New law goes on offensive to restrict unwanted e-mail

Wednesday, July 1, 1998 | 11:05 a.m.

CARSON CITY -- Nevada has become the first state to restrict unwanted advertisements on the Internet via e-mail. The law, one of more than a dozen passed by the 1997 Legislature, takes effect today.

Bob Barengo, a lobbyist for the direct mail association, said his group was concerned initially the Internet bill would have a "chilling effect on free speech and this is a matter that should be handled by Congress or by the industry initiating protocol."

The law says a person who transmits an unwanted advertisement can be liable for $10 in civil damages to the recipient. There are, however, lots of exceptions. For example, if companies have an ongoing business relationship, there's no penalty for sending an e-mail advertisement.

Other exceptions: If consent is given to receive the e-mail, or the advertisement contains the name of the sender and instructions on how to stop receiving future unwanted advertisements.

Nevada's new law is a slap on the wrist compared to Washington state, which now forbids "spam," or electronic junk mail. Violators can be fined $500.

David Harrison Kramer, a Palo Alto, Calif., attorney who is a specialist in e-mail, says Nevada's law "is still worse than no law at all" because it puts the burden on the consumer to take action in declining the advertisement.

Some Internet users pay for only time they use the service, rather than a monthly fee. Unwanted e-mail advertisements pile up in their mailboxes and then their Internet bill goes up as the recipient reads them.

"Hundreds of thousands of people have wireless Internet access and they pay as if it's a cell phone," he said. "They are dinged every time they download and delete this."

Barengo counters that unwanted advertisements come in the mail or over the telephone and this is just another way of advertising. "My clients are not totally happy but it's a fairly balanced bill."

He cites a procedure required on junk e-mail for getting off the list, yet still allowing businesses to advertise such things as sales with previous customers.

Another new law, sponsored by Assemblyman Wendell Williams, D-Las Vegas, now requires check-cashing businesses to register with the state Financial Institutions Division. Some businesses "are still ripping off the consumer" and charging as much as 20 percent to cash a check, Williams said.

Williams said he is not pleased that a 5 percent maximum fee that he wanted to impose for cashing a check was scrapped as the bill was processed.

"This attacks the folks who can less afford to have their money ripped off," said Williams, referring to those who live from paycheck to paycheck.

Scott Walshaw, director of the state financial institutions agency, estimates there are between 40 and 50 check-cashing businesses in Nevada, most of which are in Las Vegas. Under the new law, a background check is required for anyone running the service.

As these businesses are registered with the state, consumers will have a place to file complaints. Walshaw said this would give his agency a chance to see how these businesses operate and whether more regulations are required.

Robert Frimet, president of the Nevada Independent Check Cashing Association, said his industry believes regulation is good because there are a few bad apples in the business. But he strongly disagrees the public is being ripped off by high fees.

"Check cashers have been around since the 1930s," said Frimet, who owns and operates the Casa De Cambio in Las Vegas. "We serve a need where a person might not be able to go to a bank or might not want to deal with a bank. We are required to post our fees."

Frimet said the customer knows in advance what he is being charged and can shop around just as he could for any professional service.

"The industry firmly believes in the free enterprise system," Frimet said, adding that the majority of check cashiers charge anywhere from 1 percent to 5 percent because of the risk associated with the business.

Since he started his new store in November 1997, Frimet said he has received more than 10,000 bum checks, some of which he says will never be collected on.

"I cashed a $16,000 check last week for a young girl with only high school identification," he said. "A bank or a casino wouldn't touch her."

The check was from an accident settlement and Frimet said he charged $800 for the service.

Lower percentage fees, he said, are charged for Social Security or welfare checks.

The new regulation does not affect casinos.

Teens who want to catch the CAT bus to school at no charge can thank Assemblywoman Chris Giunchigliani, D-Las Vegas, for her school truancy bill that became effective last year. The section that became law today permits school districts to pick up the cost of high school students who want to use the municipal bus to get to class.

Giunchigliani said this will allow districts the option of paying for the transportation in such cases as children who are homeless. The law could provide school districts big savings by cutting back on their need to buy additional buses.

While the program is not mandatory, she said she may extend it to include to junior high students at the 1999 session.

A new formula to distribute tax revenue among local governments, long in the works, also took effect today.

There won't be any change in the amount of money going to each county. But cities, towns and other local government units will see a different distribution. Each government entity will receive the same as last year plus an inflationary increase, but the remaining funds will be divided based on population growth and the increase in the ad valorem growth.

Lawmakers say this new formula will promote a regional approach to government and it may encourage the merging of special districts.

The taxes involved include sales, real estate transfer, cigarettes, liquor and motor vehicle privilege.

Another law effective today gives district judges discretion to send an offender to prison for a minor felony, rather than granting automatic probation, if the person was on probation for another crime or had been convicted twice before at the time of the current crime.