Kansas Attorney General Opinion 2018-002

January 10, 2018
ATTORNEY GENERAL OPINION NO. 2018-2
The Honorable Blaine Finch
State Representative, 59th District
101 W. Second St.
Ottawa, KS 66067
Re: 	Unfair Trade and Consumer Protection—Consumer Protection—Kansas
Consumer Protection Act—Deceptive Acts and Practices; Unconscionable
Acts and Practices
Unfair 	Trade 	and 	Consumer 	Protection—Consumer 	Protection—
Miscellaneous—Method of Payment; Express Authorization Required
Synopsis: 	A utility may violate the Kansas Consumer Protection Act (KCPA) by
engaging in deceptive or unconscionable conduct related to a program
whereby customer bills are rounded up to the next dollar and the proceeds
donated to charity. Whether deceptive or unconscionable acts or practices
occur in a particular consumer transaction is a question of fact. Cited
herein: K.S.A. 50-623; K.S.A. 2017 Supp. 50-624; 50-626; K.S.A. 50-627;
50-6,105.
* 	* 	*
Dear Representative Finch:
As the State Representative for the 59 th District, you ask our opinion on “whether an
entity, public or private, may establish a ‘voluntary’ charitable contribution program
where a customer is automatically enrolled unless the customer takes action to be
removed from or opt out of the program.” Specifically, you ask whether it is a violation of

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the Kansas Consumer Protection Act (KCPA) 1 for a utility company to round up a
customer’s 	utility 	bill 	and 	give 	the 	proceeds 	to 	a 	charity 	without 	an 	affirmative
authorization from the customer. This type of program is also known as an “opt-out”
program because a person automatically participates in it unless that person takes
action to opt out.
The KCPA, among other things, is intended to “protect consumers from suppliers who
commit deceptive and unconscionable practices.” 2 For the purposes of the KCPA, a
“supplier” is generally defined as “a manufacturer, distributor, dealer, seller, lessor,
assignor, or other person who, in the ordinary course of business, solicits, engages in or
enforces consumer transactions, whether or not dealing directly with the consumer.” 3 A
“consumer transaction” generally means “a sale, lease, assignment or other disposition
for value of property or services within this state . . . to a consumer; or a solicitation by a
supplier with respect to any of these dispositions.”4
A utility company, whether public or private, falls into the KCPA’s definition of “supplier”
because it sells utility services to consumers.
Deceptive acts and practices
Deceptive acts and practices are listed in K.S.A 2017 Supp. 50-626, but that list is
expressly “not limited to” the enumerated examples. 5 Statutory examples of deceptive
acts and practices include “the willful use, in any oral or written representation, of
exaggeration, falsehood, innuendo or ambiguity as to a material fact”6 and “the willful
failure to state a material fact, or the willful concealment, suppression or omission of a
material fact.”7
A violation of K.S.A. 2017 Supp. 50-626 requires deception, which is defined as “[t]he
act of deliberately causing someone to believe that something is true when the actor
knows it to be false.” 8 A deceptive act or practice can occur even if no consumer has in
fact been misled. 9
“Whether a deceptive act or practice has occurred under the [KCPA] is not a question of
law for the court, but rather a question of fact for the jury to decide.”10 Therefore, we are
unable to provide a general opinion as to whether an opt-out utility bill round-up
1 K.S.A. 50-623 et seq.
2 K.S.A. 50-623(a) and (b).
3 K.S.A. 2017 Supp. 50-624(l).
4 K.S.A. 2017 Supp. 50-624(c).
5 K.S.A. 2017 Supp. 50-626(b) (“Deceptive acts and practices include, but are not limited to, the following
. . . “).
6 K.S.A. 2017 Supp. 50-626(b)(2) (emphasis added).
7 K.S.A. 2017 Supp. 50-626(b)(3) (emphasis added).
8 Black’s Law Dictionary (10 th ed. 2014).
9 K.S.A. 2017 Supp. 50-626(b).
10 Via Christi Regional Medical Center, Inc. v. Reed, 298 Kan. 503, 520 (2013), quoting Manley v. Wichita
Business College, 237 Kan. 427, Syl. ¶ 2 (1985).

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program constitutes a deceptive act or practice under the KCPA as a matter of law;
each determination of a deceptive act or practice depends on the facts of an individual
case.
However, we believe the inclusion of an opt-out round-up program on a consumer’s
utility bill would be considered a “material fact” for the purposes of K.S.A. 2017 Supp.
50-626(b)(3), which prohibits “the willful failure to state a material fact, or the willful
concealment, suppression or omission of a material fact.” Within the context of the
KCPA, “[a] matter is material if it is one to which a reasonable person would attach
importance in determining his choice of action in the transaction involved.”11
In our opinion, a reasonable person would attach importance to the amount of their
utility bill being affected by a program that automatically rounds up the consumer’s utility
bill and gives the proceeds to a charity without that consumer’s advance affirmative
consent. Even if that increase is less than $1.00, we believe a reasonable person would
find such an increase to be of importance to them. We also believe a reasonable person
would attach importance to having his or her money used to support a charity selected
by the utility supplier, not the consumer.
Therefore, it is our opinion that an opt-out utility bill round-up program may violate
K.S.A. 2017 Supp. 50-626 under certain circumstances, such as if a utility supplier
knowingly conceals from its consumers the existence of an opt-out round-up program,
the ability of the consumer to opt out or the process by which the consumer may opt
out, or the specific purpose for which the charitable contribution would be used. As
noted above, however, whether a deceptive act or practice has occurred depends on
the facts of each individual case.
Unconscionable acts and practices
Unconscionable acts and practices are proscribed by K.S.A. 50-627. That statute does
not directly define unconscionable acts 	and practices, but rather outlines a non-
exclusive list of circumstances that the court must consider in determining whether a
particular act or practice is unconscionable.12 These circumstances include:
(1) The supplier took advantage of the inability of the consumer reasonably to
protect the consumer's interests because of the consumer's physical
infirmity, ignorance, illiteracy, inability to understand the language of an
agreement or similar factor;
(2) when 	the 	consumer 	transaction 	was 	entered 	into, 	the 	price 	grossly
exceeded the price at which similar property or services were readily
obtainable in similar transactions by similar consumers;
11 Farrell v. General Motors Corp., 249 Kan. 231, 244 (1991), quoting Griffith v. Byers Construction Co.,
212 Kan. 65, 73 (1973).
12 K.S.A. 50-627(b).

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(3) the consumer was unable to receive a material benefit from the subject of
the transaction;
(4) when 	the 	consumer 	transaction 	was 	entered 	into, 	there 	was 	no
reasonable probability of payment of the obligation in full by the consumer;
(5) the transaction the supplier induced the consumer to enter into was
excessively onesided in favor of the supplier; [and]
(6) the 	supplier 	made 	a 	misleading 	statement 	of 	opinion 	on 	which 	the
consumer was likely to rely to the consumer's detriment. . . . 13
Explanatory sections titled “Kansas Comment, 1973” follow the various statutes in the
KCPA. These comments were added when the KCPA was first enacted in 1973. 14 The
comment following K.S.A. 50-627 provides additional guidance as to the types of
practices that may be considered unconscionable:
Unconscionability typically involves conduct by which a supplier seeks to
induce or to require a consumer to assume risks which materially exceed
the benefits to him of a related consumer transaction. It involves over-
reaching, not necessarily deception.
In other words, “there must be some element of deceptive bargaining conduct present
as well as unequal bargaining power to render the contract between the parties
unconscionable.” 15
“The issue of whether an act is unconscionable under the KCPA is a question of law
subject 	to 	unlimited 	review. 	However, 	the 	determination 	of 	whether 	an 	act 	is
unconscionable ultimately depends upon the facts of the case.” 16 Kansas courts have
found certain practices to be unconscionable, such as an owner of a storage facility
renting an unavailable unit to consumers then denying the consumers access to that
unit,17 and a seller convincing a consumer to buy a horse based solely upon the seller’s
false representations that the horse had received specific training. 18 Both of these cases
involved a supplier making deliberately false or misleading statements to a consumer
without which the consumer transaction would not have occurred.
13 K.S.A. 50-627(b).
14 L. 1973, Ch. 217. The Revisor’s Note preceding the KCPA states, “[t]he Kansas Comments following
sections of the Kansas Consumer Protection Act were prepared by Barkley Clark, Professor of Law at the
University of Kansas School of Law, who also served as consultant to the committees considering the
proposed legislation.”
15 State ex rel. Stovall v. DVM Enterprises, Inc., 275 Kan. 243, 251 (2003).
16 Dodson v. U-Needa Self Storage, LLC, 32 Kan.App.2d. 1213, 1218 (2004). See also K.S.A. 50-627(b)
(“The unconscionability of an act or practice is a question for the court.”).
17 Id.
18 State ex rel. Kline v. Berry, 35 Kan.App.2d 896 (2006).

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Kansas 	courts 	have 	clarified 	that 	not 	every 	undesirable 	outcome 	in 	a 	consumer
transaction is evidence of unconscionable conduct:
Transactions that merely appear unfair, or in retrospect are bad bargains,
do not necessarily state a claim under the Kansas Consumer Protection
Act. Where a record is devoid of any evidence of deceptive or oppressive
practices, 	overreaching, 	intentional 	misstatements, 	or 	concealment 	of
facts, there are no grounds for a claim of unconscionability under the
Kansas Consumer Protection Act.19
We believe a utility failing to make reasonable efforts to notify customers about the
commencement of an opt out utility bill round up program and not providing a refund
policy for customers who do not become immediately aware of such a program are
examples of conduct that a reviewing court would likely find deceptive or oppressive.
The presence of deceptive or oppressive conduct may render an opt-out utility bill round
up program an unconscionable act and practice under the KCPA. As previously
indicated, the determination of whether an act is unconscionable depends upon the
facts of each case.
Other provisions of the KCPA expressly declare certain practices to be unconscionable.
K.S.A. 50-6,105(a) states that “[n]o supplier shall obtain or submit for payment . . . 	a
check, draft or other form of negotiable instrument or payment order drawn on a
person's checking, savings, share or similar account without the consumer's express
authorization.” As used in the statute, “express authorization” means “an express
affirmative act by a consumer clearly agreeing to the payment by check, draft or other
form of negotiable instrument or payment order drawn on a person's checking, savings,
share or similar account.”20 K.S.A. 50-6,105(e) states that “[a] violation of subsection (a)
is an unconscionable act within the meaning of K.S.A. 50-627. . . .” Put simply, Kansas
law prohibits a supplier from automatically withdrawing money from a consumer’s bank
account without the consumer’s express affirmative act of consent.
The general rule outlined in K.S.A. 50-6,105(a) does not apply to payments “. . . for the
continuation of existing and recurrent services, services provided by a public utility as
defined in K.S.A. 66-104 21 . . . services provided by a wireless carrier as defined in
K.S.A. 12-5301 . . . or the collection of a preexisting debt . . . .”22 The legislative history
19 State ex rel. Stovall v. ConfiMed.com, L.L.C., 272 Kan. 1313, Syl. ¶¶ 5 and 6 (2002).
20 K.S.A. 50-6,105(b).
21 K.S.A. 2017 Supp. 66-104(a) defines public utility as “every corporation, company, individual,
association of persons, their trustees, lessees or receivers, that now or hereafter may own, control,
operate or manage, except for private use, any equipment, plant or generating machinery, or any part
thereof, for the transmission of telephone messages or for the transmission of telegraph messages in or
through any part of the state, or the conveyance of oil and gas through pipelines in or through any part of
the state, except pipelines less than 15 miles in length and not operated in connection with or for the
general commercial supply of gas or oil, and all companies for the production, transmission, delivery or
furnishing of heat, light, water or power.” There are exceptions to this general definition that may apply to
a particular utility. See K.S.A. 2017 Supp. 6-104(d) and (e).
22 K.S.A. 50-6,105(a).

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of the statute indicates that these exceptions were included to continue to allow
consumers to enroll in automatic bill payment programs whereby the amount due is
automatically transferred from the consumer’s bank account without requiring the
consumer to approve the payment each time. 23 These exceptions, however, are limited
to the continuation of existing and recurrent services; services provided by a public
utility; services provided by a wireless carrier; or the collection of a preexisting debt.
We note several items on a typical consumer’s utility bill are subject to change each
month, and may not be directly related to the amount of utility service received by the
consumer. It is unclear whether a recurring charitable contribution included as part of a
consumer’s utility bill would be considered part of the utility’s “services” such that the
utility would not be required to obtain the consumer’s express authorization prior to each
withdrawal of funds to be donated to charity. However, we believe that a charitable
contribution is less likely to be considered part of a utility’s services than other items that
might appear on a utility bill, such as municipal franchise fees. This is because
collecting charitable contributions has no necessary connection to the ordinary activities
of a public utility.
To date, there is no case law interpreting K.S.A. 50-6,105, and there have been no
amendments to the statute since 2002 that could provide insight into the legislative
intent. 24 We therefore cannot opine as a matter of law whether a utility bill round-up
program 	constitutes 	an 	unconscionable 	act 	under 	K.S.A. 	50-6,105. 	Instead, 	the
question of whether including a charitable contribution in the amount withdrawn from a
consumer’s bank account as part of an automatic bill payment program without the
consumer’s express authorization for each withdrawal is unconscionable is a question
of fact based upon the considerations discussed above.
Other factors
We note that public and private utilities are subject to oversight by a regulatory or
governing body depending on the nature of the utility. 25 While our opinion is limited to
the KCPA, other laws governing a particular utility could have a bearing a court’s
determination of whether a utility bill round-up program violates the KCPA. For example,
in some instances, a statute provides that approval by the regulatory or governing body
of a utility’s proposed tariff schedule is prima facie evidence of reasonableness. 26 If a
utility receives approval to institute an opt-out utility bill round-up program and include
automatic charitable contributions in consumers’ utility bills, such approval could serve
as part of a defense against a KCPA claim.
Summary
23 Minutes, Senate Committee on Financial Institutions and Insurance, January 31, 2001.
24 L. 2002, Ch. 13, § 1.
25 See, e.g., K.S.A. 2017 Supp. 66-104 (defining which utilities are subject to supervision by the Kansas
Corporation Commission (KCC)) and K.S.A. 2017 Supp. 66-104d (certain electric cooperative public
utilities not subject to KCC supervision).
26 See, e.g., K.S.A. 66-115.

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Whether a particular practice violates the KCPA depends on the facts of each consumer
transaction. We believe that an opt-out utility bill round-up program would be considered
a “material fact” for the purposes of K.S.A. 2017 Supp. 50-626 and K.S.A. 50-627. A
KCPA violation may occur if there is evidence of deceptive or oppressive practices,
overreaching, intentional misstatements, or concealment of facts with respect to a
consumer transaction involving an opt-out utility bill round-up program.
Sincerely,
Derek Schmidt
Attorney General
Sarah Fertig
Assistant Attorney General
DS:AA:SF:sb