Report Title:

Consumer Bill of Rights

Description:

Expands and codifies consumers' rights by enumerating specific requirements of insurers, public utilities, and cable operators.

THE SENATE

S.B. NO.

1261

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to the consumer bill of rights.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that safe, reliable, and affordable insurance, electricity, gas, telephone, and cable services are basic necessities of modern life. However, frequently, service disputes arise between consumers and insurers, utilities, and cable operators. Consumers are entitled to protections from unfair, deceptive, unconscionable, fraudulent, or anti-competitive practices in the provision of these services. The legislature further finds that consumers should clearly understand their basic rights and responsibilities, including but not limited to the right to a clear and concise bill, the right to know how the bill is figured, the right to check a bill for accuracy, the right to fair credit and deposit policies, the responsibility to pay a bill, the right to question or disagree with a service provider, and the right to receive continuous service if their responsibilities are satisfied.

The purpose of this Act is to establish a consumer bill of rights that expands, clarifies, and states simply the legal rights and obligations of consumers and insurers, utilities, and cable operators. This consumer bill of rights shall assist consumers in acquiring a working knowledge of the law and enable consumers to negotiate differences with an insurer, utility, or cable operator without the aid of the insurance commissioner, the public utilities commission, or any other appropriate regulatory or administrative body.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

universal consumer bill of rights

§   -1 Purpose. The purpose of this chapter is to establish uniform standards for billing, security deposits, terminations of service, cancellations of coverages, reconnections of service, renewals of coverages, and resolutions of complaints of residential utility, cable, and insurance consumers.

§   -2 Applicability. Notwithstanding any other law to the contrary, this chapter shall apply to:

(1) Residential services provided by electric, gas, and telephone utilities subject to regulation by the public utilities commission;

(2) Residential cable service provided by cable operators subject to regulation by the department of commerce and consumer protection; and

(3) All insurance services provided by insurers subject to regulation by the insurance commissioner.

§   -3 Definitions. As used in this chapter, unless the context otherwise requires:

"Cable operator" means the term as defined in section 440G-3.

"Customer" means an individual who contracts with an insurer or service provider for insurance coverage or telephone, electric, gas, water, or cable services.

"Insurer" means the term as defined in section 431:1-202.

"Regulatory body" means the government body responsible for regulating the particular industry of the service provider.

"Service" means telephone, electric, gas, water, or cable service.

"Service provider" means an insurer, utility, or cable operator, unless specifically excluded.

"Utility" means any public utility as defined in section 269-1, that provides telephone, electricity, gas, or water services, and any cable operator as defined in section 440G-3.

§   -4 Discrimination prohibited. An insurer, utility, or cable operator shall not discriminate against or penalize a customer for exercising any right granted by these rules.

§   -5 Billing; frequency; included information. (a) Every utility and cable operator shall render a bill once during each billing month to every customer in accordance with approved rates. Every insurer shall render a bill for premiums once during each billing cycle, as provided for in the insurance contract or policy.

(b) Each bill rendered by a service provider shall include the following, as applicable:

(1) The beginning and ending dates of the billing month;

(2) The due date;

(3) Any previous balance;

(4) The amount due for the services;

(5) The amount attributable to any additional service charges, including an itemization of any taxes due;

(6) The total amount due;

(7) A notation that information will be mailed upon request regarding applicable rate schedules or how to calculate the accuracy of the bill;

(8) A prominent explanation of any rate or premium increase, including the date on which the increased rate or premium will be effective;

(9) The address of the location, the telephone number, the person, or the vehicle, as applicable, for which the charges are being rendered charged;

(10) A statement that any inquiry of complaint regarding the bill should be made prior to the due date in order to avoid late charges; and

(11) The address and phone number to which an inquiry or complaint should be directed.

§   -6 Payment of bills. (a) The date of payment shall be considered as the day the payment is received at the offices of the service provider or an authorized collection agent, the day before payments are removed from the receptacles provided for after-hours collection at the service provider's offices, or the third day preceding the day when payments are received by mail, as applicable.

(b) No late payment charge shall be levied on all amounts, including deferred payment installations, paid by the due date, or on amounts in dispute before the appropriate regulatory body. Amounts paid after the due date shall bear a late payment charge of one per cent, and an additional late payment charge at a rate of one and one-half per cent on the remaining unpaid balance per billing month thereafter.

§   -7 Security deposits; prohibited; exceptions. (a) New customers shall not be required to provide a cash deposit or guarantee as a condition of service.

(b) Former or existing customers shall not be required to provide a cash deposit or guarantee as a condition of new service unless:

(1) The service of the customer has been terminated or cancelled for nonpayment of a delinquent account not in dispute within the previous twelve months; or

(2) The customer, in an unauthorized manner, has interfered with or diverted the service or delivered on or about the customer's premises within the twelve months immediately preceding the customer's request for new service; provided that:

(A) The customer's service was last terminated for this reason and the that service provider had previously notified the customer in writing to this effect; and

(B) The customer either did not file a complaint with the appropriate regulatory or administrative body regarding the termination or cancellation, or, if a complaint was filed, final action was taken that was unfavorable to the customer; or

(3) The customer's account has been delinquent for an excess of forty-five days at least three times within the previous twelve months; or

(4) The customer has an outstanding balance due the service provider for the applicable service; provided that the provision of new service may be conditioned upon payment of the outstanding balance.

When a deposit or guarantee is required as a condition of new service to a former customer, the customer shall be notified in writing of the reason therefore, the amount of deposit required, and that the deposit or guarantee may be paid in installments.

(c) Current customers shall not be required to provide a cash deposit or guarantee as a condition of continued service unless:

(1) The service provided has been interfered with or diverted in an unauthorized manner within the previous twelve months; or

(2) The customer's account has been delinquent for an excess of forty-five days at least three times within the previous twelve months.

(d) A service provider shall not require a cash deposit or guarantee as a condition of new or continued service on the basis of credit bureau rating, income level, home ownership, residence location, race, color, creed, sex, age, national origin, or any other criterion except those stated in this section.

(e) No insurer shall require a new, former, or current customer to provide a security deposit or guarantee as a condition of obtaining a policy with the insurer.

(f) No deposit shall exceed the lesser of $100 or twice the estimated maximum monthly bill of the customer over twelve months. If the deposit requirement is $35 or more, the deposit may be paid in a minimum of three equal monthly installments with the first installment due prior to connection or reconnection.

(g) Interest shall be paid on deposits held from the date the deposit is made until the date the deposit has been refunded or until an effort has been made to refund the deposit. Interest paid shall be equal to simple interest on deposits with the rate being established not later than January 15 of each year, equal to the average annual yields of one-year Treasury bills for September, October, and November of the preceding year.

(h) A deposit and accrued interest shall be refunded promptly by the service provider upon satisfactory payment by the customer of all proper charges for service for twelve successive months; provided that the service provider may withhold return of deposit funds pending resolution of any dispute. Payment is satisfactory if the customer's account has not been terminated involuntarily or the customer's account has not been delinquent for an excess of forty-five days at least three times within the previous twelve months. Upon termination of service, the deposit with accrued interest shall be credited to any outstanding final bill and any remaining balance shall be returned to the customer.

(i) The service provider shall maintain a record of all deposits, showing the customer's name and address or other relevant identifying data, the amount of the deposit, the date it was paid, and the interest earned and paid on it. Each customer posting a deposit shall promptly receive a receipt containing at minimum the following information:

(1) The customer's name;

(2) The date of payment;

(3) The amount of payment; and

(4) The statement of the terms and conditions applicable to deposits.

§   -8 Involuntary termination or cancellation of service or coverage; when authorized. (a) A service provider shall not terminate service or cancel insurance coverage except upon proper notice and under the following circumstances:

(1) Nonpayment of a delinquent account;

(2) Failure to post a cash security deposit or guarantee of payment as authorized by this chapter;

(3) Failure to comply with the terms of the service agreement or insurance contract;

(4) Failure to pay directory advertising charges;

(5) Unauthorized interference with or diversion of service on or about the customer's premises;

(6) Denial of access at reasonable times to the customer's premises for the purpose of inspection, meter reading, maintenance, or replacement when the service provider has requested access in writing; or

(7) Creation of an unsafe condition or an adverse effect on the integrity of an energy or communication delivery service, or violation of a government regulation.

(b) The following shall not constitute grounds for termination of service or cancellation of an insurance contract:

(1) Failure to pay for service at a different location or on a separate account or contract; except for unpaid balances transferred from one account to another;

(2) Failure to pay for nonresidential service;

(3) Failure of a customer to pay for merchandise, appliances, or services not subject to rates approved by the appropriate regulatory body; or

(4) Failure to pay an outstanding account of any other person, except where charges have been transferred to the customer's account pursuant to the customer's guarantee.

(c) A service provider shall not terminate service when a complaint regarding a dispute involving the account in question has been filed with the appropriate regulatory body; provided that payments are continued to be made for amounts that are not in dispute.

§   -9 Procedures for involuntary termination or cancellation of service or coverage. (a) No service provider shall terminate service unless a written termination notice has been sent to the customer at the billing address by first class mail at least fifteen days prior to the date of the proposed termination, or thirty days for cancellation of an insurance policy by an insurer; provided that payment of the bill by the customer within the fifteen days, or thirty days, as applicable, shall result in no interruption in service or coverage. Nothing in this chapter shall preclude a service provider from taking immediate action necessary to correct any condition which poses a threat to the safety of the customer, the public, or the integrity of the service provider's system. Where corrective action is taken, the service provider shall thereupon discontinue service to any customer whom it believes to be responsible for creation of the condition until it has complied with the notice requirements herein. No notice shall be necessary in the event that the service or coverage has been terminated due to theft of services or the violation of any local fire, health, or safety statute or ordinance.

(b) A notice for termination of service or cancellation of coverage shall include:

(1) The customer's name and address;

(2) The customer's account or policy number;

(3) The address where the service is to be discontinued, if different;

(4) The name of the person or a description of the vehicle for which coverage is to be discontinued;

(5) The reason for the proposed termination of service or cancellation of coverage;

(6) The earliest date on which service or coverage will be terminated in the absence of payment or adjustment;

(7) The telephone number and address of the service provider and a statement inviting contact for resolution of the matter; and

(8) The right of recourse to the appropriate regulatory body.

A service provider shall not terminate service for the period after 5:00 p.m. Thursday and before 8:00 p.m. Monday, except that a utility may terminate service on Friday or Saturday, if the meter is located on the inside of the premises or is otherwise not readily accessible and the utility has previously unsuccessfully attempted to gain access to the meter on at least two week days.

(c) The service provider shall make at least two attempts for actual contact with the customer prior to termination or cancellation. At least two days prior to the date determined for termination or cancellation, a service provider shall make reasonable efforts to contact the customer by telephone to advise the customer of the pending action and what steps may be taken to avoid termination or cancellation. Except as to insurance contracts, if prior actual contact has not been made and the customer or other responsible person is not on the premises, termination of service shall not occur. The field service representative shall leave a notice reasonably calculated to be seen by the person residing in the house that service may be discontinued as soon as the next business day unless outstanding bills are paid.

(d) A field service representative shall have a statement of the amount due and inquire as to whether the bill has been paid. Upon the presentation of evidence that reasonably indicates that the bill has been paid or that the bill is currently the subject of a pending proceeding before the appropriate regulatory body, service shall not be terminated. A field service representative shall be authorized to accept payment and, if full payment is tendered, service shall not be terminated.

(e) Upon satisfaction of the two attempts for actual contact, the service provider may terminate service to a customer on the date specified in the notice or within a reasonable time thereafter. When service is terminated, the service provider employee shall leave a notice, as applicable, reasonably calculated to be seen by persons residing on the premises stating that service has been terminated and the address and telephone number of the service provider where the customer may arrange to have service restored. The notice shall also state procedures to be followed where a medical or safety emergency exists on the premises.

§   -10 Restoration of services or coverage. The service provider shall restore service or coverage within twenty-four hours of cure of the cause of the termination or cancellation. The service provider may charge the customer a fee for the restoration of service or coverage as prescribed by the appropriate regulatory body.

§   -11 Dispute resolution. For each dispute between a customer and a service provider, the first attempt at resolution shall be made directly between the parties. When a service provider concludes that a bona-fide question exists regarding the accuracy of an amount billed, the service provider may adjust the amount due, and shall reflect the adjustment on the next subsequent bill. When a dispute cannot be resolved between the parties, the service provider shall refer the customer to the appropriate regulatory body for resolution."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________