STAND. COM. REP. NO. 1096

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 1073
                                        H.D. 1
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred H.B. No. 1073, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO TELEMARKETING FRAUD,"

begs leave to report as follows:

     The purpose of this measure is to prevent telemarketing
fraud in this State by prohibiting certain telemarketing
practices as unfair deceptive acts or abusive telemarketing
acts, and requiring telephone solicitors to keep records of their
telemarketing activities.

     The Department of Commerce and Consumer Affairs, the
Executive Office on Aging, the Department of the Prosecuting
Attorney of the City and County of Honolulu, the Honolulu Police
Department, the Policy Advisory Board for Elder Affairs, State
Farm Insurance Companies, and Legislative Information Services of
Hawaii presented testimony in support of the measure.  GTE
Hawaiian Tel, the Office of the Public Defender, and the Hawaii
Financial Services Association presented comments on the measure. 

     Your Committee finds that telemarketing fraud is an
insidious crime that often aggressively preys on the elderly.
Telemarketers commonly employ abusive, misleading, or high
pressure tactics in order to manipulate their victims into paying
for worthless or non-existent goods or services.  This measure,
in conjunction with federal law, will aid in deterring further
acts of telemarketing abuse.  

 
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     Your Committee has amended this measure by replacing its
contents with the contents of a similar measure, S.B. No. 947,
S.D. 1, without the criminal penalty provisions and including
additional amendments.  As amended, this measure:

     (1)  Includes a prize promotion or investment opportunity
          within the definition of "telemarketing";

     (2)  Prohibits a seller or telephone solicitor making a
          telephone solicitation call from allowing the telephone
          to ring more than five times;

     (3)  Establishes conditions under which the initiation of an
          outbound telephone solicitation to a person who has
          previously stated that the person does not wish to
          receive solicitation calls is not considered to be an
          abusive telemarketing act; 

     (4)  Prohibits telephone solicitations to a person's
          residence at times other than between 8:00 a.m. and
          9:00 p.m., Hawaii time;

     (5)  Requires telephone solicitors to maintain records of
          persons who do not wish to receive telephone
          solicitations;

     (6)  Provides that certain persons or entities are exempt
          from all of the requirements of the new chapter, rather
          than from only the recordkeeping requirements;
 
     (7)  Expands the definition of financial institutions exempt
          from the chapter to include nondepository financial
          services loan companies and affiliates or subsidiaries
          of financial institutions; and

     (8)  Contains technical, nonsubstantive differences. 

     Although this measure does not amend the provision relating
to the exemption for insurance companies licensed or authorized
to conduct business in this State, it is your Committee's intent
that the exemption for insurance companies applies also to the
agents and employees of insurance companies. 

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 1073, H.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached

 
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hereto as H.B. No. 1073, H.D. 1, S.D. 1, and be referred to the
Committee on Judiciary.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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