Details for covered memberships and advance payments

KRS 367.395 defines a buying club by the discount purchasing benefits it provides for consideration, with an exclusion for specified incidental discount services. The broader statutory club definition also includes vacation clubs. This buying-club option should be matched to the actual business and accepted undertaking rather than used for every prepaid health or dating membership.

KRS 367.403 applies when the membership fee exceeds $35. It requires a $50,000 bond from a surety admitted to do business in Kentucky, with a copy filed before the club makes a membership contract. Its protection concerns lost prepayments from the listed business or contract failures. Failure to maintain the required bond makes the club's principals personally liable for members' claims under that section.

A qualifying not-for-profit cooperative may apply to the Attorney General for exemption under KRS 367.407. The conditions address operation for members' benefit, not-for-profit services, allocation or retention of savings, and one-member-one-vote control. Check both the initial definition and the claimed exemption; a nonprofit label alone is not the exemption application described there.

The member's cancellation right is separate from bond termination. Under KRS 367.397, written notice may be given before midnight of the third business day following signature of a contract containing the required cancellation notice. The statute calls for the entitled refund within ten days after notice and preserves payment for vacation or merchandise already used. Follow the actual bond's continuation terms without importing this consumer cancellation window.