2015 Delaware Code
Title 6 - Commerce and Trade
CHAPTER 25A. TELEMARKETING REGISTRATION AND FRAUD PREVENTION
§ 2504A Record-keeping requirements.

(a) Any seller or telemarketing business shall preserve its individual records for a period of 24 months from the date the records are produced. A record, to the extent the seller or telemarketing business, or both, created it in the ordinary course of business, shall be kept in the form, manner, format or place as such record is maintained in the ordinary course of business. Records to be preserved shall include, but not be limited to:

(1) All substantially different advertising, brochures, telemarketing scripts and promotional materials;

(2) The name and last known address of each prize recipient and the description of the prize awarded for prizes represented to have a value of $25 or more;

(3) The name and last known address of each prize recipient and the description of the prize awarded for any prize in connection with a consumer call to a 900 number and any prize promotion when the consumer is told that the consumer will definitely win 1 of several prizes and any of the prizes is represented to have a value of $25 or more;

(4) The name and last known address of each customer, the merchandise purchased, the date such merchandise was ordered and shipped or provided, the amount of merchandise ordered and shipped or provided, and the amount paid by the customer;

(5) The name, any fictitious name used, the last known home address and telephone number, and the job title for each current and former employee directly involved in the telemarketing activities; and

(6) All written or recorded authorizations required to be provided or received under this chapter, including, but not limited to, any express verifiable authorization as defined in § 2507A of this title.

(b) The seller and any telemarketing business calling on behalf of the seller may, by written agreement, allocate responsibility between themselves for the record-keeping required by this chapter. When a seller and a telemarketing business have entered into such an agreement, the written terms of that agreement shall determine and govern each party's respective obligations under this chapter. If no agreement exists, or such written agreement is unclear as to which party must create and maintain a record, the seller shall be deemed the responsible party under this chapter.

(c) In the event of any dissolution or termination of the operations of any business employing telemarketers or the telemarketing business, the principal owners or directors of the entity shall maintain all records as required under this chapter. In the event of any sale, assignment or other change in ownership of the seller or telemarketing business, the buyer or successor shall maintain all records required under this chapter.

72 Del. Laws, c. 262, § 1.;

§ 2505A Exempt practices.

This chapter shall not apply to the following business practices by a seller, telemarketer or a telemarketing business except as otherwise provided in this section:

(1) Solicitations in which the sale of merchandise is not completed and payment or authorization for payment is not required until after a face-to-face sales presentation to the customer by the telemarketer, seller, or telemarketing business or its representatives.

(2) Communications by telephone or other forms of media initiated by a customer that are not the result of any solicitation by the telemarketer, seller or telemarketing business.

(3) Solicitations, telemarketing or the use of telephone equipment in connection with any sale of goods or services by a business supplier to a business or between businesses.

(4) Use of telephones or telemarketing by or on behalf of a charitable/fraternal organization in connection with charitable/fraternal solicitations as those terms are defined in § 2593 of this title; provided, however, that a corporation claiming exemption pursuant to § 2593(1)c. of this title must also satisfy the requirements of § 2503A(e) of this title.

(5) Use of telephones or telemarketing for fundraising and other noncommercial purposes by religious, charitable, political, educational, labor and social organizations or entities not otherwise regulated by §§ 2591 through 2597 of this title.

(6) Use of telephones or telemarketing by or on behalf of a licensed insurance broker, agent, customer representative or solicitor when making solicitations is within the scope of the person's license. For this purpose, a "licensed'' person is one who or that is authorized by the Insurance Commissioner to conduct business within the State pursuant to Title 18.

(7) Use of telephones or telemarketing by or on behalf of a person lawfully registered with the Delaware Securities Commissioner pursuant to § 73-301 of this title and acting within the scope of the person's registration as a broker-dealer, investment advisor or agent.

(8) Use of telephones or telemarketing by or on behalf of a supervised financial institution or parent, subsidiary or affiliate thereof. For purposes of this exemption, "supervised financial institution'' shall mean any bank, trust company, savings bank, credit card institution, building and loan association, building and industrial development corporation, licensed mortgage loan broker, licensed lender, licensed check seller or money transmitter, licensed cashier of checks, licensed motor vehicle sales finance company, licensed transporter of money and valuables, licensed preneed burial contractor, credit union, industrial loan company, or other institution engaged in a business similar to any of the foregoing; provided, however, that such institution is subject to supervision and regulation by the Delaware State Banking Commission or any official or agency of any state or of the United States. For purposes of this exemption, "subsidiary'' and "affiliate'' shall have the meanings specified in § 101 of Title 5.

(9) Soliciting sales through the distribution of a catalog which:

a. Contains a written description, picture or illustration and price of each item of merchandise offered for sale;

b. Includes the business address of the company;

c. Is distributed in more than 1 state;

d. Includes at least 10 pages of written material or illustration;

e. Is issued not less frequently than once a year;

f. Has an annual circulation of not less than 100,000 consumers; and

g. The company's use of telephones is solely for the receipt of calls initiated by customers in response to the catalog and during those calls the person representing the company takes orders for merchandise only without further solicitation. For this purpose, "further solicitation'' does not include providing the customer with information about or attempting to sell any other item included in the same catalog that prompted the customer's call or in a substantially similar catalog.

(10) The sale of goods or services for which the terms and conditions of offering or sale are subject to regulations by the Public Service Commission or the Federal Communications Commission, such sales being governed by the provisions of applicable rate sheets, tariffs or rules of those Commissions.

72 Del. Laws, c. 262, § 1; 78 Del. Laws, c. 175, § 98.;

§ 2506A Disclosure and contract requirements.

(a) A telemarketer shall provide all of the following information when contacting a consumer:

(1) At the beginning of the call and prior to any sales pitch, the telemarketer shall disclose to the customer:

a. That the purpose of the telephone call is to sell specific merchandise;

b. The telemarketer's name and the name of the seller on whose behalf the solicitation is being made; and

c. Accurate information concerning the nature and description of the merchandise being offered for sale.

(2) Before completion of the initial sales call and before payment is requested the telemarketer shall disclose to the customer:

a. The total amount of money to be paid by the customer for the merchandise that is the subject of the telemarketing sales call;

b. Any restrictions, limitations or conditions applicable to the purchase of the merchandise that is the subject of the telemarketing sales call;

c. Any material aspect of the performance, quality, efficacy, nature or basic characteristics of the merchandise that is the subject of the telemarketing sales call;

d. Any material aspect of the nature or terms of the refund, cancellation, exchange or repurchase policies;

e. Any material aspect of any investment being offered, including benefits, the price of the investment, the location of the investment, and the reasonable likelihood of success of the investment opportunity;

f. Any material element of a prize promotion, including:

1. An accurate description of the prize;

2. Its market value;

3. All material conditions to receive or redeem the prize;

4. The actual number of prizes to be awarded;

5. The odds of being able to receive the prize, and if the odds are not calculable in advance, the factors and methods used in calculating the odds;

6. The fact that no purchase or payment of any kind is required to win a prize or to participate in a prize promotion; and

7. Instructions on how to participate or an address or local or toll-free telephone number to which customers may write or call for information on how to participate in the prize promotion.

(b) The following requirements shall apply to each sale of merchandise by a telemarketer:

(1) The telemarketer's sales transaction shall only be considered final 7 business days after the customer has received a written notice as required by this subsection.

(2) The telemarketer shall furnish the customer, in the same language as that principally used in the sales presentation, said written notice, which shall contain in not less than 12-point boldface type, a statement in substantially the following form:

"You, the purchaser, may cancel this transaction without any penalty or obligation at any time prior to midnight of the seventh business day after receipt of this notice. If you cancel, any payments made by you under the sale will be returned within 10 business days following receipt by the seller of your written notice of cancellation and any security interest arising out of the transaction will be canceled.

If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any merchandise delivered to you under this contract of sale; or you may, if you wish, comply with the instructions of the seller regarding the return shipment of the goods at the seller's expense and risk.

If you do make the merchandise available to the seller and the seller does not pick the merchandise up within 20 days of the date of your notice of cancellation, or agree to pay the expense for its return, you may retain or dispose of the merchandise without any further obligation. If you fail to make the merchandise available to the seller, or if you agree to return the merchandise to the seller and fail to do so, then you remain liable for performance of all obligations under the contract.

To cancel this transaction, mail or deliver a written notice of cancellation or send a telegram to (name of seller) at the following address (address of seller). The effective time of any cancellation is deemed to be the postmarked date upon which the notice was mailed to the seller, the date upon which the notice was delivered to any commercial document or parcel service for delivery to the seller or the date upon which any telegram was sent to the seller.''

(3) The telemarketer or telemarketing business shall notify the customer of the seller's name, address and phone number and the name, address and phone number of the person to whom any notice of cancellation is to be given if different from the seller. The seller is additionally required to furnish the customer with the date of the telephone solicitation and a description of the telephone solicitation.

(c) Exempt from the requirements of subsection (b) of this section is any sale in which the consumer is given a full refund for the return of undamaged and unused goods, or the merchant guarantees full satisfaction or a cancellation of services notice, when the consumer has at least 7 days to review goods or services after receipt of the goods or services by the consumer, and the seller shall process the refund within 30 days after receipt of returned merchandise or cancellation of services by the consumer. The seller must disclose the review, return and refund policy to the buyer orally by telephone or in writing with advertising or promotional material or with delivery of goods or services. A seller must disclose a return address in writing where the consumer may return goods or cancel services. A seller who discloses in writing that a sale provides "satisfaction guaranteed'' or "free inspection'' or "no risk guarantee,'' or similar words or phrases, shall be deemed to meet the requirements of the review and refund policy.''

(d) It is a violation of this chapter and of § 2513 of this title for any seller, telemarketer or telemarketing business to engage in any unfair or deceptive conduct that would create a likelihood of confusion or misunderstanding to any reasonable consumer in connection with this section.

(e) It is a violation of this chapter and of § 2532 of this title for any seller, telemarketer or telemarketing business to engage in any unfair or deceptive conduct that would create a likelihood of confusion or misunderstanding to any reasonable consumer in connection with this section.

72 Del. Laws, c. 262, § 1.;

§ 2507A Prohibited acts and practices.

(a) It is a prohibited telemarketing act or practice and a violation of this chapter and § 2513 of this title for any person to:

(1) Obtain or submit for payment a check, draft or other form of negotiable paper drawn on a person's checking, savings, share or similar account without that person's express verifiable authorization. For this purpose, "express verifiable authorization'' means:

a. A written statement signed by the customer expressly authorizing the payment;

b. The customer's signature on the negotiable instrument;

c. An oral authorization by the customer that is tape-recorded and made available upon request to the customer's bank and that evidences both the customer's authorization of a payment for the specific merchandise sold and the customer's receipt of the following information:

1. The date of the draft;

2. The amount of the draft;

3. The payor's name;

4. The number of draft payments, if more than 1;

5. A telephone number for customer inquiry that is answered during normal business hours; and

6. The date of the customer's oral authorization; or

d. Written confirmation of the transaction sent to the customer prior to submission for payment of the customer's check, draft or other form of negotiable paper that includes all of the information required to be given under any oral tape-recorded authorization described in this section;

e. Any otherwise valid "express verifiable authorization'' shall be deemed invalid if said authorization was induced by fraud, false pretenses, misrepresentation, false promises or failure to disclose material information;

(2) Advertise or represent that registration as a telemarketer equals an endorsement or approval by any government or governmental agency of any state;

(3) Wilfully call or contact any customer by telephone for any purpose connected with or related to the sale or advertising of merchandise for 10 years after having been directed, orally or in writing, by the customer or any person acting on behalf of the customer with said customer's authorization, to cease and desist from said calls or contacts. For purpose of this section, a call or contact is "wilful'' if the person making or initiating the call or contact knows or should know of the customer's instruction to not call or contact;

(4) Assist, support or provide substantial assistance to any seller, telemarketer or telemarketing business when the person knew or should have known that the seller, telemarketer or telemarketing business was engaged in any act or practice in violation of this chapter;

(5) Request or receive payment in advance from a person to recover or otherwise aid in the return of money or any other item lost by the customer in a prior telemarketing transaction; or

(6) Use the services of any professional delivery, courier or other pickup service to obtain receipt or possession of a customer's payment, unless the merchandise is delivered with the opportunity to inspect it before any payment is collected.

(b) Nothing in this chapter shall prevent the Attorney General from seeking any other civil remedy or criminal sanction for any violation of this chapter as otherwise provided by law. Any person who violates § 1401 or § 1402 of Title 11 in connection with telemarketing shall, in addition, be guilty of a class F felony.

72 Del. Laws, c. 262, § 1.;

§ 2508A Customers' remedies.

(a) The sale of any merchandise by an unregistered, nonexempt seller or an unregistered, nonexempt telemarketing business shall be voidable.

(b) Any customer who suffers a loss or harm as a result of a violation or prohibited act or practice under this chapter, in addition to any other rights of action allowed by law, may recover actual and punitive damages, attorney's fees, court costs and any other remedies provided by law, including equitable relief.

72 Del. Laws, c. 262, § 1.;

§ 2509A Enforcement.

All enforcement actions under this chapter by the Attorney General shall be undertaken in accordance with Chapter 25 of Title 29.

72 Del. Laws, c. 262, § 1.;