47-18-507 - Required disclosures Unfair or deceptive trade practices. - Tennessee Statutes

47-18-507. Required disclosures Unfair or deceptive trade practices.

(a)  It is unlawful for any buying club to fail to disclose to a prospective member in writing, prior to the sale of any contract for discount buying services:

     (1)  That goods or services can only be bought through catalogs with no opportunity to inspect samples if such is the case;

     (2)  The buyers club's policies regarding warranties or guarantees on goods ordered, return of ordered goods by buyers, procedures for cancellation of merchandise orders by the buyer, and refunds of deposits for the cancellation of orders;

     (3)  Any charges, such as estimated freight costs, handling fees, credit life or disability insurance, suppliers' and buyers clubs' markup, and other costs incidental to the purchase of goods through the buyers club and which are to be paid by the buyer;

     (4)  A list of the categories of merchandise which are available to buyers from cooperating suppliers. If the list includes savings claims based on reference prices, the reference prices must be those at which the same or comparable goods are offered or sold in the trade area;

     (5)  Advice that the contract for discount buying service or incidental retail installments contracts will be transferred, sold, or assigned to a third party if such practice is to be used by the buyers club; and

     (6)  The percentage of the purchase price required as a down payment on merchandise orders of any nature. This prohibition applies in all cases where rebates are offered, regardless of whether such promised rebates are contingent upon the seller's ability to enroll the referred persons into the buyers club.

(b)  It is an unfair or deceptive trade practice for a buying club to:

     (1)  Represent that it is affiliated with any other buyers club organization or showroom, unless an affiliation in fact exists and unless the prospective buyer would be legally entitled to services from the allegedly affiliated organization as a result of being a buyer of the subject buyers club. If such an affiliation is claimed by the representative of the buyers club, written proof of such a binding legal right must be given the prospective buyer, including a description of the services available from the affiliated club, before the signing of any contract for discount buying services or application;

     (2)  Represent that the prospective buyer will be entitled to a particular benefit unless that benefit is currently available from the buyers club on a regular basis;

     (3)  Offer any gifts or consideration of any nature to a prospective buyer as a solicitation for such person to attend a buyers club sales presentation or to sign a membership application or a contract for discount buying services where the club fails to honor or deliver the gift or consideration in accordance with the terms of its promise;

     (4)  Represent or suggest in any manner that it offers its buyers the lowest prices, excluding freight and service charges, available on all categories of merchandise handled by the club, unless such is true; or

     (5)  Represent that merchandise is available to the buyer from any particular supplier unless such is true at the time the representation is made. Reference to unavailable suppliers or manufacturers may be made only for purposes of allowing prospective buyers to compare merchandise costs against those manufacturers which are available through the club. No buyers club may represent to a prospective buyer, unless it is true, that the club can purchase any item of merchandise at supplier's cost if the buyer provides the club with the necessary model number for the item.

[Acts 1986, ch. 863, § 1.]