principal, outstanding balance or

interest owed on a home loan.

(a.1)  Grading of offenses.--

(1)  A violation of this section, except for subsection

(a)(10) and (12), constitutes:

(i)  a felony of the third degree if the amount

involved exceeds $2,000;

(ii)  a misdemeanor of the first degree if the amount

involved is $200 or more but $2,000 or less;

(iii)  a misdemeanor of the second degree if the

amount involved is less than $200; or

(iv)  when the amount involved cannot be

satisfactorily ascertained, the offense constitutes a

misdemeanor of the second degree.

(2)  Amounts involved in deceptive or fraudulent business

practices pursuant to one scheme or course of conduct,

whether from the same person or several persons, may be

aggregated in determining the grade of the offense.

(3)  Where a person commits an offense under subsection

(a) and the victim of the offense is 60 years of age or

older, the grading of the offense shall be one grade higher

than specified in paragraph (1).

(4)  An offense under subsection (a)(10) shall be a

summmary offense and shall be punishable by a fine not less

than $50 and not to exceed $500.

(5)  An offense under subsection (a)(12) shall be a

felony of the third degree if the amount involved exceeds

$2,000 and shall be punishable by a term of imprisonment, the

minimum of which shall be not less than five years.

* * *

Section 2.  Title 42 is amended by adding a section to read:

§ 8304.1.  Damages for misrepresentation of home loan principal,

outstanding balance or interest.

(a)  General rule.--In a civil action to recover damages and

costs following a conviction for a deceptive or fraudulent

business practice pursuant to 18 Pa.C.S. § 4107(a)(12) (relating

to deceptive or fraudulent business practices) and failure to

make full restitution, the borrower shall, upon obtaining

judgment, be entitled to recover damages in an amount equal to

triple the amount of the claim.

(b)  Restriction.--If partial restitution has been made,

damages recovered under this section may not exceed triple the

amount of the unpaid restitution.

Section 3.  This act shall take effect in 60 days.