SB49 - Revises provisions relating to consumer protection. (BDR 52-439)

- 83rd Session (2025) Senate Bill No. 49–Committee on Commerce and Labor CHAPTER.......... AN ACT relating to consumer protection; clarifying the authority of the Attorney General with respect to bringing certain actions relating to deceptive trade practices; revising certain civil penalties relating to deceptive trade practices; revising the authorized uses of money in the Consumer Protection Legal Account in the Office of the Attorney General; clarifying when the Consumer’s Advocate of the Bureau of Consumer Protection in the Office of the Attorney General has custody or control of certain records; making certain records, files and communications of the Consumer’s Advocate confidential; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law defines activities that constitute deceptive trade practices and provides for the imposition of civil and criminal penalties against persons who engage in deceptive trade practices. (Chapter 598 of NRS) Existing law authorizes the Attorney General to obtain a temporary restraining order, a preliminary or permanent injunction or other relief, including, without limitation, the recovery of a civil penalty, disgorgement, restitution or the recovery of damages by bringing an action in the name of the State against a person the Attorney General has reason to believe has engaged or is engaging in a deceptive trade practice. (NRS 598.0963) Section 3 of this bill provides that such relief includes any available remedy relating to certain activities that constitute deceptive trade practices. Section 3 also clarifies that such an action may be brought by the Attorney General on behalf of: (1) the State or its agencies, political subdivisions, districts or municipal corporations; or (2) the people of the State. Existing law authorizes the Director of the Department of Business and Industry to impose certain penalties, including an administrative fine, upon a person who has engaged in a deceptive trade practice after a hearing that is initiated by the Commissioner of Consumer Affairs or Attorney General serving an order upon such person. (NRS 598.0971) Section 4 of this bill: (1) increases the administrative fine from $1,000 or treble the amount of restitution ordered, whichever is greater, to not more than $15,000 for each violation or treble the amount of restitution ordered, whichever is greater; and (2) revises the authorized methods of service of the order imposing certain civil penalties. Existing law creates the Consumer Protection Legal Account in the Office of the Attorney General and provides that the money remains in the Legal Account at the end of the fiscal year and does not revert to the State General Fund. (NRS 228.333) Existing law: (1) creates the Bureau of Consumer Protection within the Office of the Attorney General; and (2) provides that the executive head of the Bureau of Consumer Protection is the Consumer’s Advocate, who may generally exercise the power of the Attorney General in areas of consumer protection and enforcement. (NRS 228.310, 228.380) Existing law also creates the Consumer Protection Administrative Account in the Bureau of Consumer Protection and: (1) requires the deposit of certain money from settlements and litigation into the Administrative Account; and (2) provides that any balance in excess of $500,000 in the Administrative Account on June 30 and December 31 of each year, and at any other time in the discretion of the Consumer’s Advocate, reverts to the Legal – 2 – - 83rd Session (2025) Account. (NRS 228.332) Existing law requires the Attorney General to allocate, in certain percentages, the money in the Legal Account to: (1) the Office of the Attorney General or the Consumer’s Advocate to be used for consumer protection and efforts to prevent fraud, including, without limitation, education, investigation, enforcement and litigation; and (2) certain legal aid organizations to be used for consumer protection and efforts to prevent fraud. (NRS 228.334) Section 11 of this bill provides that the percentage of money allocated from the Legal Account to the Office of the Attorney General or the Consumer’s Advocate may be used to pay for: (1) necessary staff employed for the Consumer’s Advocate to carry out consumer protection and efforts to prevent fraud; (2) necessary staff for the Office of the Attorney General to carry out consumer protection and efforts to prevent fraud; and (3) any other additional purpose relating to consumer protection and efforts to prevent fraud. Section 11 also eliminates the limitation that the money in the Legal Account must exceed 120 days of operating costs for certain staff before the Office of the Attorney General or Consumer’s Advocate may use money in the Legal Account for additional purposes relating to consumer protection and efforts to prevent fraud. Existing law authorizes the Consumer’s Advocate to have access to all records in the possession of any agency, board or commission of this State that he or she determines are necessary to exercise his or her powers relating to consumer protection. (NRS 228.380) Section 12 of this bill clarifies that the Consumer’s Advocate does not have possession of such records until he or she receives the record from the agency, board or commission. Sections 12 and 12.5 of this bill provide that if a record that is received by the Consumer’s Advocate is confidential and not a public record when in the custody or control of the agency, board or commission, the record is confidential and not a public record when in the custody or control of the Consumer’s Advocate. EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Sections 1 and 2. (Deleted by amendment.) Sec. 3. NRS 598.0963 is hereby amended to read as follows: 598.0963 1. Whenever the Attorney General is requested in writing by the Commissioner or the Director to represent him or her in instituting a legal proceeding against a person who has engaged or is engaging in a deceptive trade practice, the Attorney General may bring an action in the name of the State of Nevada against that person on behalf of the Commissioner or Director. 2. The Attorney General may institute criminal proceedings to enforce the provisions of NRS 598.0903 to 598.0999, inclusive. The Attorney General is not required to obtain leave of the court before instituting criminal proceedings pursuant to this subsection. 3. If the Attorney General has reason to believe that a person has engaged or is engaging in a deceptive trade practice, the Attorney General may bring an action in the name of the State of – 3 – - 83rd Session (2025) Nevada against that person to obtain a temporary restraining order, a preliminary or permanent injunction, or other appropriate relief, including, without limitation, the recovery of a civil penalty, disgorgement, restitution , [or] the recovery of damages [:] or any other available remedy pursuant to NRS 598.0903 to 598.0999, inclusive, on behalf of: (a) The State, its agencies, political subdivisions, districts or municipal corporations; or (b) The persons residing in this State: [(a)] (1) As parens patriae of the persons residing in this State, with respect to damages sustained directly or indirectly by such persons, or, alternatively, if the court finds in its discretion that the interests of justice so require, as a representative of a class or classes consisting of persons residing in this State who have been damaged directly or indirectly; or [(b)] (2) As parens patriae, with respect to direct or indirect damages to the general economy of the State of Nevada or any agency or political subdivision thereof. 4. If the Attorney General has cause to believe that a person has engaged or is engaging in a deceptive trade practice, the Attorney General may issue a subpoena to require the testimony of any person or the production of any documents, and may administer an oath or affirmation to any person providing such testimony. The subpoena must be served upon the person in the manner required for service of process in this State or by certified mail with return receipt requested. An employee of the Attorney General may personally serve the subpoena. Sec. 4. NRS 598.0971 is hereby amended to read as follows: 598.0971 1. If, after an investigation, the Commissioner or Attorney General has reasonable cause to believe that any person has been engaged or is engaging in any deceptive trade practice in violation of NRS 598.0903 to 598.0999, inclusive, the Commissioner or Attorney General may issue an order directed to the person to show cause why the Director should not order the person to cease and desist from engaging in the practice and to pay an administrative fine. The order must contain a statement of the charges and a notice of a hearing to be held thereon. The order must be served upon the person directly, by certified or registered mail, return receipt requested, or in any other manner permitted by the Nevada Rules of Civil Procedure for the service of process in civil actions. – 4 – - 83rd Session (2025) 2. An administrative hearing on any action brought by the Commissioner or Attorney General must be conducted before the Director or his or her designee. 3. If, after conducting a hearing pursuant to the provisions of subsection 2, the Director or his or her designee determines that the person has violated any of the provisions of NRS 598.0903 to 598.0999, inclusive, or if the person fails to appear for the hearing after being properly served with the statement of charges and notice of hearing, the Director or his or her designee shall issue an order setting forth his or her findings of fact concerning the violation and cause to be served a copy thereof upon the person and any intervener at the hearing. If the Director or his or her designee determines in the report that such a violation has occurred, he or she may order the violator to: (a) Cease and desist from engaging in the practice or other activity constituting the violation; (b) Pay the costs of conducting the investigation, costs of conducting the hearing, costs of reporting services, fees for experts and other witnesses, charges for the rental of a hearing room if such a room is not available to the Director or his or her designee free of charge, charges for providing an independent hearing officer, if any, and charges incurred for any service of process, if the violator is adjudicated to have committed a violation of NRS 598.0903 to 598.0999, inclusive; (c) Provide restitution for any money or property improperly received or obtained as a result of the violation; and (d) Impose an administrative fine of [$1,000] not more than $15,000 for each violation or treble the amount of restitution ordered, whichever is greater.  The order must be served upon the person directly , [or] by certified or registered mail, return receipt requested [.] or any other manner permitted by the Nevada Rules of Civil Procedure for the service of process in civil actions. The order becomes effective upon service in the manner provided in this subsection. 4. Any person whose pecuniary interests are directly and immediately affected by an order issued pursuant to subsection 3 or who is aggrieved by the order may petition for judicial review in the manner provided in chapter 233B of NRS. Such a petition must be filed within 30 days after the service of the order. The order becomes final upon the filing of the petition. 5. If a person fails to comply with any provision of an order issued by the Director or his or her designee pursuant to subsection 3, the Attorney General, or the Commissioner or the Director – 5 – - 83rd Session (2025) through the Attorney General, may, at any time after 30 days after the service of the order, cause an action to be instituted in the district court of the county wherein the person resides or has his or her principal place of business requesting the court to enforce the provisions of the order or to provide any other appropriate injunctive relief. 6. If the court finds that the person has failed to comply with an order issued by the Director or his or her designee pursuant to subsection 3, the court shall issue an order enforcing the provisions of the order of the Director or his or her designee. 7. An order issued pursuant to subsection 6 may include: (a) A provision requiring the payment to the Consumer Affairs Unit of the Department of Business and Industry of a penalty of not more than $5,000 for each act amounting to a failure to comply with the Director’s or designee’s order; (b) An order that the person cease doing business within this State; and (c) Such injunctive or other equitable or extraordinary relief as is determined appropriate by the court. 8. Any aggrieved party may appeal from the final judgment, order or decree of the court in a like manner as provided for appeals in civil cases. 9. Upon the violation of any judgment, order or decree issued pursuant to subsection 6 or 7, the Commissioner, after a hearing thereon, may proceed in accordance with the provisions of NRS 598.0999. Secs. 5-10. (Deleted by amendment.) Sec. 11. NRS 228.334 is hereby amended to read as follows: 228.334 1. After any reversion of money from the Consumer Protection Administrative Account to the Consumer Protection Legal Account in accordance with subsection 3 of NRS 228.332, the Attorney General shall allocate the money in the Consumer Protection Legal Account as follows: (a) Fifty percent to the Office of the Attorney General or the Consumer’s Advocate, to be used for consumer protection and efforts to prevent fraud, including, without limitation, education, investigation, enforcement and litigation. [Beginning on July 1, 2023, the] The Office of the Attorney General or the Consumer’s Advocate, as applicable [: (1) May] , may use money allocated pursuant to this paragraph to pay for [necessary:] : – 6 – - 83rd Session (2025) (1) Necessary staff employed pursuant to NRS 228.330 for the Consumer’s Advocate to carry out such consumer protection and efforts to prevent fraud; [and] (2) [If the amount of money in the Account that is allocated pursuant to this paragraph exceeds the amount required to pay for 120 days of operating costs for necessary] Necessary staff for the Office of the Attorney General to carry out such consumer protection and efforts to prevent fraud [, may [Text truncated for display. Full text available on LegiScan.]