SENATE BILL NO. 1037
October 16, 2024, Introduced by Senators CAVANAGH, BAYER, MOSS, GEISS,
POLEHANKI, MCBROOM, CHANG, VICTORY, KLINEFELT and MCMORROW and
referred to the Committee on Finance, Insurance, and Consumer Protection.
A bill to prescribe the rights and duties of parties to
telephone solicitation sales; to regulate certain telephone
solicitations; to provide for the powers and duties of certain
state governmental officers and entities; to prohibit certain
conduct; and to prescribe civil sanctions, penalties, and remedies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 1. This act may be cited as the "telephone solicitation
2 act".
3 Sec. 2. As used in this act:
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1 (a) "ADAD" means any device or system of devices that is used,
2 whether alone or in conjunction with other equipment, for the
3 purpose of automatically selecting or dialing telephone numbers.
4 (b) "Caller identification service" means a service or device
5 designed to provide the use of the service or device with the
6 telephone number of, or other information regarding the origination
7 of, a telephone communication. Caller identification service
8 includes automatic number identification.
9 (c) "Charitable organization" means a benevolent, educational,
10 philanthropic, humane, patriotic, or public safety organization of
11 persons that solicits or obtains contributions solicited from the
12 public for charitable or purported charitable purposes. Charitable
13 organization does not include a duly constituted religious
14 organization.
15 (d) "Contribution" means a promise, grant, or payment of money
16 or property of any kind or value, including a promise to pay,
17 except payments by members of an organization for membership fees,
18 dues, fines, or assessments, or for services rendered to individual
19 members, if membership in the organization confers a bona fide
20 right, privilege, professional standing, honor, or other direct
21 benefit, other than the right to vote, elect officers, or hold
22 offices, and except money or property received from a governmental
23 authority or foundation restricted as to use.
24 (e) "Do-not-call list" means the national Do-Not-Call Registry
25 maintained by the Federal Trade Commission.
26 (f) "Emergency telephone number" includes, but is not limited
27 to, a 9-1-1 number and an emergency number of a hospital, medical
28 physician or service office, health care facility, suicide
29 prevention or domestic violence center, poison control center, or
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1 fire protection or law enforcement agency.
2 (g) "Existing customer" means an individual who has purchased
3 goods or services from or has made a contribution to a charitable
4 organization to the person on whose behalf the telephone
5 solicitation was initiated within the 12 months before the
6 telephone communication.
7 (h) "Express verifiable authorization" means a written
8 agreement that includes all of the following:
9 (i) A signature of the subscriber being called. As used in this
10 subparagraph, "signature" includes an electronic or digital
11 signature, if the form of signature used is a valid signature form
12 under federal law or another law of this state.
13 (ii) Clear authorization that the telephone solicitor may
14 deliver or cause to be delivered a telephone solicitation to the
15 subscriber using an ADAD, a recorded message, or a prerecorded
16 voicemail.
17 (iii) The telephone number to which the subscriber authorizes a
18 telephone solicitation to be delivered.
19 (iv) A clear and conspicuous disclosure that informs the
20 subscriber of both of the following:
21 (A) By executing the agreement, the subscriber authorizes the
22 telephone solicitor to deliver or cause to be delivered a telephone
23 solicitation to the subscriber using an ADAD, a recorded message,
24 or a prerecorded voicemail.
25 (B) The subscriber is not required to directly or indirectly
26 sign the written agreement, or to agree to enter into the agreement
27 as a condition of purchasing any property, goods, or services.
28 (i) "Lead generation" means the sourcing, sale, subscription,
29 leasing, renting, distribution, purchase, wholesaling, or transfer
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1 of a list of telephone numbers utilized or intended to be utilized
2 for telephone solicitations.
3 (j) "Low-income worker" means an employee who receives annual
4 wages from the employer of the employee, excluding overtime wages,
5 at a rate less than 138% of the federal poverty level guidelines
6 for a family of 5 published annually in the Federal Register by the
7 United States Department of Health and Human Services under its
8 authority to revise the poverty line under 42 USC 9902.
9 (k) "Person" means an individual, partnership, corporation,
10 limited liability company, association, organization, governmental
11 entity, or other legal entity.
12 (l) "Residential telephone subscriber" or "subscriber" means an
13 individual residing in this state who has a residential, wireless,
14 or VoIP telephone service.
15 (m) "Telephone communication" means a communication via a
16 telephone, including, but not limited to, any of the following:
17 (i) A voice communication, including, but not limited to, those
18 made by use of an ADAD, a recorded message, in whole or in part, or
19 VoIP.
20 (ii) Transmission of a text message, a graphic message using
21 short message service, an image, a photograph, or a multimedia
22 message service, including those transmitted via mobile
23 application.
24 (n) "Telephone solicitation" means, except as provided in
25 subdivision (o), a telephone communication made for any of the
26 following purposes:
27 (i) To encourage the recipient to purchase, rent, receive, or
28 invest in goods or services or make a contribution to a charitable
29 organization.
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1 (ii) To encourage the recipient to provide personal
2 information, including, but not limited to, identity, financial, or
3 preferences information.
4 (iii) To encourage the recipient to accept or participate in any
5 employment, whether temporary or permanent, contracting,
6 investment, or other income opportunity.
7 (iv) To encourage the recipient to accept a prize promotion.
8 (v) To encourage the recipient or a member of the recipient's
9 family to avoid liability, legal or otherwise.
10 (vi) To obtain or attempt to obtain anything of value from the
11 recipient, including, but not limited to, under subparagraphs (i) to
12 (v), with the intent to defraud, violate this act, or commit another
13 unlawful act.
14 (o) Telephone solicitation does not include any of the
15 following:
16 (i) A telephone communication to a residential telephone
17 subscriber with that subscriber's express verifiable authorization.
18 (ii) A telephone communication to an existing customer of the
19 person on whose behalf the telephone communication is made, unless
20 the existing customer is a consumer who has requested to not
21 receive telephone communications from or on behalf of that person
22 under section 17(f).
23 (iii) A telephone communication made consistent with and not in
24 violation of any federal or state law relating to debt collection.
25 (iv) A telephone communication to a business telephone number,
26 unless the business has requested that it not receive telephone
27 communications from or on behalf of that person under section
28 17(f).
29 (p) "Telephone solicitor" means a person that makes, or causes
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1 to be made, a telephone solicitation within this state from within
2 or outside of this state.
3 (q) "VoIP" means a type of telephone communication service
4 utilizing voice over internet protocol or otherwise utilizing the
5 internet to generate, send, or receive telephone communications.
6 (r) "Vulnerable individual" means an individual who is 75
7 years of age or older or is a person with a disability as that term
8 is defined in section 103 of the persons with disabilities civil
9 rights act, 1976 PA 220, MCL 37.1103.
10 (s) "Vulnerable telephone number" means any of the following:
11 (i) An emergency telephone number.
12 (ii) A telephone number of a hospital, medical physician or
13 service office, health care facility, or health care provider.
14 (iii) A telephone number of a governmental entity.
15 (iv) A telephone number of a school or educational facility.
16 Sec. 3. A person shall not make a telephone solicitation using
17 a recorded message in whole or in part.
18 Sec. 5. (1) A telephone solicitor shall not make a telephone
19 solicitation to a residential telephone subscriber whose home or
20 wireless telephone number is on the most current version of the do-
21 not-call list. This section does not apply to a telephone
22 solicitation made on behalf of a charitable organization, but only
23 if all of the following apply:
24 (a) The telephone solicitor making the telephone call is
25 either a volunteer working under the direct supervision of an
26 employee of the charitable organization or an employee of the
27 charitable organization.
28 (b) The telephone solicitor making the telephone call
29 immediately discloses both of the following:
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1 (i) The solicitor's true first and last name.
2 (ii) The name, address, and telephone number of the charitable
3 organization.
4 (2) A person shall not include the telephone number of a
5 residential telephone subscriber that is on the most current
6 version of the do-not-call list in a lead generation.
7 (3) There is a rebuttable presumption that a telephone
8 solicitation made to any telephone number with an area code of this
9 state is made to a residential telephone subscriber.
10 Sec. 7. (1) At the beginning of a telephone solicitation, the
11 organization or other person on whose behalf the call is initiated
12 shall ensure that the telephone solicitor states the telephone
13 solicitor's true first and last name and the full name, address,
14 and telephone number of the organization or other person on whose
15 behalf the call is initiated.
16 (2) The organization or other person described in subsection
17 (1) shall ensure that an individual is available to answer the
18 telephone number provided under subsection (1) at any time during
19 traditional business hours between 9 a.m. and 5 p.m. local time at
20 the subscriber's residence.
21 (3) The organization or other person described in subsection
22 (1) shall ensure that the individual answering the telephone number
23 under subsection (2) provides a residential telephone subscriber
24 who calls that telephone number with information to describe the
25 purpose and operations of the organization or other person on whose
26 behalf the telephone solicitation was made and with information to
27 describe the purpose of the telephone solicitation described in
28 subsection (1).
29 (4) A telephone solicitor shall not do any of the following:
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1 (a) Block, restrict, circumvent, or otherwise interfere with a
2 subscriber's caller identification service so that the telephone
3 number of the telephone solicitor is not displayed properly on the
4 caller identification service of the subscriber.
5 (b) Display, or cause to be displayed, a fictitious or
6 misleading name or telephone number, or to otherwise misrepresent
7 the location of origin of a telephone solicitation or the identity
8 of the telephone solicitor, on a subscriber's caller identification
9 service.
10 (c) Use a third party to display, or cause to be displayed, a
11 fictitious or misleading name or telephone number, or to otherwise
12 misrepresent the location of origin of a telephone solicitation or
13 the identity of the telephone solicitor, on a subscriber's caller
14 identification service.
15 (d) Use a telephone number associated with a direct inward
16 dialing or direct dial-in system or use a telephone number
17 otherwise purchased, leased, licensed, or rented from a person, for
18 any telephone solicitation that misrepresents the location of
19 origin of a telephone solicitation or the identity of the telephone
20 solicitor, or otherwise violates this act.
21 (5) Subsection (4) does not create liability for a carrier or
22 VoIP whose action is undertaken for the purpose of complying with a
23 wireless local number portability requirement promulgated by the
24 Federal Communications Commission.
25 Sec. 9. (1) A person shall not do any of the following in
26 using an ADAD:
27 (a) Use the ADAD for a telephone solicitation that otherwise
28 violates this act.
29 (b) Use the ADAD for a telephone solicitation unless the list
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1 of numbers from which the ADAD selects telephone numbers excludes
2 both of the following:
3 (i) Vulnerable telephone numbers.
4 (ii) Telephone numbers of subscribers who are on the most
5 current version of the do-not-call list.
6 (2) Subject to subsection (3), subsection (1) does not apply
7 to a telephone solicitation to which any of the following apply:
8 (a) The telephone solicitation is made to a subscriber with
9 that subscriber's express verifiable authorization.
10 (b) The telephone solicitation is made to an existing customer
11 of the person on whose behalf the telephone communication is made,
12 unless the existing customer is a consumer who has requested to not
13 receive telephone communications from or on behalf of that person
14 under section 17(f).
15 (c) The telephone solicitation is made by a representative of
16 an entity utilizing an emergency telephone number.
17 (d) The telephone solicitation is made by a representative of
18 a school or educational facility if the subscriber is an employee,
19 student, or student's guardian or family member of the school or
20 educational facility.
21 (e) The telephone solicitation is made consistent with and not
22 in violation of any federal or state law relating to debt
23 collection.
24 (3) A person making a telephone solicitation must demonstrate
25 that subsection (2) applies before using an ADAD under subsection
26 (1).
27 Sec. 11. (1) A telephone solicitor may not transfer a
28 telephone solicitation that has reached a subscriber to 1 or more
29 persons if the telephone solicitation otherwise violates this act.
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1 (2) A person shall not provide substantial assistance or
2 support to another person or a telephone solicitor if the person
3 knows, should know, or avoids knowing that the other person or
4 telephone solicitor is engaged in any method, act, or practice that
5 violates this act.
6 Sec. 13. (1) A contract made pursuant to a telephone
7 solicitation must satisfy all of the following requirements:
8 (a) The contract must be in writing and signed by the
9 subscriber.
10 (b) The contract must contain the name, address, and business
11 telephone number of the seller, the total price of the contract,
12 and a detailed description of the goods or services being sold.
13 (c) The description of goods or services as stated in the
14 contract must be the same as the description principally used in
15 the telephone solicitation.
16 (d) The contract must contain, in bold, conspicuous type
17 immediately preceding the signature the words "You are not
18 obligated to pay any money unless you sign this contract and return
19 it to the seller.".
20 (e) The contract shall not exclude from its terms any oral or
21 written representations made by the telephone solicitor to the
22 subscriber in connection with the transaction.
23 (2) Except as otherwise provided in subsection (3), a contract
24 made under a telephone solicitation is not valid and enforceable
25 against a consumer unless the contract complies with this section.
26 (3) This section does not apply to either of the following:
27 (a) A sale in which all of the following apply:
28 (i) A prior payment is not made to a seller.
29 (ii) An invoice accompanies the goods or services.
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1 (iii) A subscriber is allowed 7 days to cancel the servic