State Regulation:
Montana
Note: no law specific to the credit services/credit repair
industry, but does regulate the telemarketing of such
services.
MCA 30-14-1401
MONTANA CODE ANNOTATED
TITLE 30. TRADE AND COMMERCE
CHAPTER 14. UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION
PART 14. MONTANA TELEMARKETING REGISTRATION AND FRAUD
PREVENTION ACT
30-14-1401. Short title
This part may be cited as the "Montana Telemarketing
Registration and Fraud Prevention Act".
30-14-1402. Purpose -- scope -- rulemaking
(1) The purposes of this part are to require telemarketers
to register in this state, to establish standards of conduct
for telemarketers, and to provide penalties for violations
of this part.
(2) This part does not apply to any claim brought by a
person under Title 30, chapter 14, part 5, and the
provisions of Title 30, chapter 14, part 5, do not apply to
any claim brought by a person pursuant to the provisions of
this part.
(3) The department shall adopt rules to implement the
provisions of this part. The rules must include but are not
limited to rules:
(a) establishing forms and procedures for registration,
registration renewal, and bonding of sellers or
telemarketers;
(b) for administering a telemarketing fraud consumer
awareness program; and
(c) ensuring that proper procedures are in place for
maintaining civil and criminal actions for violations of
this part.
30-14-1403. Definitions
As used in this part, the following definitions apply:
(1) "Consumer" means a person who is or may be required to
pay for goods or services offered by a seller or
telemarketer through telemarketing.
(2) "Department" means the department of justice created in
2-15-2001.
(3) "Goods or services" means any real property, any
tangible or intangible personal property, or services of any
kind provided or offered to a person.
(4) "Material aspect" means any factor likely to affect a
person's choice of or conduct regarding goods or services.
The term includes currency values and comparative
expressions of value, including but not limited to
percentages or multiples.
(5) "Person" means a natural person, corporation, trust,
partnership, incorporated or unincorporated association, or
other legal entity.
(6) "Prize" means anything offered, purportedly offered,
given, or purportedly given to a person by chance.
(7) "Prize promotion" means a sweepstakes or other game of
chance or an oral or written representation, express or
implied, that a person has won, has been selected to
receive, or is eligible to receive a prize or purported
prize.
(8) "Seller" means a person who, in connection with a
telemarketing transaction, provides, offers to provide, or
arranges for others to provide goods or services to the
consumer in exchange for consideration.
(9) "Solicitation" means a written or oral notification or
advertisement that:
(a) is transmitted by or on behalf of a seller or
telemarketer by any printed, audio, video, cinematic,
telephonic, or electronic means to a consumer; and
(b) in the case of a notification or advertisement other
than by telephone, either of the following conditions is
met:
(i) the notification or advertisement is followed by a
telephone call from a seller or telemarketer; or
(ii) the notification or advertisement induces a response by
telephone and, through that response, a seller or
telemarketer attempts to make a sale of goods or services.
(10) "Supervised financial organization" means any bank,
trust company, savings and loan association, mutual savings
bank, credit union, industrial loan company, consumer
finance lender, commercial finance lender, or insurer,
provided that the organization is subject to supervision by
an agency of this or any other state of the United States or
an agency, bureau, or department of government of the United
States.
(11) "Telemarketer" means a person, located within or
outside of this state, who in connection with telemarketing
initiates or receives telephone calls to or from a consumer
in this state. The term includes a seller directly engaged
in telemarketing on the seller's own behalf or a person
engaged in telemarketing at the direction of a seller.
(12) "Telemarketing" means a plan, program, or campaign that
is conducted by telephone to induce the purchase of goods or
services and that involves more than one telephone call to a
consumer.
30-14-1404. Registration of sellers or telemarketers
(1) (a) Unless exempt under 30-14-1405, a person may not act
as a seller or telemarketer without first having registered
with the department.
(b) The initial application for registration must be
approved by the department prior to a seller or telemarketer
offering or offering for sale consumer goods or services
through any medium.
(c) A registered seller or telemarketer shall submit an
application for renewal of registration annually to the
department.
(d) The application for a certificate of registration or
renewal must include but is not limited to the following
information:
(i) the true name, current address, telephone number, and
location of the seller or telemarketer, including each name
under which the seller or telemarketer intends to engage in
telemarketing;
(ii) each occupation or business that the seller's or
telemarketer's principal owner has engaged in for the 2
years immediately preceding the date of the application;
(iii) whether any principal or manager has been convicted or
pleaded guilty to or is being prosecuted by indictment for
racketeering, violations of state or federal securities
laws, or a theft offense;
(iv) whether there has been entered against any principal or
manager an injunction, a temporary restraining order, or a
final judgment in any civil or administrative action
involving fraud, theft, racketeering, embezzlement,
fraudulent conversion, misappropriation of property, or
violation of any federal or state consumer protection law.
The information must include any pending litigation against
the applicant.
(v) whether the seller, at any time during the previous 7
years, has filed for bankruptcy, been adjudged bankrupt, or
been reorganized because of insolvency;
(vi) the true name, current home address, date of birth,
social security number, and all other names of the
following:
(A) each telemarketer or other person to be employed by the
seller;
(B) each person participating in or responsible for the
management of the seller's business; and
(C) each person, office manager, or supervisor principally
responsible for the management of the seller's business;
(vii) the name, address, and account number of every
institution where banking or any other monetary transactions
are conducted by the seller; and
(viii) a copy of all scripts, outlines, or presentation
material that the seller will require a telemarketer to use
when soliciting, as well as all sales information to be
provided by the seller to a purchaser in connection with any
solicitation.
(2) (a) The application for registration or renewal must be
accompanied by a surety bond in the amount of $50,000. The
bond must provide for indemnification to the state of
Montana for any person suffering a loss as the result of
violation of this part.
(b) The surety may for any cause cancel the bond upon giving
a 60-day written notice by certified mail to the applicant
and to the department. Unless the bond is replaced by that
of another surety before the expiration of the 60-day notice
of cancellation, the registration of the seller or
telemarketer must be treated as lapsed.
(c) The surety bond must remain in effect for 1 year from
the period the telemarketing business ceases to operate in
this state.
(d) (i) Any business required under this part to file a bond
with a registration application may file, in lieu of the
bond, a certificate of deposit, cash, or a government bond
in the amount of $50,000.
(ii) The department shall hold the cash, certificate of
deposit, or government bond for 1 year from the period the
telemarketing business ceases to operate in this state or
registration lapses in order to pay claims made against the
telemarketing business for its activities during its period
of operation in this state.
(iii) For the purposes of this section, "government bond"
means any United States bond, treasury note, or other public
debt obligation of the United States that is unconditionally
guaranteed as to both interest and principal by the United
States .
(e) The registration of a telemarketing business must be
treated as lapsed if at any time the amount of the bond,
cash, certificate of deposit, or government bond falls below
the amount required by this section.
(f) The aggregate liability of the surety company to the
state of Montana for all persons injured by a seller's or
telemarketer's violations may not exceed the amount of the
bond.
(3) The following constitute a violation of this part:
(a) failure to register, maintain, or renew a registration
if required;
(b) failure to meet the surety bond requirement if required
to provide a bond;
(c) including any false or misleading information on a
registration application; and
(d) misrepresenting that a seller or telemarketer is
registered.
(4) A violation of subsection (3) of this section also
constitutes a violation of 30-14-103 and is subject to the
penalty provisions of 30-14-1414 and the Montana Unfair
Trade Practices and Consumer Protection Act of 1973.
30-14-1405. Exemptions from registration and bonding
The registration and bonding requirements of 30-14-1404 do
not apply to:
(1) any securities, commodities, or investment brokers,
dealers, or investment advisers or any associates of
securities, commodities, or investment brokers, dealers, or
investment advisers who are subject to licensure or
registration by the securities and exchange commission, the
national association of securities dealers, or another
self-regulatory organization, as defined by 15 U.S.C. 78(c),
or by an agency of this state or any other state and who are
soliciting within the scope of their license or
registration;
(2) a person engaged in solicitation for a religious,
charitable, political, educational, or other noncommercial
purpose or a person soliciting for a domestic or foreign
nonprofit corporation that is registered with the Montana
secretary of state;
(3) a business-to-business sale;
(4) a person that solicits sales by periodically publishing
and delivering a catalog of the person's merchandise to
prospective purchasers, if the catalog:
(a) contains a written description or illustration of each
item offered for sale;
(b) includes the business or home address of the person
soliciting the sale;
(c) includes at least 20 pages of written material and
illustrations;
(d) is distributed in more than one state; and
(e) has a circulation by mailing of not less than 150,000;
(5) a person who solicits contracts for maintenance or
repair of goods previously purchased from that person or
from the person on whose behalf the solicitation is made;
(6) a person soliciting a transaction regulated by the
commodity futures trading commission if the person is
registered or temporarily licensed with the commodity
futures trading commission under the Commodity Exchange Act,
Title 7, chapter 1, of the United States Code, and the
person's registration or license is not expired, suspended,
or revoked;
(7) a supervised financial organization or parent,
subsidiary, or affiliate of a supervised financial
organization;
(8) an insurer authorized to transact insurance under Title
33, chapter 2, part 1, a person licensed as an insurance
producer under Title 33, chapter 17, part 2, or staff
members, licensed or unlicensed, of the producer;
(9) a person soliciting the sale of services provided by a
satellite or cable television system or a radio or
television station authorized by the federal government or
this state to provide services in this state;
(10) a telephone company or its subsidiary or agent or other
business regulated by the Montana public service commission,
the federal communications commission, a rural telephone
cooperative or its subsidiary or agent, or a federally
licensed cellular telephone or radio telecommunication
service provider;
(11) a person soliciting business from consumers that have
an existing business relationship with or have previously
purchased from the business enterprise for which the person
is soliciting;
(12) a person operating a retail business establishment
under the same name as that used in the solicitation and:
(a) the products or services are displayed and offered for
sale at the business establishment; and
(b) a majority of the person's business involves the
consumer obtaining the products or services at the business
establishment;
(13) a person soliciting for the sale of a magazine or
newspaper of general circulation;
(14) an issuer or a subsidiary of an issuer that is
authorized to offer securities for sale in this state;
(15) a book, video, record, or multimedia club, contractual
plan, or arrangement:
(a) under which the seller provides the consumer with a form
that the consumer may use to instruct the seller not to ship
the offered merchandise;
(b) that is regulated by the federal trade commission
regulation, 16 CFR 425, concerning the use of negative
option plans by sellers in commerce; or
(c) that provides for the sale of books, videos, records,
multimedia products, or other goods that are not covered by
subsection (15)(a) or (15)(b), including continuity plans,
subscription arrangements, standing order arrangements,
single sales, supplements, or series arrangements under
which the seller periodically ships merchandise to a
consumer who has consented in advance to receive the
merchandise on a periodic basis;
(16) a real estate salesperson or broker licensed by this
state;
(17) a person that has provided telemarketing sales services
under the same name and derives 50% of gross telemarketing
sales revenue from contracts with persons exempted under
this section from registration requirements;
(18) a person soliciting the sale of food or food products
if the solicitation is not intended to and does not result
in a sale in excess of $100 to a single address.
30-14-1406. Telemarketing fraud consumer awareness program
The department shall establish and administer a
telemarketing fraud consumer awareness program. The program
must be funded as provided in 30-14-1407(2).
30-14-1407. Authority of department and county attorney
(1) The department and a county attorney have the same
authority to enforce and carry out the provisions of this
part as they have under Title 30, chapter 14, part 1.
(2) All civil fines, costs, and fees received or recovered
by the department pursuant to this section must be deposited
into a state special revenue account to the credit of the
department and must be used to defray the expenses of the
department in discharging its administrative and regulatory
powers and duties in relation to this section and to fund
the telemarketing fraud consumer awareness program
established in 30-14-1406. Any excess civil fines, costs, or
fees must be deposited in the general fund.
(3) All civil fines, costs, and fees received or recovered
by a county attorney must be paid to the general fund of the
county in which the action was commenced.
30-14-1408. Recordkeeping requirements
(1) (a) A telemarketer shall keep records subject to this
section for a period of 24 months from the date the record
is produced.
(b) The records that must be kept for the 24-month period
include:
(i) all substantially different advertising, brochures,
telemarketing scripts, and promotional materials;
(ii) the name and last-known address of each prize recipient
and the prize awarded;
(iii) the name and last-known address of each consumer, the
goods or services purchased, the date the goods or services
were shipped or provided, the amount of goods or services
provided, and the amount paid by the consumer for the goods
or services;
(iv) the name, any fictitious name used, the last-known home
address and telephone number, and the job title for all
current and former employees directly involved in telephone
sales; however, if the seller or telemarketer permits
fictitious names to be used by employees, each fictitious
name must be traceable to only one specific employee; and
(v) all written authorizations required to be provided or
received under this part.
(2) In the event of any dissolution or termination of a
telemarketer's business, the principal of that telemarketer
shall maintain all records as required under this section.
In the event of any sale, assignment, or other change in
ownership of the seller's business, the successor shall
maintain all records required under this section.
30-14-1409. Acts and practices not governed by part
The following acts and practices are not subject to the
provisions of this part:
(1) telephone calls in which the sale of goods or services
is not completed and payment or authorization of payment is
not required until after a face-to-face sales presentation
by the seller or telemarketer; and
(2) telephone calls initiated by a consumer that are not the
result of any solicitation by a seller or telemarketer.
30-14-1410. Disclosure and contract requirements
(1) When contacting a consumer, a seller or telemarketer
shall promptly disclose in a clear and conspicuous manner
the following:
(a) the identity of the seller or telemarketer;
(b) that the purpose of the call is to sell goods or
services;
(c) the nature of the goods or services; and
(d) that a purchase or payment is not necessary to be able
to win a prize or participate in a prize promotion.
(2) Prior to requesting any payment from the consumer a
seller or telemarketer shall disclose in a clear and
conspicuous manner the following information:
(a) the total cost of the goods or services;
(b) all material restrictions, limitations, and conditions
pertaining to the purchase of the goods or services;
(c) in any prize promotion:
(i) the odds of being able to receive the prize or, if the
odds are not calculable in advance, the factors used in
calculating the odds; and
(ii) the "no-purchase no-payment" method of participating in
the prize promotion with either instructions on how to
participate or an address or a local or toll-free telephone
number that consumers may write or call for information on
how to participate.
(3) A seller or telemarketer may not misrepresent, directly
or by implication, any of the following information:
(a) any material aspect of performance, effectiveness,
nature, or basic characteristics of goods or services;
(b) any material aspect of the nature or terms of the
seller's or telemarketer's refund, cancellation, exchange,
or repurchase policies; or
(c) any material aspect of a prize promotion, including but
not limited to the nature or value of the prize or that a
purchase or payment is required to win a prize or to
participate in a prize promotion.
(4) (a) Except as provided in subsection (6), in addition to
any other right to revoke an offer, in the case of a sale
made by telephone, the buyer may cancel the sale at any time
prior to signing an agreement or offer to purchase the goods
or services.
(b) Cancellation occurs:
(i) when written notice of cancellation is given to the
seller or telemarketer; or
(ii) when written notice of cancellation, properly addressed
and with postage prepaid, is deposited in the mail.
(c) A notice of cancellation does not have to be in the form
prescribed by the seller or telemarketer if it indicates the
intention of the buyer to cancel the sale of goods or
services.
(d) In the case of goods, a telemarketing sale may not be
canceled if the goods cannot be returned to the seller or
telemarketer in substantially the same condition as when
received by the buyer.
(5) (a) Except as provided in subsection (6), a
telemarketing sale may not be considered final until the
purchaser receives the notice required by subsection (5)(b).
(b) A seller or telemarketer shall furnish the purchaser, in
the same language as that principally used in the sales
presentation, a written notice, in not less than 10-point
boldface type, containing a statement in substantially the
following form:
"You, the purchaser, may cancel this transaction without any
penalty or obligation at any time prior to midnight of the
third business day after receipt of this notice. If you
cancel, any payments made by you under the sale will be
returned within 10 business days of the day your written
notice of cancellation is received by the seller and any
security interest connected to this transaction will be
canceled.
If you cancel, you must make available to the seller at your
residence, in substantially as good condition as when
received, any goods delivered to you under this sales
contract; or you may, if you wish, comply with the seller's
instructions regarding returning the goods at the seller's
expense and risk.
If you do make the goods available to the seller and the
seller does not pick up the goods within 20 days of the date
of your notice of cancellation or if the seller does not
agree to assume the expense and risk of the return of the
goods to the seller, you may retain or dispose of the goods
without any further obligation. If you fail to make the
goods available to the seller or if you agree to return the
goods to the seller and fail to return the goods, then you
remain liable for the performance of all your obligations
under the sales contract.
To cancel this transaction, mail, deliver, or telegram a
written notice of cancellation to (name of seller) at the
following address (address of the seller)."
(c) In addition to the notice required in subsection (5)(b),
the seller or telemarketer shall furnish the purchaser with:
(i) the seller's or telemarketer's name and the name of the
person to whom a notice of cancellation is to be given if
different from the seller's or telemarketer's name;
(ii) the legal name of the company for whom the seller or
telemarketer is soliciting;
(iii) the seller's or telemarketer's street address and
telephone number; and
(iv) the date and a description of the telephone
solicitation.
(6) A sale is not subject to the requirements of subsections
(4) and (5) if the seller or telemarketer, at a minimum, has
a policy of:
(a) accepting returns or canceling services in connection
with the return of unused and undamaged goods or canceled
services for a period of not less than 7 days after the date
of delivery to the consumer and providing a cash refund for
a cash purchase or issuing a credit for a credit purchase
applied to the account that was debited;
(b) disclosing the seller's or telemarketer's refund and
return policy to the consumer by telephone or in written
material included with advertising or promotional material
or with the delivery of the goods or services; and
(c) restoring payments or issuing credits pursuant to
subsection (6)(a) within 30 days after the date on which the
seller or telemarketer receives the returned goods or notice
of cancellation of services. A seller or telemarketer who
discloses in writing that a sale is subject to "satisfaction
guaranteed", "free inspection", "a no-risk guarantee", or
similar words or phrases must be considered to have met the
review and return for refund policy requirements of this
subsection.
(7) It is an unfair and deceptive act or practice to fail to
comply with or to misrepresent the requirements of this
section.
(8) In addition to subsection (7), it is a violation of this
part for any seller or telemarketer to engage in any other
unfair or deceptive conduct that would create a likelihood
of confusion or misunderstanding to any reasonable consumer.
(9) Failure to comply with the provisions of this section is
a violation of 30- 14-103 and is subject to the penalty
provisions of 30-14-1414 and the Montana Unfair Trade
Practices and Consumer Protection Act of 1973.
30-14-1411. Prohibited acts and practices
(1) It is a violation of this part for a seller or
telemarketer, purposely or knowingly, to engage in the
following conduct:
(a) advertise or represent that registration as a seller or
telemarketer equals an endorsement or approval by the state
or any political subdivision of the state;
(b) assist, support, or provide substantial assistance to
any telemarketer when the seller knew or should have known
that the telemarketer was engaged in any act or practice
violating 30-14-1408 or this section;
(c) request a fee in advance to remove derogatory
information from or improve a person's credit history or
credit record;
(d) request or receive payment in advance from a person to
recover or otherwise aid in the return of money or any other
item lost by the person in a prior telemarketing
transaction; however, this subsection does not apply to
services rendered to a person by a licensed attorney;
(e) obtain or submit for payment a check, draft, or other
form of negotiable paper drawn on a person's checking,
savings, bond, or other account without the person's express
written authorization; or
(f) procure the services of any professional delivery,
courier, or other pickup service to obtain immediate receipt
or possession of a person's payment unless the goods are
delivered with the opportunity to inspect them before any
payment is collected.
(2) Failure to comply with the provisions of subsection (1)
constitutes a violation of 30-14-103 and is subject to the
penalty provisions of 30-14-1414 and the Montana Unfair
Trade Practices and Consumer Protection Act of 1973.
30-14-1412. Abusive acts and practices
(1) It is an abusive telemarketing act or practice and a
violation of this part for any seller or telemarketer to
engage in the following conduct:
(a) use threatening, intimidating, or profane or obscene
language;
(b) engage any person repeatedly or continuously with
behavior a reasonable person would consider annoying,
abusive, or harassing;
(c) initiate a telemarketing call to a person who has stated
previously, in compliance with 16 CFR 310 and 47 CFR
64.1200, that the person does not wish to receive
solicitation calls from that seller or telemarketer;
(d) engage in telemarketing to a person's residence at any
time other than between 8 a.m. and 9 p.m. local time at the
called person's location;
(e) engage in any other conduct that would be considered
abusive to any reasonable consumer; or
(f) intentionally block a person using caller identification
or "*69" from accessing the seller's or telemarketer's phone
number. It is not a violation of this subsection (1)(f) to
provide a reasonable substitute name and number that
accurately identify the entity causing the call to be made
and a working telephone number at which the entity's
personnel can be contacted.
(2) The department may seek injunctive or declaratory relief
or any other remedy provided in Title 30, chapter 14, part
1, for any violations of this section.
30-14-1413. Civil remedies -- venue -- burden of proof
(1) The sale of any goods or services by an unregistered
seller or telemarketer that is required to register is void.
A person obtaining a judgment for damages, attorney fees, or
costs against a seller or telemarketer pursuant to this
section has the right to be reimbursed for those damages,
attorney fees, or costs from any bond or security posted by
the seller or telemarketer pursuant to the provisions of
30-14-1404.
(2) A person that suffers a loss or harm as a result of an
unfair and deceptive act or practice or a prohibited act or
practice is entitled to recover actual damages or $500,
whichever is greater, attorney fees, court costs, and any
other remedies provided by law.
(3) In addition to the remedies provided in subsection (2),
a person that suffers harm as a result of an abusive act or
practice is entitled to receive injunctive or declaratory
relief.
(4) (a) The department or a county attorney, on behalf of
state residents who have suffered a loss or harm as a result
of a violation of this part, may seek any remedy provided by
Title 30, chapter 14, part 1.
(b) The proper place for trial for an action based on a
claim of a violation of this part is the district court of
Lewis and Clark County or the county in which the alleged
violation occurred.
(5) In a civil proceeding alleging a violation of this part,
the burden of proving an exemption under 30-14-1405 or an
exception to a definition contained in 30-14-1403 is on the
person claiming the exemption or exception.
30-14-1414. Penalties -- misdemeanor and felony violations
-- burden of proof
(1) (a) A person who fails to follow the requirements of
30-14-1404, 30-14- 1408, 30-14-1410, 30-14-1411, or
30-14-1412 commits the offense of failure to comply with the
requirements of this part. Except as otherwise provided in
30- 14-1411, this offense is specifically intended to be an
absolute liability offense as provided for in 45-2-104.
(b) A person convicted of the offense of failure to comply
with the requirements of this part shall be fined not to
exceed $500 or be imprisoned in the county jail for a term
not to exceed 6 months, or both.
(c) Upon a second or subsequent conviction for the offense
of failure to comply with the requirements of this part, a
person shall be fined not to exceed $50,000 or be imprisoned
in the state prison for a term not to exceed 5 years, or
both.
(2) (a) A person commits the offense of telemarketing fraud
when the person knowingly violates this part with the
purpose of depriving an owner of property.
(b) A person convicted of the offense of telemarketing fraud
in which the value of the property does not exceed $500
shall be fined not to exceed $500 or be imprisoned in the
county jail for a term not to exceed 6 months, or both.
(c) A person convicted of the offense of telemarketing fraud
in which the value of the property exceeds $500 or the
person has engaged in telemarketing fraud as part of a
common scheme shall be fined not to exceed $50,000 or be
imprisoned in the state prison for a term not to exceed 10
years, or both.
(3) In any criminal proceeding alleging a violation of this
part, the burden of producing evidence to support a defense
based on an exemption under 30-14-1405 or an exception from
a definition in 30-14-1403 is on the person claiming the
exemption or exception.
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