Guam § 32201 - Deceptive Trade Practices Unlawful.

§ 32201. Deceptive Trade Practices Unlawful.

(a) False, misleading, or deceptive acts or practices,

including, but not limited to those listed in this chapter, are hereby

declared unlawful and are subject to action by the Attorney

General or any person as permitted pursuant to this chapter or

other provisions of Guam law. A violation consisting of any act

prohibited by this title is in itself actionable, and may be the basis

for damages, rescission, or equitable relief. The provisions of this

chapter are to be liberally construed in favor of the consumer,

balanced with substantial justice, and violation of such provisions

may be raised as a claim, defense, crossclaim or counterclaim.

(b) The term false, misleading, or deceptive acts or practices

includes, but is not limited to, the following acts by any person or

merchant, which acts are hereby prohibited and declared illegal

and contrary to public policy if committed by any person or

merchant:

(1) Passing off goods or services as those of another; or

(2) Causing confusion or misunderstanding as to the

source, sponsorship, approval or certification of goods or

services; or

(3) Causing confusion or misunderstanding as to

affiliation, connection, or association with, or certification

by, another; or

(4) Using deceptive representations or designations of

geographic origin in connection with goods or services; or

(5) Representing that goods or services have

sponsorship, approval, characteristics, ingredients, uses,

benefits, or quantities which they do not have or that a person

has a sponsorship, approval, status, affiliation, or connection

which he does not; or

(6) Representing that goods are original or new if the

goods are deteriorated or used:

(A) Motor vehicles shall be considered new or used

based on the definitions of new and used motor vehicles

as defined by the U.S. Federal Trade Commission; or

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(7) In selling or attempting to sell goods or services by

making statements; or representations in violation of §§

40120 or 40121, Title 10, Guam Code Annotated, or false

medical claims or false health claims; or

(8) Representing by statements of fact that consumer

goods or consumer services offered for sale have a grossly

inflated value which the seller knows to be false and which

is not based on the true retail value of the goods or services

or comparables. Merely marking a grossly inflated price on

an item or requesting a grossly inflated price is not by itself

a violation of this subsection; or

(9) Knowingly billing a consumer for goods or services

knowing that the consumer has already paid the amounts

billed; or

(10) Charging or attempting to charge a consumer for

goods or services not provided or not to be provided; or

(11) Charging or attempting to charge a consumer who

has previously contracted to buy goods or services additional

charges, including taxes, not previously agreed to in the

contract as a condition of performance; or

(12) Knowingly representing that an agreement confers

or involves rights, remedies, or obligations which it does not

have or involve, or which are prohibited by law when the

person making the representations knows such

representations to be false; or

(13) Knowingly misrepresenting the authority of a

salesman, representative or agent to negotiate the final terms

of a consumer transaction; or

(14) Disconnecting, turning back, or resetting the

odometer of any motor vehicle so as to reduce the number of

miles indicated on the odometer gauge; or

(15) Selling or offering to sell, either directly or

associated with the sale of goods or services, a right of

participation in a multi-level distributorship. As used herein,

multi-level distributorship means a sales plan for the

distribution of goods or services in which promises of rebate

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or payment are made to individuals, conditioned upon those

individuals recommending or securing additional individuals

to assume positions in the sales operation, and where the

rebate or payment is not exclusively conditioned on or in

relation to proceeds from the retail sales of goods, provided

that nothing herein shall prohibit the sale of a sales or

presentation kit to prospective salespersons for Five Hundred

Dollars ($500) or less; provided, that the kit is sold at not

more than the actual cost to the seller, that no commission is

paid on the sale of the kit, and that a full refund (less any

demonstration products used) is offered to the buyer for thirty

(30) days after the delivery of the kit if the buyer returns the

kit to the seller, whether or not the kit is used; and provided

further that if the kit was purchased on Guam the kit can be

returned to a location in Guam and the refund immediately

collected thereat and if purchased off-island can be returned

to the place of purchase for the refund; or

(16) Representing that work or services have been

performed on, or parts replaced in, goods when the work or

services were not performed or the parts replaced; all

replaced parts must be given to the consumer who may, if he

chooses, return such replaced parts to the repairer for

rebuilding; or

(17) Using the term corporation, incorporated, limited,

or an abbreviation of any of those terms in the name of a

business entity that is not incorporated under the laws of

Guam or other jurisdiction; or

(18) Retaining deposits for goods and services without

actually delivering the goods or services as promised and

after a written demand for immediate performance or refund

has been made by the consumer; or

(19) Accepting a deposit (including money taken for a

reservation) by a developer or merchant from a purchaser of

land, building (including homes) or condominium unit

without first fixing in a written contract a firm dollar price

for the land, building, or condominium, which writing shall

be enforceable against the buyer and the seller. Any such

deposit must be placed in escrow in a interest bearing account

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with a duly licensed title insurance company or bank, with

the interest to the credit of the purchaser. If a deposit is taken

in violation of this subsection for the purchase of land,

building, or condominium, the purchaser may at his option

revoke the transaction with penalty as provided below or at

his request the court may order specific performance of the

contract at a price the same as the court finds the seller paid

to purchase or acquire the land plus one-half (1/2) of any

increase in the fair market value of the land as of the time the

deposit was accepted, plus the actual costs of constructing

any building or condominium unit on the land, exclusive of

administrative costs, sales costs, and administrative

overhead. In the alternative, in the event of a violation of this

subsection, at the sole option of the consumer, the consumer

may revoke the transaction and shall be entitled to a refund

of three (3) times the amount of deposit and all other sums

paid to the seller; or

(20) Knowingly selling or offering to sell goods to any

person which the seller has no right to sell or goods for which

the seller cannot deliver clear title to the person as agreed.

Nothing herein shall prevent the sale of goods which are

subject to liens and encumbrances if revealed in writing to

the buyer at or before the time of sale. Nothing in this chapter

shall excuse compliance with the Bulk Sales Act; or

(21) Knowingly misrepresenting to a purchaser that

goods are immediately available for delivery. Unless a

contract or receipt provides otherwise, goods must be

delivered to the consumer within fourteen (14) days of the

payment therefor; or

(22) Knowingly selling or offering to sell goods or

services which the seller thereof is not licensed to sell or offer

for sale; or

(23) Knowingly selling or offering to sell services which

the seller thereof is not capable of providing; or

(24) Knowingly selling or offering to sell goods which

the seller thereof does not have and cannot reasonably obtain

for delivery to the consumer in a reasonable time; or

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(25) Knowingly making false statements of fact as to the

results of purchasing or using goods or services; or

(26) Threatening economic retaliation or physical

damage to any person or to any person’s property if goods or

services are not purchased; or

(27) Violating any rule or regulation of the U.S. Federal

Trade Commission; or

(28) Violating any rule or regulation of the U.S. Food

and Drug Administration; or

(29) Doing any other act which is prohibited by the laws

of Guam to mislead a consumer to his detriment or to induce

another person to buy or sell goods or services to such

person’s detriment.

(c) The term false, misleading, or deceptive acts or practices

includes, but is not limited to, the following acts committed by

merchants. The following acts are hereby prohibited and declared

illegal and contrary to public policy when done by any merchant:

(1) Knowingly representing that goods or services are of

a particular standard, quality, or grade, or that goods are of a

particular style or mode, if they are of another; or

(2) Disparaging the goods, services, or business of

another by false or grossly misleading representation of facts;

or

(3) Advertising goods or services with intent not to sell

them as advertised; or

(4) ("Bait and switch" prohibited) Advertising goods or

services with intent not to sell them as advertised, but rather

to induce a consumer into purchasing similar but more

expensive goods or services; or

(5) Advertising goods or services with intent not to

supply a reasonably expectable public demand, unless the

advertisements disclose a limitation of quantity; or

(6) Making false or misleading statements of fact

concerning the reasons for, existence of, or amount of price

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reductions; provided, that nothing herein shall prohibit a

"sale", clearance sale, seasonal or holiday sale, or a sale based

on reasons which are not misleading and which do not falsely

imply a distressed or forced sale; or

(7) Inducing consumers into a business establishment by

offering free gifts as an inducement to enter the establishment

and then refusing to give such free gifts as promised; or

(8) Falsely stating that one is selling or liquidating goods

which are distressed, damaged or misrouted when the goods

are not distressed, damaged, or misrouted; or

(9) Failing or refusing to apply against the purchase

price of goods or services a deposit made by the consumer;

or

(10) Advertising any sale by fraudulently representing

that a person is going out of business; or

(11) Basing a charge for the repair of any item in whole

or in part on a guaranty or warranty instead of on the value

of the actual repairs made or work to be performed on the

item without stating separately the charges for the work and

the charge for the warranty or guaranty, if any; or

(12) Inducing a consumer to purchase repair services or

repair parts by knowingly making false or misleading

statements of fact concerning the need for parts, replacement,

or repair service; or

(13) As to comprehensive and collision insurance

insuring the vehicle of an insured on policies written after the

effective date of this chapter, an insurer may not pay a

consumer less than the face amount of an insurance policy

for a covered loss, and the insurer is estopped from denying

that the face amount of the policy, whether an original or

renewal policy, showing the vehicle’s value upon which the

insurance premium was based, is the true value of the vehicle,

unless the insurer can show by a preponderance of the

evidence:

(A) That the vehicle insured was damaged by an

uninsured cause since the policy was written; or

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(B) That the vehicle has accumulated mileage in

excess of sixteen thousand (16,000) miles per year or

part thereof since the vehicle was first registered, and

that the excess mileage situation did not exist when the

policy was written; or

(C) That the insured fraudulently and materially

misrepresented material facts concerning the value of

the property insured (the insured’s statement as to the

estimated of the value of the vehicle is not a

misrepresentation of fact concerning the value of the

vehicle); or

(D) That because of multiple insurance policies, a

co-insurance situation exists.

An insurer may include in a policy of insurance a

schedule showing the depreciated value of the vehicle at

various times during the life of the policy, but in such case,

the premium shall be based upon the average daily value of

the vehicle over the life of the policy. In such case, for

purposes of this subsection, the face amount of the policy

indicating the vehicle’s value shall be considered to be the

value of the vehicle as shown in the depreciation schedule on

the date of loss.

(14) Including a co-insurance clause in any policy of

casualty or liability insurance which would limit the liability

of the insurance carrier based upon a theory of self-insurance

by the insured. Co-insurance shall apply only when there is

overlapping insurance by two (2) or more policies. In any

case of dual insurance coverage, the policy limits of

insurance shall be the total limits of all policies, with

payment of claims pro-rated among the various policies. The

provisions of this subsection do not apply to insurance for

typhoons or earthquakes; provided, that in such cases a seller

of insurance shall provide in a separate writing to the insured

who purchases a policy of typhoon or earthquake insurance

subject to a co-insurance clause an explanation of co-

insurance, with the insured to sign an acknowledgement of

having read the explanation. Nothing in this subsection shall

prohibit the use in casualty or liability insurance policies of

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"deductible" clauses whereby specific sums are deducted

from the losses before payment by the insurer.

(15) Representing that a guarantee or warranty confers

or involves rights or remedies which it does not have or

involve; provided, however, that nothing in this chapter shall

be construed to expand the implied warranty of

merchantability as defined in §§ 2314 through 2318, Title 13,

Guam Code Annotated, to include obligations in excess of

those which are appropriate to the goods; or

(16) Representing that parts have been replaced in goods

with new parts in making repairs for a consumer when in fact

used parts were used for replacement. When used parts are

used in repairs, the exact description of used parts to be used

shall be revealed in a writing signed and approved by the

consumer prior to commencing repairs or prior to installing

or selling such parts. The description of the used parts

revealed prior to use and also on the final billing may not be

a printed part of any pre-printed contract, but shall be hand

written, typed, or computer printed in at least 10 point type.

A consumer need not pay for any goods or services used for

any repair job in which used parts are used in violation of this

subsection, and is entitled to a refund of any amounts already

paid therefor. This subsection does not apply to used parts for

which the consumer is not charged, nor does it apply to used

parts having a total value of Five Dollars ($5) or less and

which are essentially the same as new parts. A merchant

hired by a consumer to repair an appliance or vehicle must

give the consumer in advance of repair a written estimate of

the cost of such repair, and must notify the consumer in

writing when the repairs will cost more than the estimate;

after receipt of which notice the consumer shall have twenty-

four (24) hours to decide whether to pay the additional

charges, failing which agreement the repairer shall undertake

no additional repairs and shall return the item to the

consumer, charging only for the work performed, and in no

case more than the estimate.

(17) Failing to disclose information concerning goods or

services which was known at the time of the transaction if

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such failure to disclose such information was intended to

induce the consumer into a transaction into which the

consumer would not have entered had the information been

disclosed. A merchant of vehicles shall reveal to a consumer

in writing prior to sale all previous damage to a vehicle and

known to the merchant and all repair work done on a vehicle

by the merchant or at the merchant’s instruction prior to

signing a contract of sale or selling a vehicle, and revealing

any used parts which were used in the repairs; or

(18) Charging consumers different prices for the same

goods or services on account of the race, ethnic origin, color,

creed, sex, sexual preference, handicap or age of the

consumers; provided however, that nothing in this subsection

shall prevent a merchant from giving discounts to local

residents.

(19) Violating subparagraphs (f) (marking of outdated

food, etc), (g) (damaged consumer products), (h) (marking of

water-added products), (i) (sale of cans of rusty food), or (j)

all of § 40120, Title 10, Guam Code Annotated;

(20) Violating Regulation Z of the United States Federal

Reserve Board in the financing of the sale of goods or

services; or

(21) Price gouging in time of disaster prohibited.

(A) It shall be an unfair trade practice for any

merchant or landlord to increase the price of any goods,

services, or dwelling rentals on the basis of shortage

anticipated or caused by any disaster. A merchant may

add to the normal sales price of goods normally

imported by sea incremental freight costs caused as a

result of air freight actually incurred, and may pass on

to customers actual overtime labor costs for services in

addition to regular charges.

(B) After a disaster in which there is serious damage

to five hundred (500) or more of the permanent

residential units on the island caused by the disaster,

after a typhoon bringing sustained winds to Guam of

100 miles per hour or more, or after an earthquake that

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affects Guam with a reading on Guam greater than 7.0

on the Richter Scale, the Governor may, by executive

order, freeze residential rents to levels in effect the day

before the disaster, for up to 120 days from the date of

the disaster, which freeze may not be thereafter

extended.

(C) If Condition of Readiness 1, 2 or 3, or an

equivalent condition is declared, or if I Maga'hågan or

Maga'låhen Guåhan declares that a state of emergency

exists requiring emergency assistance, or after a disaster

which damages two hundred (200) or more of the

permanent residential units on the island, or after a

typhoon brings sustained winds to Guam of one hundred

(100) miles per hour or more, or after an earthquake with

a reading on Guam greater than 7.0 on the Richter Scale,

I Magaʹhåga or Maga'låhi may, by Executive Order,

freeze mark-ups and prices on designated goods and

services which he or she finds to be in short supply or in

danger of being in short supply as a result of the disaster

to markups and prices in effect the day before the

disaster, for up to thirty (30) days after the disaster. Said

freeze shall not be extended. A merchant may add to the

normal sales prices of the goods the increased import

cost of the goods, for all goods normally imported by

sea, and incremental freight costs caused as a result of

air freight actually incurred.

(D) Merchants and landlords violating this

subsection (21) shall be subject to the same damages,

penal ties and other liabilities provided in this chapter

and for damages equal to three (3) times the amounts of

all gross profits on overcharged goods or five (5) times

the amount of overcharges for services or rentals, in

addition to all other damages and remedies allowed by

law or equity, and may be temporarily and permanently

restrained and enjoined from further violation without

the applicant therefor being required to post bond.

(E) The price on all wholesale and retail goods shall

be frozen whenever I Maga’lahen Guåhan declares

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Guam to be in Condition of Readiness 1 or 2, or their

equivalent, and shall continue to be frozen until seventy-

two (72) hours after Guam returns to Condition of

Readiness 4, or its equivalent. The normal sales prices

of goods shall include the increased import costs of the

goods for all goods normally imported by sea, and

incremental freight costs caused as a result of air freight

actually incurred.