HB 5771

HOUSE BILL NO. 5771
A bill to amend 1976 PA 331, entitled
"Michigan consumer protection act,"
by amending sections 3, 5, and 11 (MCL 445.903,
445.905, and 445.911), section 3 as amended by 2022 PA 152 and sections 5 and
11 as amended by 2020 PA 296, and by adding section 3p.
the people of the state of michigan enact:
Sec. 3. (1) Unfair, unconscionable, or deceptive
methods, acts, or practices in the conduct of trade or commerce are unlawful
and are defined as follows:
(a) Causing a
probability of confusion or misunderstanding as to the source, sponsorship,
approval, or certification of goods or services.
(b) Using deceptive
representations or deceptive designations of geographic origin in connection
with goods or services.
(c) Representing
that goods or services have sponsorship, approval, characteristics,
ingredients, uses, benefits, or quantities that they
the goods or services do not have or
that a person has sponsorship, approval, status, affiliation, or connection
that he or she the
person does not have.
(d) Representing
that goods are new if they the goods are deteriorated, altered, reconditioned,
used, or secondhand.
(e) Representing
that goods or services are of a particular standard, quality, or grade, or that
goods are of a particular style or model, if they the goods are of another.
(f) Disparaging the
goods, services, business, or reputation of another by false or misleading
representation of fact.
(g) Advertising or
representing goods or services with intent not to dispose of those goods or
services as advertised or represented.
(h) Advertising
goods or services with intent not to supply reasonably expectable public
demand, unless the advertisement discloses a limitation of quantity in
immediate conjunction with the advertised goods or services.
(i) Making false or
misleading statements of fact concerning the reasons for, existence of, or
amounts of price reductions.
(j) Representing
that a part, replacement, or repair service is needed when it is not.
(k) Representing to
a party to whom goods or services are supplied that the goods or services are
being supplied in response to a request made by or on behalf of the party, when
they the goods or
services are not.
(l) Misrepresenting that because of some
defect in a consumer's home the health, safety, or lives of the consumer or his or her the consumer's
family are in danger if the product or services are not purchased, when
in fact the defect does not exist or the product or services would not remove
the danger.
(m) Causing a
probability of confusion or of misunderstanding with respect to the authority
of a salesperson, representative, or agent to negotiate the final terms of a
transaction.
(n) Causing a
probability of confusion or of misunderstanding as to the legal rights,
obligations, or remedies of a party to a transaction.
(o) Causing a
probability of confusion or of misunderstanding as to the terms or conditions
of credit if credit is extended in a transaction.
(p) Disclaiming or
limiting the implied warranty of merchantability and fitness for use, unless a
disclaimer is clearly and conspicuously disclosed.
(q) Representing or
implying that the subject of a consumer transaction will be provided promptly,
or at a specified time, or within a reasonable time, if the merchant knows or
has reason to know it will not be so provided.
(r) Representing
that a consumer will receive goods or services free or without charge, or using
words of similar import in the representation, without clearly and
conspicuously disclosing with equal prominence in immediate conjunction with
the use of those words the conditions, terms, or prerequisites to the use or
retention of the goods or services advertised.
(s) Failing to
reveal a material fact, the omission of which tends to mislead or deceive the
consumer, and which fact could not reasonably be known by the consumer.
(t) Entering into a
consumer transaction in which the consumer waives or purports to waive a right,
benefit, or immunity provided by law, unless the waiver is clearly stated and
the consumer has specifically consented to it.
(u) Failing, in a
consumer transaction that is rescinded, canceled, or otherwise terminated in
accordance with the terms of an agreement, advertisement, representation, or
provision of law, to promptly restore to the a person or persons entitled
to it a deposit, down payment, or other payment, or in the case of property
traded in but not available, the greater of the agreed value or the fair market
value of the property, or to cancel within a specified time or an otherwise
reasonable time an acquired security interest.
(v) Taking or
arranging for the consumer to sign an acknowledgment, certificate, or other
writing affirming acceptance, delivery, compliance with a requirement of law,
or other performance, if the merchant knows or has reason to know that the
statement is not true.
(w) Representing
that a consumer will receive a rebate, discount, or other benefit as an
inducement for entering into a transaction, if the benefit is contingent on an
event to occur subsequent to the consummation of the transaction.
(x) Taking
advantage of the consumer's inability reasonably to protect his or her the consumer's
interests by reason of disability, illiteracy, or inability to
understand the language of an agreement presented by the other party to the
transaction who knows or reasonably should know of the consumer's inability.
(y) Gross
discrepancies between the oral representations of the seller and the written
agreement covering the same transaction or failure of the other party to the
transaction to provide the promised benefits.
(z) Charging the
consumer a price that is grossly in excess of the price at which similar
property or services are sold.
(aa) Causing
coercion and duress as the result of the time and nature of a sales
presentation.
(bb) Making a
representation of fact or statement of fact material to the transaction such
that a person reasonably believes the represented or suggested state of affairs
to be other than it actually is.
(cc) Failing to
reveal facts that are material to the transaction in light of representations
of fact made in a positive manner.
(dd) Subject to
subdivision (ee), representing as the manufacturer of a product or package that
the product or package is 1 or more of the following:
(i) Except as provided in subparagraph (ii), recycled, recyclable, degradable, or is
of a certain recycled content, in violation of guides for the use of
environmental marketing claims, 16 CFR part 260.
(ii) For container holding devices regulated
under part 163 of the natural resources and environmental protection act, 1994
PA 451, MCL 324.16301 to 324.16303, degradable contrary to the definition for degradable as provided in that act.section 16301 of
the natural resources and environmental protection act, 1994 PA 451, MCL
324.16301.
(ee) Representing
that a product or package is degradable, biodegradable, or photodegradable
unless it can be substantiated by evidence that the product or package will
completely decompose into elements found in nature within a reasonably short
period of time after consumers use the product and dispose of the product or
the package in a landfill or composting facility, as appropriate.
(ff) Offering a
consumer a prize if the consumer is required to submit to a sales presentation
to claim the prize, unless a written disclosure is given to the consumer at the
time the consumer is notified of the prize and the written disclosure meets all
of the following requirements:
(i) Is written or printed in a bold type
that is not smaller than 10-point.
(ii) Fully describes the prize, including its the prize's cash
value, won by the consumer.
(iii) Contains all the terms and conditions
for claiming the prize, including a statement that the consumer is required to
submit to a sales presentation.
(iv) Fully describes the product, real
estate, investment, service, membership, or other item that is or will be
offered for sale, including the price of the least expensive item and the most
expensive item.
(gg) Violating 1971
PA 227, MCL 445.111 to 445.117, in connection with a home solicitation sale or
telephone solicitation, including, but not limited to, having an independent
courier service or other third party pick up a consumer's payment on a home solicitation
sale during the period the consumer is entitled to cancel the sale.
(hh) Except as
provided in subsection (3), requiring a consumer to disclose his or her the consumer's
Social Security number as a condition to selling or leasing goods or
providing a service to the consumer, unless any of the following apply:
(i) The selling, leasing, providing, terms
of payment, or transaction includes an application for or an extension of
credit to the consumer.
(ii) The disclosure is required or authorized
by applicable state or federal statute, rule, or regulation.
(iii) The disclosure is requested by a person
to obtain a consumer report for a permissible purpose described in section 604
of the fair credit reporting act, 15 USC 1681b.
(iv) The disclosure is requested by a
landlord, lessor, or property manager to obtain a background check of the
individual in conjunction with the rent or leasing of real property.
(v) The disclosure is requested from an
individual to effect, administer or enforce a specific telephonic or other
electronic consumer transaction that is not made in person but is requested or
authorized by the individual if it is to be used solely to confirm the identity
of the individual through a fraud prevention service database. The consumer
good or service must still be provided to the consumer on verification of his or her the consumer's
identity if he or she the consumer refuses to provide his or her the consumer's
Social Security number but provides other information or documentation
that can be used by the person to verify his or her
the consumer's identity. The person may
inform the consumer that verification through other means than use of the
Social Security number may cause a delay in providing the service or good to
the consumer.
(ii) If a credit
card or debit card is used for payment in a consumer transaction, issuing or
delivering a receipt to the consumer that displays any part of the expiration
date of the card or more than the last 4 digits of the consumer's account
number. This subdivision does not apply if the only receipt issued in a
consumer transaction is a credit card or debit card receipt on which the
account number or expiration date is handwritten, mechanically imprinted, or
photocopied. This subdivision applies to any consumer transaction that occurs
on or after March 1, 2005, except that if a credit or debit card receipt is
printed in a consumer transaction by an electronic device, this subdivision
applies to any consumer transaction that occurs using that device only after 1
of the following dates, as applicable:
(i) If the electronic device is placed in
service after March 1, 2005, July 1, 2005 or the date the device is placed in
service, whichever is later.
(ii) If the electronic device is in service
on or before March 1, 2005, July 1, 2006.
(jj) Violating
section 11 of the identity theft protection act, 2004 PA 452, MCL 445.71.
(kk) Advertising or
conducting a live musical performance or production in this state through the
use of a false, deceptive, or misleading affiliation, connection, or
association between a performing group and a recording group. This subdivision
does not apply if any of the following are met:
(i) The performing group is the authorized
registrant and owner of a federal service mark for that group registered in the
United States Patent and Trademark Office.
(ii) At least 1 member of the performing
group was a member of the recording group and has a legal right to use the
recording group's name, by virtue of use or operation under the recording
group's name without having abandoned the name or affiliation with the
recording group.
(iii) The live musical performance or
production is identified in all advertising and promotion as a salute or
tribute and the name of the vocal or instrumental group performing is not so
closely related or similar to that used by the recording group that it would
tend to confuse or mislead the public.
(iv) The advertising does not relate to a
live musical performance or production taking place in this state.
(v) The performance or production is
expressly authorized by the recording group.
(ll) Violating section 3e, 3f, 3g, 3h, 3i,
3k, 3l, 3m, or 3o, or 3p.
(2) The attorney
general may promulgate rules to implement this act under the administrative
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328. The rules must not
create an additional unfair trade practice not already enumerated by this
section. However, to assure national uniformity, rules must not be promulgated
to implement subsection (1)(dd) or (ee).
(3) Subsection
(1)(hh) does not apply to either of the following:
(a) Providing a
service related to the administration of health-related or dental-related
benefits or services to patients, including provider contracting or
credentialing. This subdivision is intended to limit the application of
subsection (1)(hh) and is not intended to imply that this act would otherwise
apply to health-related or dental-related benefits.
(b) An employer
providing benefits or services to an employee.
Sec. 3p. (1) A person
engaged in trade or commerce shall not use surveillance pricing in the sale of
goods or services.
(2) A person is not in violation of subsection (1) if any of the
following apply:
(a) The difference in price of a good or service is based solely on
costs associated with providing the good or service to different consumers.
(b) A discounted price is offered through a loyalty, membership, or
rewards program that consumers affirmatively enroll in, including, but not
limited to, signing up for a mailing list, registering for promotional
communications, or participating in a promotional event.
(c) A discounted price is offered to members of a broadly defined group,
including, but not limited to, teachers, active or retired military, senior
citizens, or students, based on publicly disclosed eligibility criteria.
(d) A discounted price is offered after a consumer directly and
knowingly provides specific personally identifiable information for the purpose
of obtaining a discount. The nature and purpose of the consumer's disclosure of
personally identifiable information must be conveyed in clear and prominent
terms in such a manner that an ordinary consumer would notice and understand
the nature and purpose of providing the disclosure.
(e) The person operates as an insurer as that term is defined in section
106 of the insurance code of 1956, 1956 PA 218, MCL 500.106.
(f) The pricing or specific terms of extending credit, the refusal to
extend credit on specific terms, or the refusal to enter into a transaction
with a specific consumer, is based on information contained in a consumer
report as that term is defined in section 603 of the fair credit reporting act,
15 USC 1681a.
(3) A discounted price or reward offered under subsection (2) must be offered
uniformly to all consumers who meet the disclosed eligibility criteria. The
eligibility criteria, available discount, and any condition for receiving or
earning a discount or reward must be clearly and conspicuously disclosed before
any covered information is collected.
(4) Any covered information collected under subsection (2) must be used
solely for the purpose of offering or administering the applicable discount,
cost-based pricing, or loyalty program, and must not be used for any other
purpose, including, but not limited to, profiling, targeted advertising, or
individualized price setting.
(5) Any personally identifiable information provided for the purpose of
receiving a discounted price is not augmented or supplemented by personally
identifiable information obtained from a third party or by other means.
(6) As used in this section:
(a) "Behavior" or "behavioral" means an individual's
observable, measurable, or inferred actions, habits, preferences, interests, or
vulnerabilities, including, but not limited to, an individual's political,
personal, or professional affiliations, web browsing history, IP addresses, locations
frequented, purchase history, financial circumstances, or inferences associated
with a group, band, class, or tier of individuals with whom the individual is
associated.
(b) "Biometrics" means data or information generated by
technological processing, measurement, or analysis of an individual's
biological, physical, or behavioral characteristics, which can be processed for
the purpose of uniquely identifying an individual, including all of the
following characteristics:
(i) A fingerprint.
(ii) A voice print
or recording.
(iii) A scan or
record of an eye, retina, or iris image.
(iv) A facial map,
scan, geometry, or template.
(v) Genetic
information.
(vi) Other unique
biological, physical, or behavioral patterns or characteristics.
(c) "Personally identifiable information" means individual
qualities, features, attributes, or traits that could be used to uncover an
individual's identity, including, but not limited to, all of the following:
(i) Immutable
characteristics, such as race, color, sex, eye color, or height.
(ii) Mutable
characteristics, such as weight, marital or relationship status, parental
status, employment status, citizenship status, political or partisan
affiliation, religious identity, or occupation.
(iii) Any other
information that could be used to uncover an individual's identity, including a
Social Security number, full name, mailing address, or telephone number.
(d) "Surveillance pricing" means offering or setting a
customized price for a good or service for a specific individual or group of
individuals based, in whole or in part, on personally identifiable information
collected through electronic surveillance technology. Surveillance pricing
includes the use of technological methods, systems, or tools, including, but
not limited to, sensors, cameras, device tracking, biometric monitoring,
artificial intelligence, machine learning, or other forms of observation or data
collection and analysis, that are capable of gathering covered information
about an individual's behavior, characteristics, biometrics, location, or other
personal attributes, whether in physical or digital environments.
Sec. 5. (1) If the attorney general has probable cause
to believe that a person has engaged, is engaging, or is about to engage in a
method, act, or practice that is unlawful under section 3, and gives notice pursuant to required by this
section, the attorney general may bring an action in accordance with principles
of equity to restrain the defendant by temporary or permanent injunction from
engaging in the method, act, or practice. The
(2) An action under this section may be brought in the circuit
court of the county where the defendant is established or conducts business or,
if the defendant is not established in this state, in the circuit court of
Ingham County.
(3) The court
may award costs to the prevailing party in an action
under this section. Except as otherwise
provided in this section,
(4) Subject to subsection (5), for each persistent and
knowing violation of section 3, the court in an
action under this section may assess the defendant a civil fine of not
more than $25,000.00.
(5) For a
violation of section 3(1)(kk), each performance or production is a separate
violation. For a violation of section 3l, the court may assess the defendant a civil fine of not more than
$1,000.00 per violation. Each day a violation of section 3l occurs counts as a separate violation. For a violation of section 3p, the court may assess the
defendant a civil fine of not more than $10,000.00 plus all revenues earned per
violation. Each consumer or transaction involved in a violation of section 3p
counts as a separate violation.
(6) (2) Unless
waived by the court on good cause shown not less than 10 days before the
commencement of an action under this section, the attorney general shall notify
the person of his or her the intended action and give the person an
opportunity to cease and desist from the alleged unlawful method, act, or
practice or to confer with the attorney general in person, by counsel, or by
other representative as to the proposed action before the proposed filing date.
(7) The notice required under subsection (6) may be given to the
person by mail, postage prepaid, to his or her the person's usual place of business or, if the
person does not have a usual place of business, to his
or her the person's last known address,
or, if the person is a corporation, only to a resident agent who is designated
to receive service of process or to an officer of the corporation.
(8) (3) A
prosecuting attorney or law enforcement officer receiving notice of an alleged
violation of this act, or of a violation of an injunction, order, decree, or
judgment issued in an action brought pursuant to under this section, or of an assurance under this
act, shall immediately forward written notice of the violation together with
any information he or she may have that the prosecuting attorney or law enforcement officer has
to the office of the attorney general.
(9) (4) A
person who that knowingly
violates the terms of an injunction, order, decree, or judgment issued under
this section shall must
forfeit and pay to the state a civil fine of not more than $5,000.00 for
each violation.
(10) For the
purposes of this section, the court issuing an injunction, order, decree, or
judgment shall retain jurisdiction, the cause shall
be is continued, and the attorney
general may petition for recovery of a civil fine as provided by this section.
Sec. 11. (1) Whether or not a person seeks damages or
has an adequate remedy at law, a person may bring an action to do either or
both of the following:
(a) Obtain a
declaratory judgment that a method, act, or practice is unlawful under section
3.
(b) Enjoin in
accordance with the principles of equity a person who
that is engaging or is about to engage
in a method, act, or practice that is unlawful under section 3.
(2) Except in a
class action or as otherwise provided in subsection (3), and except for a violation of section 3p, a person who that suffers a
loss as a result of a violation of this act may bring an action to recover
actual damages or $250.00, whichever is greater, together with reasonable
attorney fees.
(3) Except in a
class action, a person who that suffers a loss as a result of a violation of
section 3l may
bring an action to recover actual damages or $5,000.00, whichever is greater,
together with reasonable attorney fees. In an action brought under this
subsection, the court may, in its the court's discretion, award punitive damages.
(4) A person who that suffers a
loss as a result of a violation of this act may bring a class action on
behalf of persons residing or injured in this state for the actual damages
caused by any of the following:
(a) A method, act,
or practice in trade or commerce defined as unlawful under section 3, except for a violation of section 3p.
(b) A method, act,
or practice in trade or commerce declared to be unlawful under section 3(1), except for a violation of section 3p, by a final
judgment of the circuit court or an appellate court of this state that is
either reported officially or made available for public dissemination pursuant to under section
9 by the attorney general not less than 30 days before the method, act, or
practice on which the action is based occurs.
(c) A method, act,
or practice in trade or commerce declared by a circuit court of appeals or the
United States Supreme Court to be an unfair or deceptive act or practice within
the meaning of section 5(a)(1) of the federal trade commission act, 15 USC 45(a)(1), 45, in a
decision that affirms or directs the affirmance of a cease and desist order
issued by the Federal Trade Commission if the order is final within the meaning
of section 5(g) of the federal trade commission act, 15 USC 45(g), 45, and
that is officially reported not less than 30 days before the method, act, or
practice on which the action is based occurs. For purposes of this subdivision,
a method, act, or practice is not unfair or deceptive within the meaning of
section 5(a)(1) of the federal trade commission act, 15 USC 45(a)(1), 45, solely
because the method, act, or practice is made unlawful by another federal
statute that refers to or incorporates section 5(a)(1) of the federal trade
commission act, 15 USC 45(a)(1).45.
(5) On motion of a
person and without bond in an action brought under subsection (4), the court
may make an appropriate order to do 1 or more of the following:
(a) Reimburse
persons who have suffered damages.
(b) Carry out a
transaction in accordance with the aggrieved persons' reasonable expectations.
(c) Strike or limit
the application of unconscionable clauses of contracts to avoid an
unconscionable result.
(d) Grant other
appropriate relief.
(6) In an action
brought under subsection (4), the court after a hearing may appoint a receiver
or order sequestration of the defendant's assets if it appears to the
satisfaction of the court that the defendant threatens or is about to remove,
conceal, or dispose of the defendant's assets to the detriment of members of
the class.
(7) If at any stage
of proceedings brought under subsection (4) the court requires that notice be
sent to the class, a person may petition the court to require the defendant to
bear the cost of notice. In determining whether to impose the cost on the defendant
or the plaintiff, the court shall consider the probability that the person will
succeed on the merits of the person's action.
(8) If the
defendant shows by a preponderance of the evidence that a violation of this act
resulted from a bona fide error notwithstanding the maintenance of procedures
reasonably adapted to avoid the error, the amount of recovery is limited to
actual damages.
(9) An action under
this section must not be brought more than 6 years after the occurrence of the
method, act, or practice that is the subject of the action or more than 1 year
after the last payment in a transaction involving the method, act, or practice
that is the subject of the action, whichever period of time ends at a later
date. However, if a person commences an action against another person, the
defendant may assert, as a defense or counterclaim, any claim under this act
arising out of the transaction on which the action is brought.