“Live checks” are checks that obligate consumers to purchase goods and services they don’t necessarily want and may not even be aware of. They’re often mailed to people under the pretense of being rebate checks for a product they already purchased.
In reality, live checks come from third parties who obtain consumers’ credit card information without their knowledge. Consumers who cash the checks are often surprised to find charges show up on their credit card statement for purchases they didn’t know they were making by cashing the checks.
The checks usually contain fine print informing consumers that cashing them obligates them to buy something, but consumers often don’t see it. Moreover, they are seldom aware that their credit card information has been transferred to the third party that sent the check.
A new law bans the distribution of live checks, and classifies them as a deceptive practice under the state’s consumer protection laws. Sponsored by Rep. Andrew Falk (DFL-Murdock) and Sen. Kathy Saltzman (DFL-Woodbury), the law takes effect Aug. 1, 2010.
The law does not apply to checks sent from credit card companies as a benefit for their customers, or to similar checks from other lenders or financial institutions.
HF2599/
SF2439*/CH192