STATE STATUTES & CODES
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NORTH CAROLINA STATUTES AND CODES
§ 66-135. Bond and trust account required.
§66‑135. Bond and trust account required.
(a) Every discountbuying club shall obtain and maintain a bond from a surety company licensed todo business in North Carolina. Such bond shall be in an amount not less thanone hundred times the one‑time or annual membership fee, or fiftythousand dollars ($50,000), whichever is greater.
(b) Every discountbuying club shall hold advance payments for goods and services in trust in aseparate account used solely for that purpose. The funds in such account shallbe held free from all liens. Records of such account shall be kept by thebuying club in the regular course of its business sufficient to identify theamount held for each customer, the dates of the receipt and withdrawal offunds, and the purpose of withdrawal. Such records must be retained for aperiod not less than four years following withdrawal. Funds may not bewithdrawn from the trust account unless and until (i) the ordered goods havebeen actually delivered to the customer or consigned to a certified publiccarrier, or (ii) ordered services have been provided in full, or (iii) thebuying club has refunded the customer's payment. Provided, the discount buyingclub shall not be required to comply with the foregoing trust accountrequirements if the discount buying club meets the requirements of G.S. 66‑132(b),bills its customers through a credit card account and obtains and maintains anadditional bond in the amount of fifty thousand dollars ($50,000) from a suretycompany licensed to do business in North Carolina.
(c) Any person who isdamaged by any violation of this Article, or by any breach by the discountbuying club of its contract, may bring an action against the bond, providedthat the aggregate liability of the surety shall not exceed the amount of thebond.
(d) Violations ofsubsections (a) or (b) of this section shall constitute a Class I felony. (1981,c. 594, s. 1; 1989, c. 495, ss. 2, 3; 1993, c. 539, s. 1282; 1994, Ex. Sess.,c. 24, s. 14(c).)