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Committee Statement — Senate Commerce Committee, Senate No. 902 (New Jersey, February 10, 2022)

Summary

Senate Commerce Committee Statement to Senate, No. 902, with committee amendments, State of New Jersey, dated February 10, 2022, reporting Senate Bill No. 902 favorably and with committee amendments. The statement says the bill, as amended, establishes consumer protection requirements for service contract providers, including bond requirements, clear disclosure of automatic renewal provisions, and minimum methods for a consumer to cancel. It requires disclosure of the identities of company principals and of litigation or enforcement matters concerning service contracts during the prior five years, and requires providers and administrators to register with the Division of Consumer Affairs. Providers that use a public utility's trade name would have to disclose that the contract is offered by a third party.

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“Committee Statement — Senate Commerce Committee, Senate No. 902 (New Jersey, February 10, 2022).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2022-02-10-scm-s902-s1-7d97bcabc8/, SHA-256 8c97dd7e9922355b0ec9f002d49118af4cdafe31ed626077f1a712d61076d238.

Full text

     SENATE COMMERCE COMMITTEE

                     STATEMENT TO

                    SENATE, No. 902
                    with committee amendments



 STATE OF NEW JERSEY
                    DATED: FEBRUARY 10, 2022

     The Senate Commerce Committee reports favorably and with
committee amendments Senate Bill No. 902.
    As amended, this bill establishes certain consumer protection
requirements upon service contract providers, or companies that
offer contracts purporting to cover repairs to a consumer’s home,
car, or other goods.
    In particular, the bill clarifies that legal requirements pertaining
to service contracts apply to administrators, as well as persons
contractually obligated to provide services under a contract, as
provided under current law. The bill requires providers to meet
certain bond requirements and provides that service contract
providers are to clearly and conspicuously disclose automatic
renewal provisions, provide notice prior to the cancellation
deadline, and provide certain minimum methods for a consumer to
cancel a contract.
    In addition, the bill requires disclosure of the identities of all
company principals, information regarding any litigation or
enforcement matters concerning service contracts filed or
prosecuted during the prior five years in which a principal was
named or involved, and information about the provider’s business
operations, including the total amounts collected in provider fees
and the total amounts paid out in claims or charges for services
provided under the contract.
    The bill requires providers who use a public utility’s trade name
or identifying information to clearly and prominently disclose:
    (1) that the service contract is not being offered by the public
utility but by a third party entity that is not part of the public utility,
and that an entity other than the public utility will be responsible for
performing the services advertised;
    (2) the name of the provider that offers the service contract and,
if applicable, the name of the administrator;
    (3) the provider’s contact information and, if applicable, the
name of the administrator’s contact information;
    (4) that the communication is an advertisement; and
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   (5) if applicable, that the billing for the services to be provided
will be conducted through a public utility and that the public utility
is an entity other than the provider.
   Lastly, the bill requires providers and administrators to register
with the Division of Consumer Affairs and allows the division to
post non-confidential information about a provider or administrator
publicly on its website.

COMMITTEE AMENDMENTS
    The committee amended the bill to
    (1) remove administrators of service contracts from the definition
of “provider” and add a definition of “regulated entity” that means a
provider or an administrator;
    (2) stipulate that certain provisions of the bill apply to
administrators in addition to providers;
    (3) change the conditions under which the use of the term
“extended warranty” may be used;
    (4) require an advertisement for a service contract offered by an
entity other than a public utility in a manner that uses a public utility’s
trade name or other identifying information to clearly and prominently
disclose certain information relative to the administrator of the service
contract in addition to the provide that offers the service contract;
    (5) stipulate that nothing in the bill is to be construed to impose
liability on news media for accepting or publishing advertising that
may fall within the scope of the bill; and
    (6) make certain technical corrections.

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