Legislative Analysis
Phone: (517) 373-8080
THIRD-PARTY ONLINE SERVICES http://www.house.mi.gov/hfa
House Bill 4015 (H-3) as reported from committee Analysis available at
Sponsor: Rep. Sarah L. Lightner http://www.legislature.mi.gov
Committee: Regulatory Reform
Complete to 2-23-21
BRIEF SUMMARY: House Bill 4015 would amend the Michigan Consumer Protection Act to
impose notification requirements on certain nonstate entities that offer online services that
are performed by the state and to provide that failure to comply with those requirements is
an unfair trade practice in violation of the act.
FISCAL IMPACT: The bill would not have a direct fiscal impact on the state or on local units of
government.
THE APPARENT PROBLEM:
Many services can be conducted online, and many state and local governmental
transactions are offered free to consumers. However, consumers have reported conducting
transactions, such as renewing a vehicle registration from what they believed was the
Department of State (SOS) website, only to discover when the credit card bill arrived that
they had not done business with the SOS but with a private company and that a transaction
fee had been imposed in addition to the cost of the requested service. Reportedly, some of
the transaction fees were close to or exceeded the cost of the service.
It has been suggested that allowing consumers and the attorney general to seek relief under
the Consumer Protection Act may deter businesses from creating websites that fail to
clearly disclose that they are not a governmental agency and whether a fee will be charged
to conduct a transaction or access otherwise publicly accessible information.
THE CONTENT OF THE BILL:
The bill would add section 3m to the act to provide that if a third party offers online
services that are performed by an agency, department, or division of the state and that third
party is not affiliated or under contract to perform those online services for an agency,
department, or division of the state, the third party must do all of the following:
• Have a conspicuous notification on its website stating:
o That it is not an agency, department, or division of the state.
o That its services are not endorsed or approved by an agency, department, or
division of the state.
o That it is not affiliated or under contract to perform online services for an
agency, department, or division of the state.
• Provide a link on its website to the website of the state agency, department, or
division where a person can use the online service.
House Fiscal Agency Page 1 of 3
• Before a transaction for an online service is completed, ensure that there is a
conspicuous notification of any fee it will charge for the online service.
Third party would mean a person that is not an agency, department, or division of
the state.
Online services would not include the sharing of public information that is
otherwise accessible and does not require consumers to provide payment or
personal information to access it.
Conspicuous notification would mean, at a minimum, for a notification that is on
a website, a notification that is on the opening page of that website, is in a type size
that is the same as or larger than the largest type size on that website, and is in
boldface, capital letters.
Failure to comply with the above requirements would be a violation of section 3m.
The Consumer Protection Act states that unfair, unconscionable, or deceptive methods,
acts, or practices in the conduct of trade or commerce are unlawful, and it lists activities
that constitute those methods, acts, or practices.
The bill would add a violation of the new section 3m to that list.
Generally speaking, a person who suffers loss as a result of a violation of the act regarding
an unfair, unconscionable, or deceptive method, act, or practice in the conduct of trade or
commerce may bring a civil action to recover actual damages or $250, whichever is greater,
along with reasonable attorney fees. A person may also bring an action to obtain a
declaratory judgment that a method, act, or practice is unlawful under the act or an
injunction against a person who is engaging or is about to engage in a method, act, or
practice that is unlawful under the act. The act also provides for a class action to be brought
under certain circumstances. In addition, the act authorizes the attorney general to bring an
action to permanently enjoin a defendant from engaging in a method, act, or practice that
is unlawful under the act, and a court may assess a fine of up to $25,000 if the method, act,
or conduct is found to be unlawful.
The bill would take effect 90 days after its enactment.
MCL 445.903 and proposed MCL 445.903m
BACKGROUND:
House Bill 4015 is similar to HB 6173 of the 2019-20 legislative session. That bill was
referred from the House Committee on Regulatory Reform to the House Committee on
Ways and Means.
House Fiscal Agency HB 4015 (H-3) as reported Page 2 of 3
ARGUMENTS:
For:
The bill would address a concern brought by constituents who believed they were
conducting business transactions on a government website for free, such as paying a bill or
renewing a driver license or vehicle registration, only to find out later when a credit card
bill arrived that they were instead on the website of a commercial company that imposed a
transaction fee for the service. It is not unlawful for a commercial business to offer similar
services or information for a fee to consumers, but House Bill 4015 would make it clear
that to do so without clearly disclosing any transaction fees, or to design a website that
looks similar to a governmental site without distinguishing it as a private business, would
constitute unfair and deceptive practices under the Michigan Consumer Protection Act.
There may be a reason a consumer chooses to use a commercial fee-for-service website,
for example if he or she finds it easier or less time-consuming to navigate than a free
governmental site. However, that choice should be an informed choice.
Further, the committee-reported version of the bill addresses an issue raised by tech
industry members regarding the impact a vague reference to “online service” in the
introduced bill could have had on start-ups, nonprofits, and businesses that are under
contract with the state or that offer ancillary services and information drawn from public
websites. The H-3 substitute would make clearer that a website that shares public
information otherwise accessible without charging a fee or requiring a person to share
personal information would not constitute an unfair or deceptive practice under the
Consumer Protection Act.
POSITIONS:
The following entities indicated support for the bill:
• Department of the Attorney General (2-9-21)
• TechNet (2-23-21)
• RELX, Inc. (2-23-21)
Legislative Analyst: Susan Stutzky
Fiscal Analyst: Michael Cnossen
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations, and does not constitute an official statement of legislative intent.
House Fiscal Agency HB 4015 (H-3) as reported Page 3 of 3

Statutes affected:
House Introduced Bill: 445.903
As Passed by the House: 445.903