Minnesota Session Laws - 2005, Regular Session

                            CHAPTER 70-H.F.No. 1583 
                  An act relating to consumer protection; regulating 
                  membership travel contracts; amending Minnesota 
                  Statutes 2004, sections 325G.50; 325G.505, subdivision 
                  3; 325G.51; proposing coding for new law in Minnesota 
                  Statutes, chapter 325G. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2004, section 325G.50, is 
        amended to read: 
           325G.50 [MEMBERSHIP TRAVEL CONTRACTS; CANCELLATION.] 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section and section sections 325G.501 and 325G.505, the 
        following terms have the meanings given them: 
           (a) (1) "Membership travel contract" or "contract" means an 
        agreement offered or sold in this state evidencing a buyer's 
        right to make travel arrangements from or through a membership 
        travel operator and includes a membership that provides for this 
        use. 
           (b) (2) "Membership travel operator" means a person 
        offering or selling membership travel contracts paid for by a 
        fee or periodic payments. 
           (c) (3) "Travel arrangements" means travel reservations or 
        accommodations, tickets for domestic or foreign travel by air, 
        rail, ship, bus, or other medium of transportation, or hotel or 
        other lodging accommodations for members. 
           (4) "Date of consummation of service" means the date on 
        which the buyer of the contract is provided with all materials 
        necessary to allow the buyer to make travel arrangements that 
        are the subject of the contract and is provided all materials 
        explaining the buyer's rights, obligations, benefits, and 
        restrictions under the membership travel contract. 
           (5) "Gift" means a prize, award, rebate, bonus, coupon, 
        credit, voucher, or other item of value offered or provided to a 
        consumer as part of the solicitation to purchase a membership 
        travel contract. 
           (b) The definitions in paragraph (a) do not apply to the 
        offer, sale, exchange, or other use of a timeshare interest, as 
        defined in section 83.20, subdivision 13. 
           Subd. 2.  [BUYER'S RIGHT TO CANCEL.] In addition to other 
        rights the buyer may have, the buyer may cancel a membership 
        travel contract until midnight of the tenth business day after 
        the day on which the contract was signed by the buyer date of 
        consummation of service for the contract. 
           To be effective, a notice of cancellation must be given by 
        the buyer in writing to the membership travel operator at the 
        operator's address.  This address must be included in the 
        membership travel contract.  The notice, if given by mail, is 
        effective upon deposit in a mailbox, properly addressed to the 
        operator and postage prepaid.  The notice is sufficient if it 
        shows, by any form of written expression, the buyer's intention 
        not to be bound by the membership travel contract. 
           Cancellation is without liability on the part of the buyer 
        and the buyer is entitled to a refund, within ten days after 
        notice of cancellation is given, of the entire consideration 
        paid for the contract.  Rights of cancellation may not be waived 
        or otherwise surrendered. 
           Subd. 3.  [WRITTEN NOTICE TO MEMBERS.] A copy of the 
        contract must be delivered to the buyer at the time the contract 
        is signed.  The contract must be in writing, must be signed by 
        the buyer, must designate the date on which the buyer signed the 
        contract, and must state, clearly and conspicuously, in boldface 
        type of a minimum size of 14 points immediately adjacent to the 
        buyer's signature, the following: 
                           "MEMBERS' RIGHT TO CANCEL 
           If you wish to cancel this contract, you may cancel by 
        delivering or mailing a written notice to the membership travel 
        operator.  The notice must say that you do not wish to be bound 
        by the contract and must be delivered or mailed before midnight 
        of the tenth business day after you sign this contract.  The 
        notice must be delivered or mailed to:  (Insert name and mailing 
        address of membership travel operator).  If you cancel, the 
        membership travel operator will return, within ten days of the 
        date on which you give notice of cancellation, any payments you 
        have made.  Your right to cancel continues until midnight of the 
        tenth business day after the day on which you are provided with 
        all materials necessary to allow you to make travel arrangements 
        and all materials that explain your rights, obligations, 
        benefits, and restrictions under the contract." 
           Subd. 3a.  [ORAL NOTICE TO MEMBERS.] At the time the 
        contract is signed by the buyer, the membership travel operator 
        shall orally inform the buyer of the buyer's right to cancel the 
        contract within ten business days of the contract signing 
        described in subdivision 2. 
           Subd. 4.  [CANCELLATION AT ANY TIME.] (a) A contract which 
        does not contain the notice specified in subdivision 3 may be 
        canceled by the buyer at any time by giving notice of 
        cancellation by any means. 
           (b) If the oral notice required by subdivision 3a has not 
        been given to the buyer at the time the contract was signed, the 
        buyer may cancel the contract at any time by giving notice of 
        cancellation by any means. 
           (c) If the buyer has a continuing right to cancel under 
        this subdivision, the membership travel operator, or any 
        affiliate or successor to the membership travel operator, shall 
        not solicit the buyer to enter into a new contract, unless 
        before the solicitation, the membership travel operator provides 
        the following: 
           (1) at the same time as the initial written solicitation to 
        enter a new contract, a written notice on a separate sheet of 
        paper that in boldface type of a minimum size of 14 points 
        states the following: 
                               "RIGHT TO CANCEL 
           You have the right to cancel the contract that you 
        previously entered with (name of membership travel operator).  
        If you cancel the contract with (name of membership travel 
        operator), you have the right to receive a refund of all money 
        paid for the contract.  You also will not be required to make 
        any further payments under that contract. 
           This is an attempt to solicit you to enter a new contract. 
           If you would like more information concerning Minnesota 
        laws governing membership travel contracts, please contact the 
        Minnesota Attorney General's Office at (the Minnesota Attorney 
        General's Office address and telephone number)."; and 
           (2) at the same time as the initial oral solicitation to 
        enter a new contract, an oral notice that clearly reiterates the 
        statement contained in clause (1). 
           The attorney general shall provide a number for insertion 
        into this notice on request of the membership travel operator. 
           Sec. 2.  [325G.501] [MEMBERSHIP TRAVEL CONTRACTS 
        SOLICITATION GIFT OFFERS.] 
           (a) No membership travel operator shall offer a gift, 
        either directly or indirectly, to a person in Minnesota unless 
        the membership travel operator clearly discloses the following 
        information at the same time and in the same manner and 
        prominence as the offer of the gift: 
           (1) the true name or names of the travel club operator and 
        the address of the travel club operator's principal place of 
        business; 
           (2) the estimated retail value of the gift, which must not 
        be more than twice the direct cost to the membership travel 
        operator for the gift; 
           (3) any requirement that the person receiving the notice 
        pay taxes, refundable or nonrefundable deposits, or any other 
        charges to obtain or use a gift, including the nature and amount 
        of the charges; 
           (4) if receipt of the gift is subject to a requirement that 
        the person attend a meeting with the travel club operator for 
        the purpose of soliciting the person to enter into a membership 
        travel contract, a statement that the requirement applies, a 
        description of the membership travel contract the membership 
        travel operator wishes to sell, the approximate length of the 
        meeting, and the requested price for the membership travel 
        contract; 
           (5) any limitations on eligibility to receive the gift; and 
           (6) if use of the gift is subject to any restrictions, 
        including, but not limited to, travel restrictions, a statement 
        that a restriction applies, and a detailed description of the 
        restriction. 
           Sec. 3.  Minnesota Statutes 2004, section 325G.505, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ORAL DISCLOSURES.] A membership travel operator 
        shall orally disclose to any prospective purchaser, before a 
        membership travel contract is executed by the prospective 
        purchaser, the information in the public offering statement as 
        required in subdivision 2, clauses (1), (2), and (3), and 
        whether the membership travel operator uses a third-party travel 
        agent or membership travel operator to make travel arrangements 
        provided for in the contract. 
           Sec. 4.  Minnesota Statutes 2004, section 325G.51, is 
        amended to read: 
           325G.51 [PENALTIES; REMEDIES.] 
           A person who violates section sections 325G.50 or to 
        325G.505 is subject to the penalties and remedies provided in 
        section 8.31.  The relief provided in this subdivision is in 
        addition to remedies or penalties otherwise provided by law. 
           Presented to the governor May 19, 2005 
           Signed by the governor May 23, 2005, 11:15 a.m.