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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0943.01D BWM HOUSE BILL 98­1415

STATE OF COLORADO

BY REPRESENTATIVE Schauer;

also SENATOR Alexander.

BUSINESS AFFAIRS & LABOR

A BILL FOR AN ACT

CONCERNING THE PROTECTION FROM UNCONSCIONABLE PRACTICES OF PARTIES TO TRANSACTIONS INVOLVING TRADE OR COMMERCE.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.)

Specifies that any unconscionable method, act, or practice in the conduct of any trade or commerce violates the provisions of the "Unfair Practices Act" whether it occurs before, during, or after the conduct of the trade or commerce. Sets forth circumstances to be considered by a court in determining whether a method, act, or practice is unconscionable. Authorizes the attorney general to enforce the provisions of this act through civil enforcement mechanisms and specifies that violations of this act constitute a misdemeanor like other violations of the "Unfair Practices Act".

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  Article 2 of title 6, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read:

6­2­108.5.  Unconscionable methods, acts, or practices. (1)  AS USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE REQUIRES, "TRADE" OR "COMMERCE" MEANS THE ADVERTISING, OFFERING FOR SALE, SELLING, LEASING, RENTING, COLLECTING DEBTS ARISING OUT OF THE SALE OR LEASE OF, OR DISTRIBUTING, GOODS OR SERVICES, EITHER TO OR FROM LOCATIONS WITHIN THE STATE OF COLORADO, OR DIRECTLY OR INDIRECTLY AFFECTING THE PEOPLE OF THIS STATE.

(2)  ANY UNCONSCIONABLE PRACTICE IN THE CONDUCT OF ANY TRADE OR COMMERCE VIOLATES THE PROVISIONS OF THIS ARTICLE WHETHER IT OCCURS BEFORE, DURING, OR AFTER THE CONDUCT OF THE TRADE OR COMMERCE.

(3)  IN DETERMINING WHETHER A PRACTICE IS UNCONSCIONABLE, THE FOLLOWING CIRCUMSTANCES SHALL BE TAKEN INTO CONSIDERATION BY THE COURT:

(a)  WHETHER THE ALLEGED VIOLATOR KNOWINGLY, OR WITH REASON TO KNOW, TOOK ADVANTAGE OF THE INABILITY OF THE PERSON REASONABLY TO PROTECT THE PERSON'S INTERESTS BECAUSE OF THE PERSON'S PHYSICAL INFIRMITY, IGNORANCE, ILLITERACY, INABILITY TO UNDERSTAND THE LANGUAGE OF AN AGREEMENT, OR SIMILAR FACTOR;

(b)  WHETHER, AT THE TIME THE TRANSACTION WAS ENTERED INTO, THE ALLEGED VIOLATOR KNEW OR HAD REASON TO KNOW THAT THE PRICE GROSSLY EXCEEDED THE PRICE AT WHICH SIMILAR PROPERTY OR SERVICES WERE READILY AVAILABLE IN SIMILAR TRANSACTIONS BY SIMILAR PERSONS, ALTHOUGH PRICE ALONE IS INSUFFICIENT TO PROVE AN UNCONSCIONABLE METHOD, ACT, OR PRACTICE;

(c)  WHETHER THE ALLEGED VIOLATOR KNOWINGLY, OR WITH REASON TO KNOW, INDUCED THE CONSUMER TO ENTER INTO A TRANSACTION THAT WAS EXCESSIVELY ONE­SIDED IN FAVOR OF THE ALLEGED VIOLATOR;

(d)  WHETHER THE SALES CONDUCT OR PATTERN OF SALES CONDUCT WOULD OUTRAGE OR OFFEND THE PUBLIC CONSCIENCE, AS DETERMINED BY THE COURT.

SECTION 2.  6­2­111 (2), Colorado Revised Statutes, is amended to read:

6­2­111.  Unlawful acts ­ remedy ­ license. (2)  Without prejudice to the rights of any person, firm, private corporation, municipal corporation, public corporation, or trade association to bring an action, the attorney general of the state of Colorado, as an incident to and power of his THE ATTORNEY GENERAL'S office, has like powers to those provided in subsection (1) of this section, and it is his THE ATTORNEY GENERAL'S duty, upon showing by any person, firm, private corporation, municipal corporation, public corporation, or trade association that there is reason to believe that any person subject to the terms of this article is violating any term of sections 6­2­103 to 6­2­108 6­2­108.5 or section 6­2­110, to prosecute actions for violation of any provisions of this article, and to seek injunctions or restraining orders to enjoin the continuance thereof by any defendant.

SECTION 3.  6­2­116, Colorado Revised Statutes, is amended to read:

6­2­116.  Penalty. Any person, firm, or corporation, whether as principal, agent, officer, or director, for himself or itself SUCH PERSON OR ENTITY, or for another person, or for any firm or corporation who violates any of the provisions of sections 6­2­103 to 6­2­108 6­2­108.5 or section 6­2­110, is guilty of a misdemeanor for each single violation and, upon conviction thereof, shall be punished by a fine of not less than one hundred dollars nor more than one thousand dollars, or by imprisonment for not more than six months, or by both such fine and imprisonment.

SECTION 4.  Effective date ­ applicability. This act shall take effect upon passage and shall apply to acts occurring or committed on or after said date.

SECTION 5.  Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.