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H.B. 43
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UNAUTHORIZED CHARGES ON UTILITY
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BILLS - CRAMMING AMENDMENTS
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Sheryl L. Allen
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AN ACT RELATING TO PUBLIC UTILITIES; PROVIDING DEFINITIONS; PROHIBITING
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UNAUTHORIZED CHARGES ON PUBLIC UTILITY BILLS; AND ENACTING RELATED
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PROVISIONS.
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This act affects sections of Utah Code Annotated 1953 as follows:
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ENACTS:
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54-4-37, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
54-4-37
is enacted to read:
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54-4-37. Definitions -- Unauthorized charge to account -- Penalties -- Procedures for
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verification -- Authority of commission.
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(1) For purposes of this section:
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(a) "Agents" includes any person, firm, or corporation representing a public utility for
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purposes of billing for a service or merchandise from a third-party supplier.
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(b) "Billing aggregator" means any person, corporation, partnership, or other entity which
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initiates charges, combines or aggregates charges from third-party suppliers of services or
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merchandise, creates bills for account holders and passes these bills to another aggregator or to a
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public utility for the billing of account holders.
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(c) (i) "Public utility" means a company or utility providing:
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(A) natural gas services;
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(B) electrical services; or
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(C) telecommunications services.
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(ii) "Public utility" does not include a telecommunications corporation providing only
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mobile wireless service or Internet access.
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(d) "Subscriber" means a corporation, person, or government, or a person acting legally
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on behalf of a corporation, person, or government who has authorized a charge from a third-party
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provider of service or merchandise.
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(e) (i) "Third party" means any person, corporation, partnership, or other entity other than
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the account holder and the public utility, including aggregators and public utility or nonpublic
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utility providers of services and merchandise, and includes those entities billing for services or
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merchandise, and those verifying a subscriber's authorization.
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(ii) "Third party" does not include h
:
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(a)
h an affiliated or subsidiary company of a public utility
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whose charges the commission determines by rule would be reasonably associated by a subscriber
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with the type of charges that would appear on that particular public utility's bill h
; OR
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(b) CHARGES FROM A PRESUBSCRIBED LOCAL OR LONG DISTANCE
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TELECOMMUNICATIONS CORPORATION OR ITS AFFILIATED OR SUBSIDIARY COMPANY FOR
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LOCAL OR LONG DISTANCE TELEPHONE, DATA, OR WIRELESS SERVICES
h .
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(2) This section does not apply to h
:
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(a)
h telecommunications services that are used, initiated, or
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requested by the customer, including dial-around services such as
10-10-XXX
, 1-900 numbers,
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directory assistance, operator-assisted calls, acceptance of collect calls, and other casual calling
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by the customer h
; OR
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(b) CHANGES IN TELECOMMUNICATIONS PROVIDERS REGULATED BY SECTION 54-8b-18
h .
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(3) Pursuant to the provisions of the section, a public utility may not charge an account
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holder for services the holder never ordered nor knowingly authorized.
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(4) Each public utility may include in its bills to account holders, billed amounts for
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authorized services or merchandise from third parties, only in conformance with the following
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requirements.
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(a) Each public utility shall ensure that its account holders receive:
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(i) identification of third-party provider of services or merchandise;
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(ii) toll-free numbers to enable a subscriber to contact the third party to resolve disputes;
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(iii) a clear, concise description of services or merchandise being billed;
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(iv) highlight or identification of each service or merchandise different from prior billing
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cycle services or merchandise;
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(v) clear identification of the payment amount needed for each service or merchandise to
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ensure that any public utility service will continue;
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(vi) prompt and courteous treatment of all disputed charges; and
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(vii) notice of the provisions in Subsections (5) and (6).
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(5) Unless specifically instructed by the account holder, each public utility shall first apply
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all payments received to the account holder's bill for the public utility's own tariffed utility
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services. Any remaining credit shall then be allocated proportionally to other charges, unless
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otherwise specified by the account holder.
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(6) No public utility may disconnect or threaten disconnection of any account holder's
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basic utility service for failure to pay third-party charges.
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(7) Accounts receivable purchased by a public utility from third parties are not to be
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treated as public utility charges regardless of the service or product upon which the account
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receivable is based.
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(8) (a) If an account holder informs the public utility that a third-party service or
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merchandise charge is neither knowingly used nor authorized, or the charge in whole or part is
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disputed, the public utility shall:
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(i) immediately credit the account holder's account for the disputed amount and refer the
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matter back to the third party for collection; or
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(ii) suspend the account holder's obligation of payment of the disputed amount until it is
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determined whether the charge was either knowingly used or authorized.
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(b) The public utility may not request the account holder to contact the third party to
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resolve the dispute prior to applying the credit.
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(c) The disputed charge shall be removed from the public utility's bill to the account holder
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no later than two billing cycles following the billing cycle during which the complaint or dispute
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is registered unless it is later determined that the charge was authorized and the account holder is
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required to pay such charge.
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(d) The public utility shall inform the account holder of this process and the holder's
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options immediately upon the holder's first complaint or inquiry.
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(e) Except as provided in Subsection (8)(c), once the charges have been removed from the
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account holder's utility bill:
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(i) the third party may not use the utility bill to rebill the charges or further attempt to
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collect the charge; and
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(ii) the public utility may not allow any further collection attempts by the third party to
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involve the utility bill.
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(9) (a) If requested by the account holder, each public utility shall provide the account
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holder with toll-free numbers supplied by the provider of the service or merchandise, so the
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account holder may contact the third-party supplier of the services or merchandise billed.
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(b) The public utility responsibility prescribed by Subsection (9)(a) applies through all
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layers of third parties, including utilities, service providers, merchandise providers, affiliate billing
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companies, or billing aggregators, and the public utility shall perform due diligence to acquire that
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information from any provider for whom it bills.
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(10) A third-party provider of services or merchandise shall not request a public utility to
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bill its charges unless and until it:
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(a) has provided to the public utility valid toll-free numbers to enable a subscriber to
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contact the third-party to resolve any disputed charges;
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(b) has provided updated toll-free numbers to the public utility upon any change in the
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numbers; and
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(c) has received authorization from the subscriber for the service or merchandise through:
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(i) obtaining the subscriber's written authorization;
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(ii) having the subscriber's oral authorization verified by an independent verifier; or
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(iii) any means provided by rule of the commission.
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(11) If the subscriber is not an individual, an authorization shall be valid only if given by
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an authorized representative of the subscriber.
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(12) The written authorization for the service or merchandise shall be signed by the
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subscriber and shall contain a clear, conspicuous, and unequivocal request by the subscriber for
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the service or merchandise.
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(13) The confirmation by a verifier shall, at a minimum:
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(a) confirm the subscriber's identity with information unique to the customer, unless the
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customer refuses to provide identifying information, then that fact shall be noted;
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(b) confirm that the subscriber requests the service or merchandise be provided by the third
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party; and
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(c) confirm that the subscriber has the authority to request the service or merchandise be
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provided by the third party.
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(14) A verifier shall meet each of the following:
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(a) any criteria set for verifiers by the commission;
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(b) not be directly or indirectly managed, controlled, directed, or owned wholly or in part:
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(i) by the public utility on whose bill the charge will appear, the third-party provider, or
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their agents that seek to provide the service or merchandise or by any corporation, firm, or person
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who directly owns or indirectly manages, controls, directs, or owns more than 5% of the public
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utility or third party provider; or
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(ii) by the marketing entity that seeks to market the third-party provider's service or
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merchandise or by any corporation, firm, or person who directly or indirectly manages, controls,
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or owns more than 5% of the marketing entity;
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(c) operate from facilities physically separated from:
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(i) those facilities of the public utility on whose bill the charge will appear, the third party
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or its agents that seek to provide the service or merchandise to the subscriber; or
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(ii) those facilities of the marketing entity that seeks to market the third-party provider's
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service or merchandise to the subscriber; and
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(d) not derive commissions or compensation based upon the number of authorizations
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verified.
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(15) A verifier that obtains the subscriber's oral verification regarding the change shall
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record that verification by obtaining the appropriate verification data.
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(16) (a) The record verifying a subscriber's request for a third party to provide services or
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merchandise shall be available to the subscriber upon request.
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(b) Information obtained from the subscriber through verification may not be used for any
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other purpose.
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(c) Any intentional unauthorized release of the information in Subsection (16)(b) is
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grounds for penalties or other action by the commission or remedies provided by law to the
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aggrieved subscriber against the third-party provider, the verifier, their agents, or their employees
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who are responsible for the violation.
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(17) The verification shall occur in the same language as that in which the request was
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solicited.
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(18) Each public utility shall allow account holders to prohibit the public utility from
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billing for all or selected third parties for services or merchandise.
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(19) Each public utility shall maintain monthly records of the number of h [
cramming
] h
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complaints about h [
third-party service or merchandise that were reported by account holders
]
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UNAUTHORIZED CHARGES THAT APPEAR ON A PUBLIC UTILITY BILL WHICH SHALL BE
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AVAILABLE TO THE COMMISSION UPON REQUEST
h .
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(20) (a) Proceedings for violations of this section may be commenced by request for
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agency action filed with the commission by an account holder, a public utility, the Division of
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Public Utilities, or by the commission on its own motion.
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(b) The remedies provided by this chapter are not exclusive and are in addition to all other
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causes of action, remedies, and penalties provided by law.
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(21) Any public utility, its agents, or a third-party provider of goods or services who
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violates this section or rules adopted to implement this section shall be subject to the provisions
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of Sections
54-7-23
through
54-7-29
.
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(22) The division shall have power to seek injunctive relief to stop repeated unauthorized
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violations of this section by a public utility or a third-party provider of service or merchandise.
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(23) The commission is granted authority to enforce provisions of this section and
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implement rules to carry out the requirements of the section.
Legislative Review Note
as of 1-7-00 7:50 AM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.