Kentucky Negative Option Plan
KRS § 367.570 - § 367-585
CITATION:
KRS Chapter 367
Negative Option Plan
367.570 Definitions.
367.575 Unfair practices -- Duties of Attorney General.
367.580 Contents of promotional material -- Time limits for mailing.
367.585 Duties of the seller.
367.570 Definitions.
For purposes of KRS 367.570 to 367.585 unless the context requires otherwise:
(1) "Negative option plan" means a contractual plan or arrangement under which a seller periodically sends to subscribers an announcement which identifies merchandise (other than annual supplements to previously acquired merchandise) it proposes to send to subscribers to such plan, and the subscribers thereafter receive and are billed for the merchandise identified in each such announcement, unless by a date or within a time specified by the seller with respect to each such announcement the subscribers, in conformity with the provisions of such plan, instruct the seller not to send the identified merchandise.
(2) "Subscriber" means any person who has agreed to receive the benefits of, and assume the obligations entailed in, membership in any negative option plan and whose membership in such negative option plan has been approved and accepted by the seller.
(3) "Contract-complete subscriber" refers to a subscriber who has purchased the minimum quantity of merchandise required by the terms of membership in a negative option plan.
(4) "Promotional material" refers to an advertisement containing or accompanying any device or material which a prospective subscriber sends to the seller to request acceptance or enrollment in a negative option plan.
(5) "Selection" refers to the merchandise identified by a seller under any negative option plan as the merchandise which the subscriber will receive and be billed for, unless by the date or within the period specified by the seller, the subscriber instructs the seller not to send such merchandise.
(6) "Announcement" refers to any material sent by a seller using a negative option plan in which the selection is identified and offered to subscribers.
(7) "Form" refers to any form which the subscriber returns to the seller to instruct the seller not to send the selection.
(8) "Return date" refers to a date specified by a seller using a negative option plan as the date by which a form must be received by the seller to prevent shipment of the selection.
(9) "Mailing date" refers to the time specified by a seller using a negative option plan as the time by or within which a form must be mailed by a subscriber to prevent shipment of the selection.
Effective: July 13, 1984
History: Amended 1984 Ky. Acts ch. 111, sec. 150, effective July 13, 1984. -- Created
1978 Ky. Acts ch. 304, sec. 1, effective June 17, 1978.
367.575 Unfair practices -- Duties of Attorney General.
(1) In connection with the sale, offering for sale, or distribution of goods and merchandise in "trade" or "commerce" as defined by KRS 367.110(2), it is an unfair, false, misleading and deceptive practice as prohibited by KRS 367.170 for a seller in connection with the use of any negative option plan to fail to comply with the requirements of KRS 367.570 to 367.585.
(2) All of the remedies, powers and duties provided for the Attorney General by the Consumer Protection Act appertaining to acts declared unlawful by KRS 367.170 shall apply with equal force and effect to acts or practices declared unlawful by KRS 367.570 to 367.585.
(3) KRS 367.570 to 367.585 shall not be construed to limit or restrict the exercise of powers or the performance of the duties of the Attorney General which he is authorized to exercise or perform under any other provision of law.
Effective: June 17, 1978
History: Created 1978 Ky. Acts ch. 304, sec. 2, effective June 17, 1978.
367.580 Contents of promotional material -- Time limits for mailing.
(1) In connection with the use of any negative option plan, promotional material shall clearly and conspicuously disclose the material terms of the plan, including:
(a) That aspect of the plan under which the subscriber must notify the seller, in the manner provided for by the seller, if he does not wish to purchase the selection;
(b) Any obligation assumed by the subscriber to purchase a minimum quantity of merchandise;
(c) The right of a contract-complete subscriber to cancel his membership at any time;
(d) Whether billing charges will include an amount for postage and handling;
(e) A disclosure indicating that the subscriber will be provided with at least ten
(10) days in which to mail any form, contained in or accompanying an announcement identifying the selection, to the seller;
(f) A disclosure that the seller will credit the return of any selections sent to a subscriber, and guarantee to the postal service or the subscriber postage to return such selections to the seller when the announcement and form are not received by the subscriber in time to afford him at least ten (10) days in which to mail his form to the seller;
(g) The frequency with which the announcements and forms will be sent to the subscriber, and the maximum number of announcements and forms which will be sent to him during a 12-month period.
(2) In connection with the use of any negative option plan, prior to sending any selection, the seller shall mail to its subscribers, within the time specified by subsection (3) of this section:
(a) An announcement identifying the selection;
(b) A form, contained in or accompanying the announcement, clearly and conspicuously disclosing that the subscriber will receive the selection identified in the announcement unless he instructs the seller that he does not want the selection, designating a procedure by which the form may be used for the purpose of enabling the subscriber so to instruct the seller, and specifying either the return date or the mailing date.
(3) The seller shall mail the announcement and form either at least twenty (20) days prior to the return date or at least fifteen (15) days prior to the mailing date, or provide a mailing date at least ten (10) days after receipt by the subscriber, provided, however, that whichever system the seller chooses for mailing the announcement and form, such system must provide the subscriber with at least ten (10) days in which to mail his form.
Effective: June 17, 1978
History: Created 1978 Ky. Acts ch. 304, sec. 3, effective June 17, 1978.
367.585 Duties of the seller.
(1) No seller in connection with the use of a negative option plan shall refuse to credit, for the full invoiced amount thereof, the return of any selection sent to a subscriber, and to guarantee to the postal service or the subscriber postage adequate to return such selection to the seller, when:
(a) The selection is sent to a subscriber whose form indicating that he does not want to receive the selection was received by the seller by the return date or was mailed by the subscriber by the mailing date;
(b) Such form is received by the seller after the return date, but has been mailed by the subscriber and postmarked at least three (3) days prior to the return date;
(c) Prior to the date of shipment of such selection, the seller has received from a contract-complete subscriber, a written notice of cancellation of membership adequately identifying the subscriber; however, this provision is applicable only to the first selection sent to a canceling contract-complete subscriber after the seller has received written notice of cancellation. After the first selection shipment, all selection shipments, thereafter are deemed to be unsolicited as defined in KRS 365.710;
(d) The announcement and form are not received by the subscriber in time to afford him at least ten (10) days in which to mail his form.
(2) No seller shall:
(a) Fail to notify a subscriber known by the seller to be within any of the circumstances set forth in subsection (1) of this section, that if the subscriber elects, the subscriber may return the selection with return postage guaranteed and receive a credit to his account.
(b) Refuse to ship within four (4) weeks after receipt of an order merchandise due subscribers as introductory and bonus merchandise, unless the seller is unable to deliver the merchandise originally offered due to unanticipated circumstances beyond the seller's control and promptly makes a reasonably equivalent alternative offer. However, where the subscriber refuses to accept alternatively offered introductory merchandise, but instead insists upon termination of his membership due to the seller's failure to provide the subscriber with his originally requested introductory merchandise, or any portion thereof, the seller must comply with the subscriber's request for cancellation of membership, provided the subscriber returns to the seller any introductory merchandise which already may have been sent him.
(c) Fail to terminate promptly the membership of a properly identified contract complete subscriber upon his written request.
(d) Ship, without the express consent of the subscriber, substituted merchandise for that ordered by the subscriber.
Effective: June 17, 1978
History: Created 1978 Ky. Acts ch. 304, sec. 4, effective June 17, 1978.
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