Testimony of Erin Trabucco, General Counsel
Before the Joint Committee on Financial Services
May 6, 2009

 
RE: H.987, An Act Relative to Home Service Contracts
            

The Retailers Association of Massachusetts (RAM), established in 1910, is a statewide trade association of over 3,000 retail and restaurant member companies.  Our membership ranges from independent “mom and pop” retailers to larger national retail chains.  The retail industry's contributions to the Commonwealth include over $100 billion in annual sales; $4 billion in annual sales and use taxes; 18% of Massachusetts jobs; and operations in over 40,000 locations across the state.

On behalf of the Retailers Association of Massachusetts, I respectfully ask the Committee to support H.987. 

This legislation promotes fairness and equality within the service contract industry and provides protection for consumers.  Many states have enacted laws governing service contracts.  The home service industry in those states benefit from fair competition and uniformity.  Consumers also benefit from trade practice limitation and contract disclosure.  H.987 seeks to bring those needed benefits to companies and consumers in the Commonwealth. 

H.987 is based on the National Association of Insurance Commissioner's Service Contract Model Act of 1996.  This model is the result of several years of work with both industry and consumer participation.  The majority of states with home service contract laws have enacted this or a similar model.  The requirements outlined in H.987 include; disclosure of the parties and exactly what is being provided to the consumer, reasonable assurance that the consumer is dealing with a financially secure provider, requirement that terms and conditions be provided to the consumer, prohibition of false or misleading sales practices and enforcement mechanisms for violations of the law, record-keeping requirements for the provider and inspection rights of such records by the regulator, protection for businesses against unnecessary burdens and administrative costs.

Uniformity of home service contracts is needed in Massachusetts.  This model, having been tested in other states, has proven to be fair and reasonable to both industry and consumers. 

We truly appreciate your consideration of this important issue.