PRINTER'S NO. 2856
No. 2037 Session of 2007
INTRODUCED BY CREIGHTON, BELFANTI, BOYD, BRENNAN, CALTAGIRONE, CAPPELLI, COHEN, CUTLER, GEORGE, HARHAI, HARPER, HENNESSEY, HICKERNELL, HORNAMAN, JAMES, KOTIK, MANDERINO, McGEEHAN, MELIO, R. MILLER, MOUL, MYERS, RAPP, ROHRER, RUBLEY, SOLOBAY, SONNEY, SWANGER, WALKO AND YOUNGBLOOD, NOVEMBER 15, 2007
REFERRED TO COMMITTEE ON COMMERCE, NOVEMBER 15, 2007
AN ACT 1 Amending Titles 18 (Crimes and Offenses) and 42 (Judiciary and 2 Judicial Procedure) of the Pennsylvania Consolidated 3 Statutes, further providing for deceptive or fraudulent 4 business practices; and providing for damages for 5 misrepresentation of home loan principal, outstanding balance 6 or interest. 7 The General Assembly of the Commonwealth of Pennsylvania 8 hereby enacts as follows: 9 Section 1. Section 4107(a) and (a.1) of Title 18 of the 10 Pennsylvania Consolidated Statutes are amended to read: 11 § 4107. Deceptive or fraudulent business practices. 12 (a) Offense defined.--A person commits an offense if, in the 13 course of business, the person: 14 (1) uses or possesses for use a false weight or measure, 15 or any other device for falsely determining or recording any 16 quality or quantity; 17 (2) sells, offers or exposes for sale, or delivers less 18 than the represented quantity of any commodity or service;
1 (3) takes or attempts to take more than the represented 2 quantity of any commodity or service when as buyer he 3 furnishes the weight or measure; 4 (4) sells, offers or exposes for sale adulterated or 5 mislabeled commodities. As used in this paragraph, the term 6 "adulterated" means varying from the standard of composition 7 or quality prescribed by or pursuant to any statute providing 8 criminal penalties for such variance or set by established 9 commercial usage. As used in this paragraph, the term 10 "mislabeled" means varying from the standard of trust or 11 disclosure in labeling prescribed by or pursuant to any 12 statute providing criminal penalties for such variance or set 13 by established commercial usage; 14 (5) makes a false or misleading statement in any 15 advertisement addressed to the public or to a substantial 16 segment thereof for the purpose of promoting the purchase or 17 sale of property or services; 18 (6) makes or induces others to rely on a false or 19 misleading written statement for the purpose of obtaining 20 property or credit; 21 (7) makes or induces others to rely on a false or 22 misleading written statement for the purpose of promoting the 23 sale of securities, or omits information required by law to 24 be disclosed in written documents relating to securities; 25 (8) makes or induces others to rely on a false or 26 misleading material statement to induce an investor to invest 27 in a business venture. The offense is complete when any false 28 or misleading material statement is communicated to an 29 investor regardless of whether any investment is made. For 30 purposes of grading, the "amount involved" is the amount or 20070H2037B2856 - 2 -
1 value of the investment solicited or paid, whichever is 2 greater. As used in this paragraph, the following words and 3 phrases shall mean: "Amount" as used in the definition of 4 "material statement" includes currency values and comparative 5 expressions of value, including, but not limited to, 6 percentages or multiples. "Business venture" means any 7 venture represented to an investor as one where he may 8 receive compensation either from the sale of a product, from 9 the investment of other investors or from any other 10 commercial enterprise. "Compensation" means anything of value 11 received or to be received by an investor. "Invest" means to 12 pay, give or lend money, property, service or other thing of 13 value for the opportunity to receive compensation. The term 14 also includes payment for the purchase of a product. 15 "Investment" means the money, property, service or other 16 thing of value paid or given, or to be paid or given, for the 17 opportunity to receive compensation. "Investor" means any 18 natural person, partnership, corporation, limited liability 19 company, business trust, other association, government 20 entity, estate, trust, foundation or other entity solicited 21 to invest in a business venture, regardless of whether any 22 investment is made. "Material statement" means a statement 23 about any matter which could affect an investor's decision to 24 invest in a business venture, including, but not limited to, 25 statements about: 26 (i) the existence, value, availability or 27 marketability of a product; 28 (ii) the number of former or current investors, the 29 amount of their investments or the amount of their former 30 or current compensation; 20070H2037B2856 - 3 -
1 (iii) the available pool or number of prospective 2 investors, including those who have not yet been 3 solicited and those who already have been solicited but 4 have not yet made an investment; 5 (iv) representations of future compensation to be 6 received by investors or prospective investors; or 7 (v) the source of former, current or future 8 compensation paid or to be paid to investors or 9 prospective investors. 10 "Product" means a good, a service or other tangible or 11 intangible property of any kind; 12 (9) obtains or attempts to obtain property of another by 13 false or misleading representations made through 14 communications conducted in whole or in part by telephone 15 involving the following: 16 (i) express or implied claims that the person 17 contacted has won or is about to win a prize; 18 (ii) express or implied claims that the person 19 contacted may be able to recover any losses suffered in 20 connection with a prize promotion; or 21 (iii) express or implied claims regarding the value 22 of goods or services offered in connection with a prize 23 or a prize promotion. 24 As used in this paragraph, the term "prize" means anything of 25 value offered or purportedly offered. The term "prize 26 promotion" means an oral or written express or implied 27 representation that a person has won, has been selected to 28 receive or may be eligible to receive a prize or purported 29 prize; 30 (10) knowingly makes a false or misleading statement in 20070H2037B2856 - 4 -
1 a privacy policy, published on the Internet or otherwise 2 distributed or published, regarding the use of personal 3 information submitted by members of the public; [or] 4 (11) does either of the following when the person is in 5 a client relationship with a certified public accountant, 6 public accountant or public accounting firm: 7 (i) provides false or misleading information to the 8 certified public accountant, public accountant or public 9 accounting firm in connection with performance of an 10 attestation function for the client which results in an 11 attestation by the certified public accountant, public 12 accountant or public accounting firm of a materially 13 misleading financial statement, audit, review or other 14 document; or 15 (ii) fails to provide information to the certified 16 public accountant, public accountant or public accounting 17 firm which the person knows is material to the 18 performance of an attestation function and which results 19 in an attestation by the certified public accountant, 20 public accountant or public accounting firm of a 21 materially misleading financial statement, audit, review 22 or other document[.]; or 23 (12) makes a false or misleading statement to a borrower 24 regarding the amount of principal, outstanding balance or 25 interest owed on a home loan. 26 (a.1) Grading of offenses.-- 27 (1) A violation of this section, except for [subsection] 28 subsections (a)(10) and (12), constitutes: 29 (i) a felony of the third degree if the amount 30 involved exceeds $2,000; 20070H2037B2856 - 5 -
1 (ii) a misdemeanor of the first degree if the amount 2 involved is $200 or more but $2,000 or less; 3 (iii) a misdemeanor of the second degree if the 4 amount involved is less than $200; or 5 (iv) when the amount involved cannot be 6 satisfactorily ascertained, the offense constitutes a 7 misdemeanor of the second degree. 8 (2) Amounts involved in deceptive or fraudulent business 9 practices pursuant to one scheme or course of conduct, 10 whether from the same person or several persons, may be 11 aggregated in determining the grade of the offense. 12 (3) Where a person commits an offense under subsection 13 (a) and the victim of the offense is 60 years of age or 14 older, the grading of the offense shall be one grade higher 15 than specified in paragraph (1). 16 (4) An offense under subsection (a)(10) shall be a 17 summmary offense and shall be punishable by a fine not less 18 than $50 and not to exceed $500. 19 (5) An offense under subsection (a)(12) shall be a 20 felony of the third degree if the amount involved exceeds 21 $2,000 and shall be punishable by a term of imprisonment, the 22 minimum of which shall be not less than five years. 23 * * * 24 Section 2. Title 42 is amended by adding a section to read: 25 § 8304.1. Damages for misrepresentation of home loan principal, 26 outstanding balance or interest. 27 (a) General rule.--In a civil action to recover damages and 28 costs following a conviction for a deceptive or fraudulent 29 business practice pursuant to 18 Pa.C.S. § 4107(a)(12) (relating 30 to deceptive or fraudulent business practices) and failure to 20070H2037B2856 - 6 -
1 make full restitution, the borrower shall, upon obtaining 2 judgment, be entitled to recover damages in an amount equal to 3 triple the amount of the claim. 4 (b) Restriction.--If partial restitution has been made, 5 damages recovered under this section may not exceed triple the 6 amount of the unpaid restitution. 7 Section 3. This act shall take effect in 60 days. J15L18JKL/20070H2037B2856 - 7 -