Chapter 94 Oregon Laws 2010 Special Session
AN ACT
HB 3706
Relating to application of Unlawful Trade Practices Act; creating new provisions; amending ORS 646.605, 646.618 and 646.632; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 646.605 is amended to read:
646.605. As used in ORS 646.605 to 646.652:
(1) “Appropriate court” means the circuit court of a county:
(a) Where one or more of the defendants reside;
(b) Where one or more of the defendants maintain a principal place of business;
(c) Where one or more of the defendants are alleged to have committed an act prohibited by ORS 646.605 to 646.652; or
(d) With the defendant’s consent, where the prosecuting attorney maintains an office.
(2) “Documentary material” means the original or a copy of any book, record, report, memorandum, paper, communication, tabulation, map, chart, photograph, mechanical transcription, or other tangible document or recording, wherever situate.
(3) “Examination” of documentary material shall include inspection, study or copying of any such material, and taking testimony under oath or acknowledgment in respect of any such documentary material or copy thereof.
(4) “Person” means natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations and any other legal entity except bodies or officers acting under statutory authority of this state or the United States.
(5) “Prosecuting attorney” means the Attorney General or the district attorney of any county in which a violation of ORS 646.605 to 646.652 is alleged to have occurred.
(6)(a) “Real estate, goods or services” means those that are or may be obtained primarily for personal, family or household purposes, or that are or may be obtained for any purposes as a result of a telephone solicitation, and includes loans and extensions of credit, and franchises, distributorships and other similar business opportunities, but does not include insurance. [Except as provided in section 2, chapter 658, Oregon Laws 2003, real estate does not cover conduct covered by ORS chapter 90.]
(b) Notwithstanding paragraph (a) of this subsection:
(A) “Real estate” does not cover conduct covered by ORS chapter 90 except as provided in section 2, chapter 658, Oregon Laws 2003.
(B) “Loans and extensions of credit” does not include transactions involving a pawnbroker, as defined in ORS 726.010, that is required to be licensed under ORS chapter 726.
(7) “Telephone solicitation” means a solicitation where a person, in the course of the person’s business, vocation or occupation, uses a telephone or an automatic dialing-announcing device to initiate telephonic contact with a potential customer and the person is not one of the following:
(a) A person who is a broker-dealer or salesperson licensed under ORS 59.175, or a mortgage banker or mortgage broker licensed under ORS 86A.106 when the solicitation is for a security qualified for sale pursuant to ORS 59.055.
(b) A real estate licensee or a person who is otherwise authorized to engage in professional real estate activity pursuant to ORS chapter 696, when the solicitation involves professional real estate activity.
(c) A person licensed or exempt from licensure as a builder pursuant to ORS chapter 701, when the solicitation involves the construction, alteration, repair, improvement or demolition of a structure.
(d) A person licensed or otherwise authorized to sell insurance as an insurance producer pursuant to ORS chapter 744, when the solicitation involves insurance.
(e) A person soliciting the sale of a newspaper of general circulation, a magazine or membership in a book or record club who complies with ORS 646.611, when the solicitation involves newspapers, magazines or membership in a book or record club.
(f) A person soliciting without the intent to complete and who does not complete the sales presentation during the telephone solicitation and who only completes the sales presentation at a later face-to-face meeting between the solicitor and the prospective purchaser.
(g) A supervised financial institution or parent, subsidiary or affiliate thereof. As used in this paragraph, “supervised financial institution” means any financial institution or trust company, as those terms are defined in ORS 706.008, or any personal property broker, consumer finance lender, commercial finance lender or insurer that is subject to regulation by an official or agency of this state or of the United States.
(h) A person who is authorized to conduct prearrangement or preconstruction funeral or cemetery sales, pursuant to ORS chapter 692, when the solicitation involves prearrangement or preconstruction funeral or cemetery plans.
(i) A person who solicits the services provided by a cable television system licensed or franchised pursuant to state, local or federal law, when the solicitation involves cable television services.
(j) A person or affiliate of a person whose business is regulated by the Public Utility Commission of Oregon.
(k) A person who sells farm products as defined by ORS 576.006 if the solicitation neither intends to nor actually results in a sale that costs the purchaser in excess of $100.
(L) An issuer or subsidiary of an issuer that has a class of securities that is subject to section 12 of the Securities Exchange Act of 1934 and that is either registered or exempt from registration under paragraph (A), (B), (C), (E), (F), (G) or (H) or subsection (g) of that section.
(m) A person soliciting exclusively the sale of telephone answering services to be provided by that person or that person’s employer when the solicitation involves answering services.
(n) A telecommunications utility with access lines of 15,000 or less or a cooperative telephone association when the solicitation involves regulated goods or services.
(8) “Trade” and “commerce” mean advertising, offering or distributing, whether by sale, rental or otherwise, any real estate, goods or services, and include any trade or commerce directly or indirectly affecting the people of this state.
(9) “Unconscionable tactics” include, but are not limited to, actions by which a person:
(a) Knowingly takes advantage of a customer’s physical infirmity, ignorance, illiteracy or inability to understand the language of the agreement;
(b) Knowingly permits a customer to enter into a transaction from which the customer will derive no material benefit;
(c) Permits a customer to enter into a transaction with knowledge that there is no reasonable probability of payment of the attendant financial obligation in full by the customer when due; or
(d) Knowingly takes advantage of a customer who is a disabled veteran, a disabled servicemember or a servicemember in active service, or the spouse of a disabled veteran, disabled servicemember or servicemember in active service. For purposes of this paragraph:
(A) “Disabled veteran” has the meaning given that term in ORS 408.225.
(B) “Disabled servicemember” means a servicemember, as defined in 50 U.S.C. App. 511 as in effect on January 1, 2010, who may be entitled to disability compensation under laws administered by the United States Department of Veterans Affairs.
(C) “Servicemember in active service” means:
(i) A servicemember called into active service under Title 10 or Title 32 of the United States Code as in effect on January 1, 2010; or
(ii) A servicemember on active state duty, as defined in ORS 398.002.
(10) A willful violation occurs when the person committing the violation knew or should have known that the conduct of the person was a violation.
(11) A loan is made “in close connection with the sale of a manufactured dwelling” if:
(a) The lender directly or indirectly controls, is controlled by or is under common control with the seller, unless the relationship is remote and is not a factor in the transaction;
(b) The lender gives a commission, rebate or credit in any form to a seller who refers the borrower to the lender, other than payment of the proceeds of the loan jointly to the seller and the borrower;
(c) The lender is related to the seller by blood or marriage;
(d) The seller directly and materially assists the borrower in obtaining the loan;
(e) The seller prepares documents that are given to the lender and used in connection with the loan; or
(f) The lender supplies documents to the seller used by the borrower in obtaining the loan.
SECTION 2. ORS 646.605, as amended by section 12, chapter 658, Oregon Laws 2003, section 199, chapter 71, Oregon Laws 2007, section 32, chapter 319, Oregon Laws 2007, and section 2, chapter 215, Oregon Laws 2009, is amended to read:
646.605. As used in ORS 646.605 to 646.652:
(1) “Appropriate court” means the circuit court of a county:
(a) Where one or more of the defendants reside;
(b) Where one or more of the defendants maintain a principal place of business;
(c) Where one or more of the defendants are alleged to have committed an act prohibited by ORS 646.605 to 646.652; or
(d) With the defendant’s consent, where the prosecuting attorney maintains an office.
(2) “Documentary material” means the original or a copy of any book, record, report, memorandum, paper, communication, tabulation, map, chart, photograph, mechanical transcription, or other tangible document or recording, wherever situate.
(3) “Examination” of documentary material shall include inspection, study or copying of any such material, and taking testimony under oath or acknowledgment in respect of any such documentary material or copy thereof.
(4) “Person” means natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations and any other legal entity except bodies or officers acting under statutory authority of this state or the United States.
(5) “Prosecuting attorney” means the Attorney General or the district attorney of any county in which a violation of ORS 646.605 to 646.652 is alleged to have occurred.
(6)(a) “Real estate, goods or services” means those that are or may be obtained primarily for personal, family or household purposes, or that are or may be obtained for any purposes as a result of a telephone solicitation, and includes loans and extensions of credit, and franchises, distributorships and other similar business opportunities, but does not include insurance. [Real estate does not cover conduct covered by ORS chapter 90.]
(b) Notwithstanding paragraph (a) of this subsection:
(A) “Real estate” does not cover conduct covered by ORS chapter 90.
(B) “Loans and extensions of credit” does not include transactions involving a pawnbroker, as defined in ORS 726.010, that is required to be licensed under ORS chapter 726.
(7) “Telephone solicitation” means a solicitation where a person, in the course of the person’s business, vocation or occupation, uses a telephone or an automatic dialing-announcing device to initiate telephonic contact with a potential customer and the person is not one of the following:
(a) A person who is a broker-dealer or salesperson licensed under ORS 59.175, or a mortgage banker or mortgage broker licensed under ORS 86A.106 when the solicitation is for a security qualified for sale pursuant to ORS 59.055.
(b) A real estate licensee or a person who is otherwise authorized to engage in professional real estate activity pursuant to ORS chapter 696, when the solicitation involves professional real estate activity.
(c) A person licensed or exempt from licensure as a builder pursuant to ORS chapter 701, when the solicitation involves the construction, alteration, repair, improvement or demolition of a structure.
(d) A person licensed or otherwise authorized to sell insurance as an insurance producer pursuant to ORS chapter 744, when the solicitation involves insurance.
(e) A person soliciting the sale of a newspaper of general circulation, a magazine or membership in a book or record club who complies with ORS 646.611, when the solicitation involves newspapers, magazines or membership in a book or record club.
(f) A person soliciting without the intent to complete and who does not complete the sales presentation during the telephone solicitation and who only completes the sales presentation at a later face-to-face meeting between the solicitor and the prospective purchaser.
(g) A supervised financial institution or parent, subsidiary or affiliate thereof. As used in this paragraph, “supervised financial institution” means any financial institution or trust company, as those terms are defined in ORS 706.008, or any personal property broker, consumer finance lender, commercial finance lender or insurer that is subject to regulation by an official or agency of this state or of the United States.
(h) A person who is authorized to conduct prearrangement or preconstruction funeral or cemetery sales, pursuant to ORS chapter 692, when the solicitation involves prearrangement or preconstruction funeral or cemetery plans.
(i) A person who solicits the services provided by a cable television system licensed or franchised pursuant to state, local or federal law, when the solicitation involves cable television services.
(j) A person or affiliate of a person whose business is regulated by the Public Utility Commission of Oregon.
(k) A person who sells farm products as defined by ORS 576.006 if the solicitation neither intends to nor actually results in a sale that costs the purchaser in excess of $100.
(L) An issuer or subsidiary of an issuer that has a class of securities that is subject to section 12 of the Securities Exchange Act of 1934 and that is either registered or exempt from registration under paragraph (A), (B), (C), (E), (F), (G) or (H) or subsection (g) of that section.
(m) A person soliciting exclusively the sale of telephone answering services to be provided by that person or that person’s employer when the solicitation involves answering services.
(n) A telecommunications utility with access lines of 15,000 or less or a cooperative telephone association when the solicitation involves regulated goods or services.
(8) “Trade” and “commerce” mean advertising, offering or distributing, whether by sale, rental or otherwise, any real estate, goods or services, and include any trade or commerce directly or indirectly affecting the people of this state.
(9) “Unconscionable tactics” include, but are not limited to, actions by which a person:
(a) Knowingly takes advantage of a customer’s physical infirmity, ignorance, illiteracy or inability to understand the language of the agreement;
(b) Knowingly permits a customer to enter into a transaction from which the customer will derive no material benefit;
(c) Permits a customer to enter into a transaction with knowledge that there is no reasonable probability of payment of the attendant financial obligation in full by the customer when due; or
(d) Knowingly takes advantage of a customer who is a disabled veteran, a disabled servicemember or a servicemember in active service, or the spouse of a disabled veteran, disabled servicemember or servicemember in active service. For purposes of this paragraph:
(A) “Disabled veteran” has the meaning given that term in ORS 408.225.
(B) “Disabled servicemember” means a servicemember, as defined in 50 U.S.C. App. 511 as in effect on January 1, 2010, who may be entitled to disability compensation under laws administered by the United States Department of Veterans Affairs.
(C) “Servicemember in active service” means:
(i) A servicemember called into active service under Title 10 or Title 32 of the United States Code as in effect on January 1, 2010; or
(ii) A servicemember on active state duty, as defined in ORS 398.002.
(10) A willful violation occurs when the person committing the violation knew or should have known that the conduct of the person was a violation.
(11) A loan is made “in close connection with the sale of a manufactured dwelling” if:
(a) The lender directly or indirectly controls, is controlled by or is under common control with the seller, unless the relationship is remote and is not a factor in the transaction;
(b) The lender gives a commission, rebate or credit in any form to a seller who refers the borrower to the lender, other than payment of the proceeds of the loan jointly to the seller and the borrower;
(c) The lender is related to the seller by blood or marriage;
(d) The seller directly and materially assists the borrower in obtaining the loan;
(e) The seller prepares documents that are given to the lender and used in connection with the loan; or
(f) The lender supplies documents to the seller used by the borrower in obtaining the loan.
SECTION 3. ORS 646.618 is amended to read:
646.618. (1) Except as provided in section 6 of this 2010 Act, when it appears to the prosecuting attorney that a person has engaged in, is engaging in, or is about to engage in any act or practice declared to be unlawful by ORS 646.607 or 646.608, the prosecuting attorney may execute in writing and cause to be served an investigative demand upon any person who is believed to have information, documentary material or physical evidence relevant to the alleged or suspected violation. The investigative demand shall require such person, under oath or otherwise, to appear and testify, to answer written interrogatories, or to produce relevant documentary material or physical evidence for examination, at such reasonable time and place as may be stated in the investigative demand, or to do any of the foregoing, concerning conduct of any trade or commerce which is the subject matter of the investigation.
(2) At any time before the return date specified in an investigative demand, or within 20 days after the demand has been served, whichever period is shorter, a petition to extend the return date, or to modify or set aside the demand, stating good cause including privileged material, may be filed in the appropriate court.
SECTION 4. ORS 646.632 is amended to read:
646.632. (1) Except as provided in section 6 of this 2010 Act, a prosecuting attorney who has probable cause to believe that a person is engaging in, has engaged in, or is about to engage in an unlawful trade practice may bring suit in the name of the State of Oregon in the appropriate court to restrain such person from engaging in the alleged unlawful trade practice.
(2) Except as provided in subsections (5) and (6) of this section, before filing a suit under subsection (1) of this section, the prosecuting attorney shall in writing notify the person charged of the alleged unlawful trade practice and the relief to be sought. Such notice shall be served in the manner set forth in ORS 646.622 for the service of investigative demands. The person charged thereupon shall have 10 days within which to execute and deliver to the prosecuting attorney an assurance of voluntary compliance. Such assurance shall set forth what actions, if any, the person charged intends to take with respect to the alleged unlawful trade practice. The assurance of voluntary compliance shall not be considered an admission of a violation for any purpose. If the prosecuting attorney is satisfied with the assurance of voluntary compliance, it may be submitted to an appropriate court for approval and if approved shall thereafter be filed with the clerk of the court. If an approved assurance of voluntary compliance provides for the payment of an amount of money, as restitution or otherwise, and if the amount is not paid within 90 days of the date the court approves the assurance, or, if the assurance of voluntary compliance requires periodic payments and if any periodic payment is not paid within 30 days of the date specified in the assurance of voluntary compliance for any periodic payment, then the prosecuting attorney may submit that portion of the assurance of voluntary compliance which provides for the payment of money to the court with a certificate stating the unpaid balance in a form which fully complies with the requirements of ORS 18.038 and 18.042. Upon submission of an assurance of voluntary compliance under this subsection, the court shall sign the assurance of voluntary compliance and it shall be entered in the register of the court and the clerk of the court shall note in the register that it creates a lien. The assurance of voluntary compliance shall thereupon constitute a judgment in favor of the State of Oregon and may be enforced as provided in ORS chapter 18. The notice of the prosecuting attorney under this subsection shall not be deemed a public record until the expiration of 10 days from the service of the notice.
(3) The prosecuting attorney may reject as unsatisfactory any assurance:
(a) Which does not contain a promise to make restitution in specific amounts or through arbitration for persons who suffered any ascertainable loss of money or property as a result of the alleged unlawful trade practice; or
(b) Which does not contain any provision, including but not limited to the keeping of records, which the prosecuting attorney reasonably believes to be necessary to ensure the continued cessation of the alleged unlawful trade practice, if such provision was included in a proposed assurance attached to the notice served pursuant to this section.
(4) Violation of any of the terms of an assurance of voluntary compliance which has been approved by and filed with the court shall constitute a contempt of court.
(5) The prosecuting attorney need not serve notice pursuant to subsection (2) of this section before filing a suit if, within two years of the filing of such suit, the person charged with the alleged unfair trade practice submitted to any prosecuting attorney an assurance of voluntary compliance which was accepted by and filed with an appropriate court. The prosecuting attorney shall in such case serve notice on the defendant in the manner set forth in ORS 646.622 for the service of investigative demands, on the 10th or earlier day previous to the filing of suit.
(6) If the prosecuting attorney alleges that the prosecuting attorney has reason to believe that the delay caused by complying with the provisions of subsection (2) or (5) of this section would cause immediate harm to the public health, safety or welfare, the prosecuting attorney may immediately institute a suit under subsection (1) of this section.
(7) A temporary restraining order may be granted without prior notice to the person if the court finds there is a threat of immediate harm to the public health, safety or welfare. Such a temporary restraining order shall expire by its terms within such time after entry, not to exceed 10 days, as the court fixes, unless within the time so fixed the order, for good cause shown, is extended for a like period or unless the person restrained consents that it may be extended for a longer period.
(8) The court may award reasonable attorney fees to the prevailing party in an action under this section. If the defendant prevails in such suit and the court finds that the defendant had in good faith submitted to the prosecuting attorney a satisfactory assurance of voluntary compliance prior to the institution of the suit or that the prosecuting attorney, in a suit brought under subsections (5) and (6) of this section, did not have reasonable grounds to proceed under those subsections, the court shall award reasonable attorney fees at trial and on appeal to the defendant.
SECTION 5. Section 6 of this 2010 Act is added to and made a part of ORS 646.605 to 646.652.
SECTION 6. (1) For purposes of this section, “state regulated lender” means:
(a) A banking institution as defined in ORS 706.008;
(b) A credit union as defined in ORS 723.006;
(c) A person that is required to be licensed under ORS 725.045;
(d) A pawnbroker, as defined in ORS 726.010, that is required to be licensed under ORS chapter 726; or
(e) A mortgage banker, mortgage broker or loan originator, as those terms are defined in ORS 86A.100, that is required to be licensed under ORS 86A.095 to 86A.198.
(2) A prosecuting attorney may not take action under ORS 646.618 or 646.632 with respect to an alleged unlawful practice under ORS 646.607 or 646.608 when the conduct involves loans or extensions of credit and was engaged in by a state regulated lender unless requested to do so by the Director of the Department of Consumer and Business Services. In any action requested to be taken by the director under this subsection, the director may elect to be named as a party to the proceeding or suit.
(3) The Attorney General may not adopt rules under ORS 646.608 (4) with respect to conduct involving loans or extensions of credit that is engaged in by a state regulated lender except with the prior review and approval of the proposed rules by the director. The Attorney General may not adopt rules under ORS 646.608 (4) with respect to conduct involving loans or extensions of credit that is engaged in by a state regulated lender except as provided in this subsection.
(4) As soon as practicable upon receipt, the Attorney General shall provide the director with copies of any complaint or other initial pleading or any judgment received under ORS 646.638 when the action involves the conduct of a state regulated lender.
SECTION 7. This 2010 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2010 Act takes effect on its passage.
Approved by the Governor March 23, 2010
Filed in the office of Secretary of State March 23, 2010
Effective date March 23, 2010
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