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NJ offers no-solicit bill

A bill that aims to create a credit card “do-not-solicit” list for senior citizens and other vulnerable consumers is advancing in New Jersey.

It was sponsored by four Democratic Assembly members and now has 38 more co-sponsors, though there is no sponsor in the state Senate. Hawaii, Illinois, Missouri and New York also introduced do-not-mail legislation this year.

“We decided to introduce the bill because there were several constituents who had similar situations where their mentally ill children filled out credit card forms, sent them in and, in one case, racked up $10,000 worth of debt,” said Assemblyman Reed Gusciora, a sponsor. “There also was a similar issue with an older person. A lot of people just don’t understand the concept of how credit cards work.”

The bill was introduced in January and has been reported out of the Assembly Consumer Affairs and Appropriations committees. It is before the full Assembly and could be voted on as soon as Dec. 11, the assemblyman said.

“Everyone thinks the bill is a good idea,” Mr. Gusciora said. “The issue that’s left on the table is how much money it would cost. We are estimating that the entire cost of the project would be $1 million to $4 million, but we are trying to get that down.”

Direct marketers and credit card firms think the bill could devastate the DM industry.

It has a higher likelihood of passing than other no-mail bills, and “it would set a disastrous precedent,” said Gene Del Polito, president of the Association for Postal Commerce. “The fact that this bill targets the elderly and other [disenfranchised] groups is going to have more sex appeal than a bill that simply says, ‘I don’t want junk mail.'”

But Mr. Gusciora said that it shouldn’t have a big effect on credit card firms.

“Credit card companies will still be able to solicit normal credit card requests,” he said. “This just creates a do-not-solicit list similar to the do-not-call list.”

The bill would require New Jersey to establish and maintain a credit card do-not-solicit list containing the submitted names of mentally ill individuals and senior citizens in the state who are not to be solicited for credit cards. Under the bill, credit card companies may not:

• Solicit registered vulnerable consumers or senior citizens by mail, telephone or electronic mail.

• Grant a credit card in the name of the registered consumer.

• Mail to the registered consumer a fully functional credit card.

The bill specifies that no registered vulnerable consumer or senior citizen would be liable for any amount resulting from the use of an unsolicited credit card.

Though the bill specifies that any violation is an unlawful practice under the Consumer Fraud Act, it states that a credit card company could not be held liable if it were operating in compliance with the bill’s requirements and any unsolicited credit card marketing were the result of a bona fide error.

An unlawful practice under the Consumer Fraud Act is punishable by a penalty of up to $10,000 for a first offense and up to $20,000 for subsequent offenses. Also, violations can result in punitive damages.

The Direct Marketing Association opposes the bill as redundant. Jerry Cerasale, DMA senior vice president of government affairs, said the federal Fair and Accurate Credit Transactions Act lets consumers opt out of credit offers.

“Having a separate state law complicates the matter for marketers and consumers and increases costs without adding protection for the consumer,” he said.

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