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                                                      PRINTER'S NO. 2856

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

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
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     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;
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     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
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     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;
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     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
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     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.
















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