PRIOR PRINTER'S NOS. 537, 1857, 1979, PRINTER'S NO. 3821
2032, 3405, 3598
No. 485 Session of 1975
Report of the Committee of Conference
To the Members of the House of Representatives and Senate:
We, the undersigned, Committee of Conference on the part of
the House of Representatives and Senate for the purpose of
considering House Bill No. 485, entitled:
"An act reenacting and amending the act of December 17, 1968
(P.L.1224, No.387), entitled 'An act prohibiting unfair methods
of competition and unfair or deceptive acts or practices in the
conduct of any trade or commerce, giving the Attorney General
and District Attorneys certain powers and duties and providing
penalties,' prohibiting additional unfair methods of competition
and unfair or deceptive acts or practices, and giving additional
powers and rights to consumers."
respectfully submit the following bill as our report:
JAMES J. MANDERINO
C. L. SCHMITT
CHARLES F. MEBUS
(Committee on the part of the House of Representatives.)
EDWARD P. ZEMPRELLI
AUSTIN J. MURPHY
JOHN STAUFFER
(Committee on the part of the Senate.)
AN ACT
1 Reenacting and amending the act of December 17, 1968 (P.L.1224,
2 No.387), entitled "An act prohibiting unfair methods of
3 competition and unfair or deceptive acts or practices in the
4 conduct of any trade or commerce, giving the Attorney General
5 and District Attorneys certain powers and duties and
6 providing penalties," prohibiting additional unfair methods
7 of competition and unfair or deceptive acts or practices, and
8 giving additional powers and rights to consumers.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. The act of December 17, 1968 (P.L.1224, No.387),
12 known as the "Unfair Trade Practices and Consumer Protection
13 Law," is reenacted and amended to read:
14 Section 1. Short Title.--This act shall be known and may be
15 cited as the "Unfair Trade Practices and Consumer Protection
16 Law."
17 Section 2. Definitions.--As used in this act.
18 (1) "Documentary material" means the original or a copy of
19 any book, record, report, memorandum, paper, communication,
20 tabulation, map, chart, photograph, mechanical transcription or
21 other tangible document or recording, wherever situate.
22 (2) "Person" means natural persons, corporations, trusts,
23 partnerships, incorporated or unincorporated associations, and
24 any other legal entities.
25 (3) "Trade" and "commerce" mean the advertising, offering
26 for sale, sale or distribution of any services and any property,
27 tangible or intangible, real, personal or mixed, and any other
28 article, commodity, or thing of value wherever situate, and
29 includes any trade or commerce directly or indirectly affecting
30 the people of this Commonwealth.
31 (4) "Unfair methods of competition" and "unfair or deceptive
32 acts or practices" mean any one or more of the following:
1 (i) Passing off goods or services as those of another;
2 (ii) Causing likelihood of confusion or of misunderstanding
3 as to the source, sponsorship, approval or certification of
4 goods or services;
5 (iii) Causing likelihood of confusion or of misunderstanding
6 as to affiliation, connection or association with, or
7 certification by, another;
8 (iv) Using deceptive representations or designations of
9 geographic origin in connection with goods or services;
10 (v) Representing that goods or services have sponsorship,
11 approval, characteristics, ingredients, uses, benefits or
12 quantities that they do not have or that a person has a
13 sponsorship, approval, status, affiliation or connection that he
14 does not have;
15 (vi) Representing that goods are original or new if they are
16 deteriorated, altered, reconditioned, reclaimed, used or
17 secondhand;
18 (vii) Representing that goods or services are of a
19 particular standard, quality or grade, or that goods are of a
20 particular style or model, if they are of another;
21 (viii) Disparaging the goods, services or business of
22 another by false or misleading representation of fact;
23 (ix) Advertising goods or services with intent not to sell
24 them as advertised;
25 (x) Advertising goods or services with intent not to supply
26 reasonably expectable public demand, unless the advertisement
27 discloses a limitation of quantity;
28 (xi) Making false or misleading statements of fact
29 concerning the reasons for, existence of, or amounts of price
30 reductions;
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1 (xii) Promising or offering prior to time of sale to pay,
2 credit or allow to any buyer, any compensation or reward for the
3 procurement of a contract [of purchase with others;] for
4 purchase of goods or services with another or others, or for the
5 referral of the name or names of another or others for the
6 purpose of attempting to procure or procuring such a contract of
7 purchase with such other person or persons when such payment,
8 credit, compensation or reward is contingent upon the occurrence
9 of an event subsequent to the time of the signing of a contract
10 to purchase;
11 (xiii) [Engaging in any other fraudulent conduct which
12 creates a likelihood of confusion or of misunderstanding.]
13 Promoting or engaging in any plan by which goods or services
14 are sold to a person for a consideration and upon the further
15 consideration that the purchaser secure or attempt to secure one
16 or more persons likewise to join the said plan; each purchaser
17 to be given the right to secure money, goods or services
18 depending upon the number of persons joining the plan. In
19 addition, promoting or engaging in any plan, commonly known as
20 or similar to the so-called "Chain-Letter Plan" or "Pyramid
21 Club." The terms "Chain-Letter Plan" or "Pyramid Club" mean any
22 scheme for the disposal or distribution of property, services or
23 anything of value whereby a participant pays valuable
24 consideration, in whole or in part, for an opportunity to
25 receive compensation for introducing or attempting to introduce
26 one or more additional persons to participate in the scheme or
27 for the opportunity to receive compensation when a person
28 introduced by the participant introduces a new participant. As
29 used in this subclause the term "consideration" means an
30 investment of cash or the purchase of goods, other property,
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1 training or services, but does not include payments made for
2 sales demonstration equipment and materials for use in making
3 sales and not for resale furnished at no profit to any person in
4 the program or to the company or corporation, nor does the term
5 apply to a minimal initial payment of twenty-five dollars ($25)
6 or less;
7 (xiv) Failing to comply with the terms of any written
8 guarantee or warranty given to the buyer at, prior to or after a
9 contract for the purchase of goods or services is made;
10 (xv) Knowingly misrepresenting that services, replacements
11 or repairs are needed if they are not needed;
12 (xvi) Making repairs, improvements or replacements on
13 tangible, real or personal property, of a nature or quality
14 inferior to or below the standard of that agreed to in writing;
15 (xvii) Engaging in any other fraudulent conduct which
16 creates a likelihood of confusion or of misunderstanding.
17 Section 3. Unlawful Acts or Practices; Exclusions.--Unfair
18 methods of competition and unfair or deceptive acts or practices
19 in the conduct of any trade or commerce as defined by subclauses
20 (i) through (xvii) of clause (4) of section 2 of this act and
21 regulations promulgated under section 3.1 of this act are hereby
22 declared unlawful. The provisions of this act shall not apply to
23 any owner, agent or employe of any radio or television station,
24 or to any owner, publisher, printer, agent or employe of a
25 newspaper or other publication, periodical or circular, who, in
26 good faith and without knowledge of the falsity or deceptive
27 character thereof, publishes, causes to be published or takes
28 part in the publication of such advertisement.
29 Section 3.1. Regulations.--The Attorney General may adopt,
30 after public hearing, such rules and regulations as may be
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1 necessary for the enforcement and administration of this act.
2 Such rules and regulations when promulgated pursuant to the act
3 of July 31, 1968 (P.L.769, No.240), known as the "Commonwealth
4 Documents Law," shall have the force and effect of law.
5 Section 4. Restraining Prohibited Acts.--Whenever the
6 Attorney General, or a District Attorney, has reason to believe
7 that any person is using or is about to use any method, act or
8 practice declared by section 3 of this act to be unlawful, and
9 that proceedings would be in the public interest, he may bring
10 an action in the name of the Commonwealth against such person to
11 restrain by temporary or permanent injunction the use of such
12 method, act or practice. The action may be brought in the court
13 of common pleas of the county in which such person resides, has
14 his principal place of business, or is doing business, or may be
15 brought in the Commonwealth Court. The said courts are
16 authorized to issue temporary or permanent injunctions to
17 restrain and prevent violations of this act, and such
18 injunctions shall be issued without bond.
19 Section 4.1. Payment of Costs and Restitution.--Whenever any
20 court issues a permanent injunction to restrain and prevent
21 violations of this act as authorized in section 4 above, the
22 court may in its discretion provide for payment by defendant or
23 defendants to the Commonwealth of the court costs of the action.
24 In addition, the court may in its discretion direct that the
25 defendant or defendants restore to any person in interest any
26 moneys or property, real or personal, which may have been
27 acquired by means of any violation of this act, under terms and
28 conditions to be established by the court.
29 Section 5. Assurances of Voluntary Compliance.--In the
30 administration of this act, the Attorney General may accept an
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1 assurance of voluntary compliance with respect to any method,
2 act or practice deemed to be violative of the act from any
3 person who has engaged or was about to engage in such method,
4 act or practice. Such assurance may include a stipulation for
5 voluntary payment by the alleged violator providing for the
6 restitution by the alleged violator to consumers, of money,
7 property or other things received from them in connection with a
8 violation of this act. Any such assurance shall be in writing
9 and be filed with the court of common pleas in which the alleged
10 violator resides, has his principal place of business, or is
11 doing business, or the Commonwealth Court. Such assurance of
12 voluntary compliance shall not be considered an admission of
13 violation for any purpose. Matters thus closed may at any time
14 be reopened by the Attorney General for further proceedings in
15 the public interest, pursuant to section 4.
16 [Section 6. Civil Investigative Demand.--(a) Whenever the
17 Attorney General believes that any person may be in possession,
18 custody, or control of the original or a copy of any documentary
19 material relevant to the subject matter of an investigation of a
20 possible violation of this act, he may execute in writing and
21 cause to be served upon such a person a civil investigative
22 demand requiring such person to produce such documentary
23 material and permit inspection and copying; providing that this
24 section shall not be applicable to criminal prosecutions.
25 (b) Each such demand shall:
26 (1) State the statute and section thereof, the alleged
27 violation of which is under investigation, and the general
28 subject matter of the investigation;
29 (2) Describe the class or classes of documentary material to
30 be produced thereunder with reasonable specificity so as fairly
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1 to indicate the material demanded;
2 (3) Prescribe a return date within which the documentary
3 material is to be produced; and
4 (4) Identify the members of the Attorney General's staff to
5 whom such documentary material is to be made available for
6 inspection and copying.
7 (c) No such demand shall:
8 (1) Contain any requirement which would be unreasonable or
9 improper if contained in a subpoena duces tecum issued by a
10 court of this State; or
11 (2) Require the disclosure of any documentary material which
12 would be privileged, or which for any other reason would not be
13 required by a subpoena duces tecum issued by a court of this
14 State.
15 (d) Service of any such demand may be made by:
16 (1) Delivering a duly executed copy thereof to the person to
17 be served or to a partner or to any officer or agent authorized
18 by appointment or by law to receive service of process on behalf
19 of such person;
20 (2) Delivering a duly executed copy thereof to the principal
21 place of business in this State of the person to be served; or
22 (3) Mailing by registered or certified mail a duly executed
23 copy thereof addressed to the person to be served at the
24 principal place of business in this State, or, if said person
25 has no place of business in this State, to his principal office
26 or place of business.
27 (e) Documentary material demanded pursuant to the provisions
28 of this section shall be produced for inspection and copying
29 during normal business hours at the principal office or place of
30 business of the person served, or at such other times and places
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1 as may be designated by the Attorney General.
2 (f) No documentary material produced pursuant to a demand
3 under this section shall, unless otherwise ordered by a court
4 for good cause shown, be produced for inspection or copying by,
5 nor shall the contents thereof be disclosed to, any person other
6 than the authorized employe of the Attorney General without the
7 consent of the person who produced such material: Provided, That
8 under such reasonable terms and conditions as the Attorney
9 General shall prescribe, such documentary material shall be
10 available for inspection and copying by the person who produced
11 such material or any duly authorized representative of such
12 person. The Attorney General, or any attorney designated by him
13 may use such documentary material or copies thereof as he
14 determines necessary in the enforcement of this act, including
15 presentation before any court: Provided, That any such material
16 which contains trade secrets or other highly confidential matter
17 shall not be presented except with the approval of the court in
18 which the action is pending after adequate notice to the person
19 furnishing such material.
20 (g) At any time before the return date specified in the
21 demand, or within twenty days after the demand has been served,
22 whichever period is shorter, a petition to extend the return
23 date for, or to modify or set aside the demand, stating good
24 cause, may be filed in the court of common pleas of the county
25 where the parties reside or in the Commonwealth Court.
26 (h) A person upon whom a demand is served pursuant to the
27 provisions of this section shall comply with the terms thereof
28 unless otherwise provided by order of court. Any person who,
29 with intent to avoid, evade or prevent compliance, in whole or
30 in part, with any civil investigative demand under this section,
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1 removes from any place, conceals, withholds or destroys,
2 mutilates, alters or by any other means falsifies any
3 documentary material in the possession, custody or control of
4 any person subject of any such demand shall be guilty of an
5 offense against the Commonwealth of Pennsylvania, and shall be
6 subject, upon conviction thereof, to a fine not to exceed five
7 thousand dollars ($5,000), or to imprisonment for a term of not
8 more than one year, or both.
9 (i) Whenever any person fails to comply with any civil
10 investigative demand duly served upon him under this section or
11 whenever satisfactory copying or reproduction of any such
12 material cannot be done and such person refuses to surrender
13 such material, the Attorney General through such officers or
14 attorneys as he may designate, may file, in the court of common
15 pleas of the county in which such person resides, is found, or
16 transacts business, and serve upon such person a petition for an
17 order of such court for the enforcement of this section, except
18 that if such person transacts business in more than one county,
19 such petition shall be filed in the county in which such person
20 maintains his principal place of business, or in the
21 Commonwealth Court. Whenever any petition is filed in the court
22 of common pleas as authorized under this section, such court
23 shall have jurisdiction to hear and determine the matter so
24 presented, and to enter such order or orders as may be required
25 to carry into effect the provisions of this section. Any final
26 order so entered shall be subject to appeal to the Pennsylvania
27 Supreme Court.]
28 Section 7. [Avoidance of Contract or Sale.--Where
29 merchandise having a sale price of twenty-five dollars ($25) or
30 more is sold or contracted to be sold to a consumer, as a result
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1 of, or in connection with, a direct contract with or call on the
2 consumer at his residence, that consumer may avoid the contract
3 or sale by notifying, in writing, the seller within two full
4 business days following the day on which the contract or sale
5 was made and by returning or holding available for return to the
6 seller, in its original condition, any merchandise received
7 under the contract or sale. The time period provided for in this
8 section does not begin to run unless and until the consumer is
9 furnished the address at which notice to the seller can be
10 given. If these conditions are met, the seller must return to
11 the consumer the full amount of any payment made or
12 consideration given under the contract. As used in this section,
13 merchandise shall not be construed to mean real property.]
14 Contracts; Effect of Rescission.--(a) Where goods or services
15 having a sale price of twenty-five dollars ($25) or more are
16 sold or contracted to be sold to a buyer, as a result of, or in
17 connection with, a contact with or call on the buyer at his
18 residence, that consumer may avoid the contract or sale by
19 notifying, in writing, the seller within three full business
20 days following the day on which the contract or sale was made
21 and by returning or holding available for return to the seller,
22 in its original condition, any merchandise received under the
23 contract or sale. Such notice of rescission shall be effective
24 upon depositing the same in the United States mail or upon other
25 service which gives the seller notice of rescission.
26 (b) At the time of the sale or contract the buyer shall be
27 provided with:
28 (1) A fully completed receipt or copy of any contract
29 pertaining to such sale, which is in the same language (Spanish,
30 English, etc.) as that principally used in the oral sales
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1 presentation, and also in English, and which shows the date of
2 the transaction and contains the name and address of the seller,
3 and in immediate proximity to the space reserved in the contract
4 for the signature of the buyer or on the front page of the
5 receipt if a contract is not used and in bold face type of a
6 minimum size of ten points, a statement in substantially the
7 following form:
8 "You, the buyer, may cancel this transaction at any time
9 prior to midnight of the third business day after the
10 date of this transaction. See the attached notice of
11 cancellation form for an explanation of this right."
12 (2) A completed form in duplicate, captioned "Notice of
13 Cancellation," which shall be attached to the contract or
14 receipt and easily detachable, and which shall contain in ten-
15 point bold face type the following information and statements in
16 the same language (Spanish, English, etc.) as that used in the
17 contract:
18 Notice of Cancellation
19 (Enter Date of Transaction)
20 You may cancel this transaction, without any penalty
21 or obligation, within three business days from the above
22 date.
23 If you cancel, any property traded in, any payments
24 made by you under the contract or sale, and any
25 negotiable instrument executed by you will be returned
26 within ten business days following receipt by the seller
27 of your cancellation notice, and any security interest
28 arising out of the transaction will be cancelled.
29 If you cancel, you must make available to the seller
30 at your residence in substantially as good condition as
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1 when received, any goods delivered to you under this
2 contract or sale; or you may, if you wish, comply with
3 the instructions of the seller regarding the return
4 shipment of the goods at the seller's expense and risk.
5 If you do make the goods available to the seller and
6 the seller does not pick them up within twenty days of
7 the date of your notice of cancellation, you may retain
8 or dispose of the goods without any further obligation.
9 If you fail to make the goods available to the seller,
10 or if you agree to return the goods to the seller and
11 fail to do so, then you remain liable for performance of
12 all obligations under the contract.
13 To cancel this transaction, mail or deliver a signed
14 and dated copy of this cancellation notice or any other
15 written notice, or send a telegram, to (name of seller),
16 at (address of seller's place of business) not later
17 than midnight of (date).
18 I hereby cancel this transaction.
19 ...........................
20 (Date)
21 ..............................
22 Buyer's Signature
23 (c) Before furnishing copies of the "Notice of Cancellation"
24 to the buyer, both copies shall be completed by entering the
25 name of the seller, the address of the seller's place of
26 business, the date of the transaction, and the date, not earlier
27 than the third business day following the date of the
28 transaction, by which the buyer may give notice of cancellation.
29 (d) Each buyer shall be informed at the time he signs the
30 contract or purchases the goods or services, of his right to
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1 cancel.
2 (e) The cancellation period provided for in this section
3 shall not begin to run until buyer has been informed of his
4 right to cancel and has been provided with copies of the "Notice
5 of Cancellation."
6 (f) Seller shall not misrepresent in any manner the buyer's
7 right to cancel.
8 (g) Any valid notice of cancellation by a buyer shall be
9 honored and within ten business days after the receipt of such
10 notice, seller shall (i) refund all payments made under the
11 contract or sale; (ii) return any goods or property traded in,
12 in substantially as good condition as when received by the
13 seller; (iii) cancel and return any negotiable instrument
14 executed by the buyer in connection with the contract or sale
15 and take any action necessary or appropriate to terminate
16 promptly any security interest created in the transaction.
17 (h) No note or other evidence of indebtedness shall be
18 negotiated, transferred, sold or assigned by the seller to a
19 finance company or other third party prior to midnight of the
20 fifth business day following the day the contract was signed or
21 the goods or services were purchased.
22 (i) Seller shall, within ten business days of receipt of the
23 buyer's notice of cancellation, notify him whether the seller
24 intends to repossess or to abandon any shipped or delivered
25 goods. If seller elects to repossess, he must do so within
26 twenty days of the date of buyer's notice of cancellation or
27 forfeit all rights to the delivered goods.
28 (j) Rights afforded under this section may be waived only in
29 circumstances where the goods or services are needed to meet a
30 bona fide immediate personal emergency of the buyer and the
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1 buyer furnishes the seller with a separate dated and signed
2 personal statement in the buyer's handwriting describing the
3 situation requiring immediate remedy and expressly acknowledging
4 and waiving the right to cancel the sale within three business
5 days.
6 (k) As used in this section, merchandise shall not be
7 construed to mean real property.
8 (l) The provisions of this section shall not apply to the
9 sale or contract for the sale of goods or services having a sale
10 price of less than twenty-five dollars ($25).
11 (m) A "Notice of Cancellation" which contains the form and
12 content required by rule or regulation of the Federal Trade
13 Commission shall be deemed to be in compliance with the
14 requirements of this section.
15 Section 8. Civil Penalties.--(a) Any person who violates the
16 terms of an injunction issued under section 4 of this act or any
17 of the terms of an assurance of voluntary compliance duly filed
18 in court under section 5 of this act shall forfeit and pay to
19 the Commonwealth a civil penalty of not more than five thousand
20 dollars ($5,000) for each violation. For the purposes of this
21 section the court [of common pleas] issuing an injunction or in
22 which an assurance of voluntary compliance is filed shall retain
23 jurisdiction, and the cause shall be continued; and, in such
24 cases, the Attorney General, or the appropriate District
25 Attorney, acting in the name of the Commonwealth of
26 Pennsylvania, may petition for recovery of civil penalties and
27 any other equitable relief deemed needed or proper.
28 (b) In any action brought under section 4 of this act, if
29 the court finds that a person, firm or corporation is wilfully
30 using or has wilfully used a method, act or practice declared
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1 unlawful by section 3 of this act, the Attorney General or the
2 appropriate District Attorney, acting in the name of the
3 Commonwealth of Pennsylvania, may recover, on behalf of the
4 Commonwealth of Pennsylvania, a civil penalty of not exceeding
5 one thousand dollars ($1,000) per violation, which civil penalty
6 shall be in addition to other relief which may be granted under
7 sections 4 and 4.1 of this act.
8 Section 9. Forfeiture of [Corporate] Franchise or Right to
9 Do Business; Appointment of Receiver.-- Upon petition by the
10 Attorney General the court [of common pleas of the county]
11 having jurisdiction, [as hereinbefore authorized,] may, in its
12 discretion, order the dissolution, [or] suspension or forfeiture
13 of the franchise or right to do business of any person, firm or
14 corporation which violates the terms of an injunction issued
15 under section 4 of this act. In addition, the court may appoint
16 a receiver of the assets of the company.
17 Section 9.1. Powers of Receiver.--When a receiver is
18 appointed by the court pursuant to this act, he shall have the
19 power to sue for, collect, receive and take into his possession
20 all the goods and chattels, rights and credits, moneys, and
21 effects, lands and tenements, books, records, documents, papers,
22 choses in action, bills, notes and property of every description
23 of the person or persons for whom the receiver is appointed,
24 received by means of any practice declared to be illegal and
25 prohibited by this act, including property with which such
26 property has been mingled if it cannot be identified in kind
27 because of such commingling, and to sell, convey, and assign the
28 same and hold and dispose of the proceeds thereof under the
29 direction of the court. Any person who has suffered damages as a
30 result of the use or employment of any unlawful practices and
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1 submits proof to the satisfaction of the court that he has in
2 fact been damaged, may participate with general creditors in the
3 distribution of the assets to the extent he has sustained
4 provable losses. The court shall have jurisdiction of all
5 questions arising in such proceedings and may make such orders
6 and judgments therein as may be required.
7 Section 9.2. Private Actions.--(a) Any person who purchases
8 or leases goods or services primarily for personal, family or
9 household purposes and thereby suffers any ascertainable loss of
10 money or property, real or personal, as a result of the use or
11 employment by any person of a method, act or practice declared
12 unlawful by section 3 of this act, may bring a private action in
13 the court of common pleas of the county or judicial district in
14 which the seller resides or has his principal place of business
15 or is doing business or in which the transaction took place or
16 where the buyer resides, to recover actual damages or one
17 hundred dollars ($100), whichever is greater. The court may, in
18 its discretion, award up to three times the actual damages
19 sustained, but not less than one hundred dollars ($100), and may
20 provide such additional relief as it deems necessary or proper.
21 (b) Any permanent injunction, judgment or order of the court
22 made under section 4 of this act shall be prima facie evidence
23 in an action brought under section 9.2 of this act that the
24 defendant used or employed acts or practices declared unlawful
25 by section 3 of this act.
26 Section 10. Effective Date.--This act shall take effect
27 immediately.
28 Section 2. This amendatory act shall take effect
29 immediately.
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